Looks like really bad news for LYFT. Their lack of diversification is really going to hurt them.
Uber S-1
111–120 of 559 posts
Re: Uber S-1
#112I wonder if anyone reading through this filing could speculate: Can Uber just raise their prices to reach profitability? If they lost $3B on $44.1B of Gross Bookings, it seems they could raise their prices by about 7% to hit breakeven. Would they really lose that much market share if they did that?
Re: Uber S-1
#113Earlier quoted context omitted.
> It takes tremendous capital expenditure to build that network, and it will take tremendous capital expenditure to neutralize it. Does it, though? Every driver I've talked to basically drives for "all of them". Several told me they try to find whatever apps are local for driving and they setup those alone with Uber and Lyft and simply take whatever pays the most / is more frequent. Uber's software and network are so…
it's economically unreasonable to drive for more than one apps simultaneously. Now, it could be economically reasonable to drive for more than one apps at many points in the past. If Lyft and Uber are so easily exchangeable, why is Lyft is still a minority in the US while spending more money? There's something more interesting here.
It's not unreasonable, people do it all the time. Look at the window stickers in a rideshare, if they've got one they've got four, all around Seattle.
Re: Uber S-1
#114So... Let me see if I have this straight: 1. Uber is unprofitable and the only way it can become profitable is to get SDC's 2. Uber is significantly (years) behind Waymo in the SDC space. 3. Waymo will launch SDC taxi services first meaning: - When it puts in an order for SDC components no one else is going to be buying in bulk and thus it can have effectively 100% of capacity of these specialized equipment makers -…
To keep the math simple: It's worth the amount a greater fool will pay for it.
Re: Uber S-1
#115Earlier quoted context omitted.
Ive heard from reliable sources 10% of Uber Eats revenue goes to McDonald’s (not promotionally, in revenue)
Wow, that many people are ordering delivery McDonald's? Maybe McDonald's should start delivery services in some markets itself then?
Why would McDonald's want to do the delivery if Uber volunteers to do it losing money?
Re: Uber S-1
#116Earlier quoted context omitted.
> Lyft now at $61/share, ouch, there just is no other way to put it. THey pulled a lot of financial engineering tricks to boost their IPO price and well the results speak for themselves:( I don't understand why this is seen as a negative. An IPO is a share issuance — the higher the price per share, the more money they receive in exchange for the same percentage of the company. Post-IPO "pops" represent money left on…
It's a good thing for Lyft-the-corporation but a bad thing for anyone who bought into the IPO. Any sort of financial engineering tricks that goose the accounting numbers without affecting the long-term health of the business are basically a transfer payment from people who buy in at the inflated price to entities who sell at the inflated price. It's rational for the company to try to pull them; it's also rational for…
It's also a bad thing for all the employees and investors as they have 180 day lock-in before they can cash out.
Re: Uber S-1
#117So... Let me see if I have this straight: 1. Uber is unprofitable and the only way it can become profitable is to get SDC's 2. Uber is significantly (years) behind Waymo in the SDC space. 3. Waymo will launch SDC taxi services first meaning: - When it puts in an order for SDC components no one else is going to be buying in bulk and thus it can have effectively 100% of capacity of these specialized equipment makers -…
> can't imagine how Uber is worth anything If the operation doesn't make an economic profit, and if there isn't sufficient moat to defend the operation until it can become profitable, then I agree with you it's not worth anything. But in fact, Uber does have a massive moat -- its network of drivers and riders in thousands of cities around the world. No competitor is even close. It takes tremendous capital expenditure…
>But in fact, Uber does have a massive moat -- its network of drivers and riders in thousands of cities around the world. No competitor is even close.
Merely being ahead of competitors isn't a moat, it would have to be something that makes "entering into serious competition" difficult for any new entrants. Uber already lacks the monopoly power to raise prices significantly because of competition from Lyft and local providers.
TNCs do experience network effects, but it's nothing like e.g. operating systems or social networks.
Re: Uber S-1
#118So... Let me see if I have this straight: 1. Uber is unprofitable and the only way it can become profitable is to get SDC's 2. Uber is significantly (years) behind Waymo in the SDC space. 3. Waymo will launch SDC taxi services first meaning: - When it puts in an order for SDC components no one else is going to be buying in bulk and thus it can have effectively 100% of capacity of these specialized equipment makers -…
The assumption that SDCs are going to completely overtake the market is a huge one and is unwarranted. This puts all the cost of building and maintaining a fleet on Waymo, or whoever is first to market. While it cuts out the cost of a human driver, it's not at all clear to me that this is cheaper in net. Furthermore, a completely robust SDC able to handle all climates and weather in which a human driver is at least n…
While this is true, it's the only proposed path to Uber being profitable. They lose money on every human-driven ride and have no approach to remedy that situation. So if SDCs aren't coming any time soon, or if they aren't any cheaper than human drivers, I'm not sure that's any better for Uber's prospects...
Re: Uber S-1
#119Earlier quoted context omitted.
You can't imagine any scenario under which an 11 billion dollar money printing machine which is growing and costs 11 billion + 3 billion to run can turn cash flow positive?
When your business is selling $10 for $5 then no, I cannot see a way to turn cash flow positive.
Your example isn't proportionate. It's selling $14 for $11, which is much closer to selling $10 for $8, which is a lot more reasonable than $10 to $5.
Re: Uber S-1
#120So... Let me see if I have this straight: 1. Uber is unprofitable and the only way it can become profitable is to get SDC's 2. Uber is significantly (years) behind Waymo in the SDC space. 3. Waymo will launch SDC taxi services first meaning: - When it puts in an order for SDC components no one else is going to be buying in bulk and thus it can have effectively 100% of capacity of these specialized equipment makers -…
> can't imagine how Uber is worth anything If the operation doesn't make an economic profit, and if there isn't sufficient moat to defend the operation until it can become profitable, then I agree with you it's not worth anything. But in fact, Uber does have a massive moat -- its network of drivers and riders in thousands of cities around the world. No competitor is even close. It takes tremendous capital expenditure…
The driver network is worth precisely zero as a competitive moat if (and only if) you are competing against a company with self driving cars. The customer network is a competitive edge but it is also far less sticky than having a robust network of drivers that riders can depend on.