391–400 of 405 posts
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what's the cost of the driver? seems marginal compared to the cost of the cars
If that were true (I have no info either way), wouldn't that mean most drivers have no clue the true cost of working for Lyft/Uber? All they see if free money, but aren't factoring in repairs.
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Lyft has enriched its investors far more than any baseball player could even dream of. You're just looking at accounting losses. But when this IPOs, early stage investors will have all made billions.
But that's not creating value. Unless the lottery creates value for people who buy the right tickets.
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Their sales and marketing is 25% of their expenses, and it’s not clear to me how much of that is driver incentives. Even if they cut all driver incentives and marketing they’re still in the hole.
It looks like sales and marketing only includes driver incentive's due to driver referrals. Referrals are likely a low number compared to the 'guaranteed minimum' incentives used in new markets. Looks like the other driver incentives may not be included in revenue? >This four percentage point improvement in Revenue as a Percentage of Bookings was driven by greater efficiency and effectiveness of driver incentives, wh…
Revenue is money they take in. If they pay drivers a minimum it will be an expense. I’m assuming under “cost of revenue” or “sales and marketing”, since they don’t categorize drivers as employees but contractors.
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Still, a $150M-90M personal net worth at the 18B-30B valuation window. They're not going to starve either.
I know a couple of bootstrapped founders running businesses with $10M+ ARR. They own the business in full. Any exit event would net them the same figure as Lyft's founders. Makes you wonder if raising money to run a business like Lyft is worth it from a personal financial perspective. The bootstrapped founders I mentioned are extremely satisfied with no outside interference or investors breathing down their necks But…
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All of that is ignoring payroll taxes (for your new, very large staff), shifting all of your tax-deductible operational expenses into tax limited capital expenses. Businesses don't flagrantly throw around money just to upset people. There are huge advantages to offloading non-primary business costs to other businesses. Netflix is doing this too. I think we can assume not all of them are just idiots that haven't figur…
> Businesses don't flagrantly throw around money just to upset people. But businesses do throw around money for the wrong reasons, and keep on doing so if that's the status quo. No one gets fired for buying IBM. > Netflix is doing this too. IBM stuff was bought by a lot of people. > I think we can assume not all of them are just idiots that haven't figured out they could build this themselves. That statement is very…
Businesses are wasteful because that's the natural status of a bureaucracy. They aren't throwing away money on infrastructure because they are unaware, they are spending more than they potentially have to because infrastructure isn't their core business.
> IBM stuff was bought by a lot of people.
That's such a tired argument. Just because they could save money doesn't mean it's a good idea, and with Enterprise pricing from Amazon combined with tax advantages, you honestly have no idea how much "cheaper" it really is.
> That statement is very misguided and misses the problem. For example if you built your infrastructure around a specific solution then you also end up building a team of professionals whose livelihood is tied to a specific supplier of said infrastructure.
No, the fact that you think this is a "problem" is the problem. Do you honestly think dev ops guys couldn't figure out how to use a different tool? By your own logic, you also shouldn't build data centers because you end up building a team of professionals whose livelihood is tied to managing your own infrastructure.
It looks like they spend a bunch of pages on rider retention and gloss over what I think is the primary issue for the gig economy: provider retention. It's just like Groupon, you can't have a good sell-through product indefinitely if the service providers aren't happy and churn at a high rate. Sooo... what's the churn for the drivers?
I'm not sure how that's a big deal for Lyft. It seems like a pretty healthy supply and demand curve -- if the number of drivers drops, it becomes more profitable to be a driver. And there's always people looking for supplemental work, who'll go where the money is. I suppose the part I'm missing is the reduction in riders if there's not enough drivers, but that is apparently not a huge issue (according to their rider-…
And if you look around at what they spend all of this money on, it's incentives and marketing towards drivers (as well as insurance). That's a lot of churn given the loss they're taking on these expenses towards drivers.
