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Lyft’s revenues double, losses quintuple and prospects darken

economist.com

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Re: Lyft’s revenues double, losses quintuple and prospects darken

#201

Post by WhompingWindows »

GCA10 wrote: post #101
onlyrealcuzzo wrote: post #71

Earlier quoted context omitted.

I cannot understand why Uber needs 22k employees. I get it that WhatsApp and StackOverflow and Instagram have/had a lot less legal, financial, and marketing requirements. But Uber has almost 1000 times the amount of employees WhatsApp, Instagram, and StackOverflow had when they reached similar scale. I get it that there's a lot more analytics and geospatial complexity in Uber. I get it that they have to manage tens (…

Uber has a huge community operations team that's in charge of making sure that its drivers stay productive and at least semi-at-peace with the way the system works (and evolves!) There's a lot more human-to-human work needed in this business than for a social-media site, or an automated online-ad service. That's where a lot of the 22,000 employees are, and if Uber could thrive without them, it surely would have alrea…

----Help brand the Uber name and get driver-partners excited to be on the road

Why is this essential? It seems like a fluffy marketing position to me.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#202

Post by ummonk »

Spooky23 wrote: post #193
ummonk wrote: post #48

Earlier quoted context omitted.

Well restaurants do stiff the waitstaff by paying them less than minimum wage, but that doesn’t really apply here. Only would apply to Instacart.

No. If they do that they are breaking the law. Minimum wage is the floor. If tips don’t bring your cash wage up to minimum, the employee has to get paid.

Yes, but that is the point. The restaurant doesn’t pay minimum wage, instead using tips to make up the difference.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#203

Post by zanny »

OliverJones wrote: post #76

Fundamentals question: Can somebody explain how these ridesharing companies expect to turn a profit, eventually? If you lose 50 cents on every ride, how do you make it up in volume? Every ride is subsidized by the Sand Hill Road crowd. They're a great deal. I took a 40-min ride yesterday for US$12.50 in a high-cost-of-living traffic-clogged city. How can that make sense? A ride in a sketchy 1970s-era New York City gy…

> Why should I invest for the long term in these companies?

The pitch for Uber is that operating at a loss and aggressively capturing the market for point to point transit eventually puts their competition (mostly Lyft, often regional startups since the real opportunity cost to make an Uber competitor is so low) out of business that lets them jack up their prices.

Basically, aggressively monopolize markets and then drive prices up until competition resurfaces, run in the red until competition dies first from less cash on hand, then resume exploitation.

Its also hedging that self driving tech is far out enough to keep reaping profits from this cycle for some time. In the same way people go to Amazon first to buy something in many cases, Uber predicts with enough domination of the market for long enough people will just always go to Uber first for transport regardless of if actual better options exist at some point.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#204

Post by djakjxnanjak »

maxxxxx wrote: post #12
wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

The drivers want to make enough money so working for Lyft makes sense. It’s pretty simple.

Lyft doesn’t have the money to spare, so it sounds like they need to find a different job.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#205

Post by hellllllllooo »

astrodust wrote: post #123
GCA10 wrote: post #87

Earlier quoted context omitted.

Right now, Uber keeps 22 cents on each dollar paid by passengers, as its fee for creating the app, keeping it working, etc. That's cheap relative to the iTunes store, which keeps 30%. It's preposterous compared to the 3% that real-estate agents get for buying or selling a home. We really don't know what the "fair" rate is for running a ride-hailing business. We know what's been collected to date in a venture-funded d…

22% is really high for what's effectively a dispatch fee. If you factor in the way Uber can dictate price, you may actually be "paying" a higher fee versus what you could've made on your own. If they force you to accept a 40% discount that's got to be factored in, too. Apple takes 30% but they don't tell you what price you can charge.

