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Leaked Lyft Document Reveals a Costly Battle with Uber

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Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#11

Post by tomashertus »

So taking into account these two facts:

> in 2014, it was 51,000 drivers and 2.2 million monthly rides, according to the document

> A ride booked in San Francisco through the Classic service generates a 92-cent profit for Lyft, including marketing costs but excluding corporate expenses, such as software developers and office space.

and assuming that all these 26.4 rides where Lyft Classic(which is of course foolish, but good for now), they would have around $24.28M for corporate expenses. Well and office in SF with ~500 people and all these perks in the heart of Mission district, makes me wonder if they are even profitable...

Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#12

Post by lbarrow »

tomashertus wrote: post #11

So taking into account these two facts: > in 2014, it was 51,000 drivers and 2.2 million monthly rides, according to the document > A ride booked in San Francisco through the Classic service generates a 92-cent profit for Lyft, including marketing costs but excluding corporate expenses, such as software developers and office space. and assuming that all these 26.4 rides where Lyft Classic(which is of course foolish,…

You don't have to wonder. It says at the bottom of the article that Lyft is not profitable:

  Though currently unprofitable, Lyft's ride economics appear to be going in the right direction.

Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#13

Post by dankohn1 »

gphil wrote: post #5

What I want to know is, when the VC money runs out, what's the barrier to entry to this business? Right now, Uber can beat everybody on price and quality because they don't have to be profitable for a long time. But once they have to compete on price, where's their advantage? Installed user-base? Incumbents forced out of business? Many times I call for an Uber and a cab comes first and then they lose my business to t…

Uber is a classic two-sided network [0], like eBay or Craigslist. It is extremely difficult to displace a first-mover advantage. The hundreds of thousands of drivers are set up with Uber and will stick with it unless something new is meaningfully better (and Lyft is currently worse). Same with the users.

I think you can be legitimately critical of Uber's poor business ethics [1], but the sustainability of their current business model looks excellent, at least for each city in which they are established as the first mover.

[0] http://en.wikipedia.org/wiki/Two-sided_market [1] http://en.wikipedia.org/wiki/Uber_(company)#Sabotage_against...

Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#15

Post by fragmede »

necubi wrote: post #10
toomuchtodo wrote: post #8

Earlier quoted context omitted.

> In that scenario, Uber should be charging you a penalty for the cancelled ride. Which would drive users to Lyft or other ridesharing services.

Lyft penalizes you $5 for cancelled rides after some amount of time, at least in SF. Also when the app makes a request on its own and you're not there.

As does Uber - they'll charge $10 if you cancel after 5 minutes after the driver is assigned.

http://blog.uber.com/2012/05/01/updated-cancellation-policy/

Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#16

Post by georgeott »

necubi wrote: post #10
toomuchtodo wrote: post #8

Earlier quoted context omitted.

> In that scenario, Uber should be charging you a penalty for the cancelled ride. Which would drive users to Lyft or other ridesharing services.

Lyft penalizes you $5 for cancelled rides after some amount of time, at least in SF. Also when the app makes a request on its own and you're not there.

Uber charges the same $5 after 5 mins, if cancelled.

Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#17

Post by tomashertus »

lbarrow wrote: post #12
tomashertus wrote: post #11

So taking into account these two facts: > in 2014, it was 51,000 drivers and 2.2 million monthly rides, according to the document > A ride booked in San Francisco through the Classic service generates a 92-cent profit for Lyft, including marketing costs but excluding corporate expenses, such as software developers and office space. and assuming that all these 26.4 rides where Lyft Classic(which is of course foolish,…

You don't have to wonder. It says at the bottom of the article that Lyft is not profitable: Though currently unprofitable, Lyft's ride economics appear to be going in the right direction.

my bad, I was agitated from the graph above this statement!:) Thanks

Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#18

Post by mayneack »

MadManE wrote: post #14

I keep hearing about this huge war between Lyft and Uber, but I don't see anything evidenced in the price to the user. Now, maybe I'm just naive, but shouldn't this kind of competition drive the prices down?

Have you used uber pool or lyft's equivalent? I can take a 45 minute ride in LA for $5. I've only had someone else get in the car once out of at least 20 rides. They're definitely losing some money there.

Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#19

Post by revelation »

lbarrow wrote: post #12
tomashertus wrote: post #11

So taking into account these two facts: > in 2014, it was 51,000 drivers and 2.2 million monthly rides, according to the document > A ride booked in San Francisco through the Classic service generates a 92-cent profit for Lyft, including marketing costs but excluding corporate expenses, such as software developers and office space. and assuming that all these 26.4 rides where Lyft Classic(which is of course foolish,…

You don't have to wonder. It says at the bottom of the article that Lyft is not profitable: Though currently unprofitable, Lyft's ride economics appear to be going in the right direction.

Wow. Leave it to a startup to go into the red whilst providing 1) an app and 2) fluff mustaches and .. well not much more, really.

Re: Leaked Lyft Document Reveals a Costly Battle with Uber

#20

Post by jordanthoms »

MadManE wrote: post #14

I keep hearing about this huge war between Lyft and Uber, but I don't see anything evidenced in the price to the user. Now, maybe I'm just naive, but shouldn't this kind of competition drive the prices down?

Prices have been coming down. Just look at UberX prices in the established markets.
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