Re: your other point about demand. A piece of anecdata that weighs on my mind is, 10 years ago, there was some extreme economic disincentive for a cabbie to come to my residential neighborhood. Uber's black car service was a godsend, even though it cost twice the price of a cab. The supply/demand curve made sense, since I was paying more for my sparse neighborhood.
Now I get 10x quicker service for half of the cab cost and a quarter or less of the black car cost. Wat.
What I want to know is whether this is because there's a supply of 96% of yearly suckers who come to my neighborhood without doing the math like cabbies in 2009? Or is it just that Uber/Lyft is dumping incentives on them? Because my neighborhood hasn't become more dense, and the math got far worse for the driver.
I keep wondering what a reversion to this norm means for Uber and Lyft. If drivers have a lot more pricing power through churn, is 2009-cab-refuses-to-come what it looks like? If you can't get a car due to supply constraints, somehow would that be good for these companies?
Anyway, it seems like Uber/Lyft pour most of their money into making drivers happy, and yet they fail to keep them on "the platform". I don't know the full ramifications of it, but it seems like a major issue.
[1] - https://www.cnbc.com/2017/04/20/only-4-percent-of-uber-drive...
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No, most companies do not work this way. Most companies that lose this staggering amount of money go out of business quickly. We are living in a time of "eventual profitability" where some companies have immense privilege to lose an immense amount of money, are encouraged to lose it to build a large company in hopes of creating a sustainable model. Right now there's not even profitability on the horizon. Losses incre…
No offense but Amazon did exactly this for nearly 2 decades. I don't know why you think Lyft is somehow an exception to the rule. They aren't. Hyper Growth is not the stage you start looking at P/L statements. If they were generating big profits, there would be little point in going public at all.
Go through their financial statements. They were barely profitable on a GAAP basis for a long time. Barely profitable is entirely different from massively bleeding money. Barely profitable means they were making profits but reinvested them into their business.
The stories are entirely different.
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Right? Even if autonomous taxis _is_ their endgame, why couldn't companies that actually produce the cars do it cheaper? Almost all of them are heavily investing in it right now, some are even partnering up with companies that know how to do a lot of it. I don't see how this works out for Lyft or Uber. To me it just looks like they'll both eventually run out of money and get squashed. Maybe I'm missing something?
Why couldn't companies that actually produce cars just rent them out? I'd really like to have a mono-brand short-term rentals, but they just don't exist. Why is the case different for taxis?
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No offense but Amazon did exactly this for nearly 2 decades. I don't know why you think Lyft is somehow an exception to the rule. They aren't. Hyper Growth is not the stage you start looking at P/L statements. If they were generating big profits, there would be little point in going public at all.
No offense, but you're exceptionally wrong. Go through their financial statements. They were barely profitable on a GAAP basis for a long time. Barely profitable is entirely different from massively bleeding money. Barely profitable means they were making profits but reinvested them into their business. The stories are entirely different.
Their stories are not entirely different, they are extraordinarily similar. Both nascent markets, both money losers at IPO, both needed cash to continue their growth story.
Do you understand the purpose of an IPO? It's a funding round. If you have a ton of cash on hand, or your profitable but don't have a growth area that requires large capital, there's literally no reason to go public.
That's why Lyft is going public now and nobody is talking about Airbnb. The former needs cash to continue it's massive growth in new markets, the latter is a profitable company with low capex that doesn't need a funding round.
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Route53 is okay. Has an API that is incompatible with BIND. There are many other, better providers. Still, it's cheap, so who cares. RDS doesn't really scale without costing a fortune. It buys you HA and backups. Great, but what if you need performance? DynamoDB? It scales in terms of IOPS, but again, it's unaffordable. SNS exists and isn't terrible, but why wouldn't I just run Kafka?
My forecasting on RDS is that it’s a dead-end product – all the future hotness is going to be in Aurora Serverless. Multi-region active/active Postgres with totally usage-based pricing and totally elastic performance is going to be a game-changer. But if you need bleeding-edge Postgres performance, you hire a DBA, and they probably build something on EC2 or bare metal. ——— As I understand it, RabbitMQ is probably a b…