Would be very interested to see the economics if drivers could set their own pricing.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#206

Post by d33 »

chollida1 wrote: post #4

When Lyft was doing their road show there were a few analysts who had price targets of $45 as Lyfts fair value at IPO with an acknowledgement that the amount of shares available would double, and possibly triple when all shares were off restriction, meaning that the $45 price target was a best case and we would probably see far lower once people can sell. This is a company that has maybe 33 million shares outstanding…

> rehypothicated

Off-topic, but: thanks for teaching me a new word! I found that the correct spelling though is "rehypothecated". According to Wiktionary:

> (finance) To pledge hypothecated client-owned securities in a margin account to secure a bank loan; usually used for mortgages.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#207

Post by asdff »

britch wrote: post #122
OliverJones wrote: post #76

Fundamentals question: Can somebody explain how these ridesharing companies expect to turn a profit, eventually? If you lose 50 cents on every ride, how do you make it up in volume? Every ride is subsidized by the Sand Hill Road crowd. They're a great deal. I took a 40-min ride yesterday for US$12.50 in a high-cost-of-living traffic-clogged city. How can that make sense? A ride in a sketchy 1970s-era New York City gy…

The idea (urban myth?) I've heard for discussion's sake: The long term bet is on them becoming THE way to get around and monopolizing the market (or a chunk of it at least) and THEN jacking up prices. If you undercut cabs and public transit long enough, they'll have to react to lower ridership and reduce availability. Sorry, no late night buses, most people are taking a very inexpensive and convenient Lyft home. Now…

Aside from NYC most cities do not have late night public transport past like midnight in most cases, maybe if you are lucky 2am. On top of that outside of NYC and maybe people commuting to DC, public transport ridership is pretty abysmal.

Plus all the cabbies have to do is either assign drivers to third shift or not, it can be done on a whim as demand dictates.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#208

Post by tomcam »

LifeofPi314 wrote: post #191
chollida1 wrote: post #4

When Lyft was doing their road show there were a few analysts who had price targets of $45 as Lyfts fair value at IPO with an acknowledgement that the amount of shares available would double, and possibly triple when all shares were off restriction, meaning that the $45 price target was a best case and we would probably see far lower once people can sell. This is a company that has maybe 33 million shares outstanding…

I think in this market this is an opportunity of a lifetime to buy at these levels.

Not asking this question to be rude or snarky. Can they make money at all? If not why would their prices be discounted now?

It seems to me as a layperson that they have both funded their growth by discounting rides at an unsustainable rate. The sustainable price seems to be pretty much what taxis charge. (No complaint here. I believe in paying my, ah, fare share. I’d be quite willing to pay that rate for Uber/Lyft because I don’t like taxis.)

Is that analysis unsound? What will keep them operating when they run out of investor money?

Re: Lyft’s revenues double, losses quintuple and prospects darken

#209

Post by michaelmrose »

Invictus0 wrote: post #30
Spooky23 wrote: post #17

Earlier quoted context omitted.

Drivers are independent agents who have every right to demand better conditions. It’s especially important to chisel every penny out of a company that will likely vanish in a short number of years. Lyft has bled money from day 1, so justifying stiffing the workers on the basis of accelerating losses isn’t logical at all. Now that the investors have cashed in, perhaps they can double down on patents on robo-cabs and s…

How can you say that Lyft is "stiffing" the drivers when they lose money on every ride? Where is the extra money for the drivers supposed to come from? Every passenger has the opportunity to tip if they want: would you also say that restauranteurs are stiffing the waitstaff?

Whether compensation is appropriate depends on the individual and their circumstances and costs. The employees situation depends on the perceived value of services rendered not the employers profitability.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#210

Post by temp1292832 »

I don't know what the bull case for Lyft is at all. They haven't expanded into other products or markets outside of pure U.S. ridesharing, which had already been plateauing for some time. Uber, OTOH, has years of experience operating and expanding internationally, has built UberEats into it's own mult-bil vertical on it's own, and owns substantial shares of dominant ridesharing cos in other markets like Grab, DiDi, now Careem, etc.
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