I'm somewhat more optimistic that Lyft will fare better in certain cities than Uber because they seem more willing to work with governments and seem like less of a "bully" (although they did act the same as Uber in Austin recently...), but they also seem to wait until Uber goes into a city and kind of lets them take the brunt of the assault in the hopes that they will fare better. However, hearing that they're losing…
I've been seeing nothing but ads around here for 50 dollars free and I know some people that have been taking advantage of it. Maybe they should scale that back.
Could they be giving away 1 million of these a month?
Can someone please explain how its possible to lose that much money? What exactly does that 50M constitute?
They give out signing bonuses to drivers (as much as $2000) and free credits to new riders (as much as $50). Launching in new markets gets expensive quickly with that model.
What shocks me about both Lyft and Uber's enormous burn rates are that they suggest the companies are heavily subsidizing their drivers. This subsidy is in part to spur penetration in new markets (as all marketplace apps must do), but also suggests that they have reason to believe customers will simply not pay a rate that makes the business profitable. Assuming the latter is the case, i'm not sure if they have reason…
I think the play is more or less to strangle the higher priced and over-regulated patchwork taxi industries and build a more uniform national/international regulatory framework that's more amenable to these kinds of businesses. At that point prices will probably rise, and (they hope, and I think they're right) customers will see value in the better product that keeps them in.
You've picked my interest, how would lowering regulation increase customer prices?
What shocks me about both Lyft and Uber's enormous burn rates are that they suggest the companies are heavily subsidizing their drivers. This subsidy is in part to spur penetration in new markets (as all marketplace apps must do), but also suggests that they have reason to believe customers will simply not pay a rate that makes the business profitable. Assuming the latter is the case, i'm not sure if they have reason…
Why not an arms race to burn through the other side's cash, thus gaining monopoly status for a time?
I think the play is more or less to strangle the higher priced and over-regulated patchwork taxi industries and build a more uniform national/international regulatory framework that's more amenable to these kinds of businesses. At that point prices will probably rise, and (they hope, and I think they're right) customers will see value in the better product that keeps them in.
You've picked my interest, how would lowering regulation increase customer prices?
I am not saying prices would rise in direct consequence to a reduction in regulation. The premise is that they are pricing below market right now, and probably also for a more open market. This is an expense to them designed to create the open market they want.
Once they have it, they'll have little reason to underprice anymore. You need drivers to run this kind of business (for now), and they will create an upward pressure on cost (to a point) as they move between legitimate services based on who actually pays them a living.
I've been seeing nothing but ads around here for 50 dollars free and I know some people that have been taking advantage of it. Maybe they should scale that back.
Could they be giving away 1 million of these a month?
It's probably a combination of those $50 free ride deals, which are likely only available in specific markets, and the loss from having semi low cost rides, as well as heavy marketing.
What shocks me about both Lyft and Uber's enormous burn rates are that they suggest the companies are heavily subsidizing their drivers. This subsidy is in part to spur penetration in new markets (as all marketplace apps must do), but also suggests that they have reason to believe customers will simply not pay a rate that makes the business profitable. Assuming the latter is the case, i'm not sure if they have reason…
They are absolutely excited about the time when self-driving cars will be actually here.
But the real play here is to use taxi service as a pretext/generator for building up an on-demand courier service [1] with superior returns -- and performance that vastly dwarfs any incumbents.
EDIT: after the introduction of courier services, picking up passengers serves as a baseline load [2] (to borrow from electricity distribution terminology) to keep drivers incentivized to be on the roads, but the real prize will be the courier tasks.
What shocks me about both Lyft and Uber's enormous burn rates are that they suggest the companies are heavily subsidizing their drivers. This subsidy is in part to spur penetration in new markets (as all marketplace apps must do), but also suggests that they have reason to believe customers will simply not pay a rate that makes the business profitable. Assuming the latter is the case, i'm not sure if they have reason…
What shocks me about both Lyft and Uber's enormous burn rates are that they suggest the companies are heavily subsidizing their drivers. This subsidy is in part to spur penetration in new markets (as all marketplace apps must do), but also suggests that they have reason to believe customers will simply not pay a rate that makes the business profitable. Assuming the latter is the case, i'm not sure if they have reason…
I think the play is more or less to strangle the higher priced and over-regulated patchwork taxi industries and build a more uniform national/international regulatory framework that's more amenable to these kinds of businesses. At that point prices will probably rise, and (they hope, and I think they're right) customers will see value in the better product that keeps them in.
Or they are looking forward to the introduction of self-driving cars? Rather than waiting for self-driving cars to actually arrive, by which time the horse will have bolted, they are trying to lock the customer base in now at a high cost, banking on the money lasting until self-driving cars arrive. Once self-driving cars arrive, costs fall, competitors are locked out, and they make a big profit.
I've been seeing nothing but ads around here for 50 dollars free and I know some people that have been taking advantage of it. Maybe they should scale that back.
Could they be giving away 1 million of these a month?
Doubtful but the people I know here don't pay for rides at all. They just keep using the free codes. That and a few have stockpiled coupons from special events.