Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Lyft Files to Raise as Much as $1B

techcrunch.com

Post reply on HN
Print view View original

41–48 of 48 posts

Re: Lyft Files to Raise as Much as $1B

#41

Post by danieltillett »

mahyarm wrote: post #39
danieltillett wrote: post #38

Earlier quoted context omitted.

This sort of stimulus is like paying people to dig holes and fill them back up again. Given the money being spent is mostly workers pensions I am not too sure that this is the best use of their future retirement income.

No it's more like providing very cheap transit fares, or free maid service. It's a useful transient service to most people who's value doesn't show a specific investment benefit like free daycare would. Digging ditches and filling them again provides no economic side value.

No it really is like digging holes. There is no long term value being created here. If they could afford to subsidise cheap transport indefinitely then there might be some value, but providing a service like this for a short period of time is providing no long term economic benefit.

We would be better off calling one side the winner and just giving each person using uber and lyft the subsidy in cash and letting them spend it in the most efficient manner.

Re: Lyft Files to Raise as Much as $1B

#42

Post by HappyTypist »

argonaut wrote: post #26
HappyTypist wrote: post #15

Earlier quoted context omitted.

Uber lost 470m/period. As the article mentions, these figures are outdated by a number of years and completely irrelevant - Uber is hitting more than 2.5 billion in revenue (commission) this year. According to public information, Lyft is losing approximately 3 to 5 times the amount of money per ride .

If those numbers are indeed out of date (I'm not taking an Uber spokesperson's word for it), I would be inclined to believe they are losing even more than $470M/period, given their extremely aggressive expansion and extremely aggressive fundraising.

In China, yes, but recent Uber aggression has been anything but aggressive. Just look at driver referral incentives been slashed from $750 to $200 (if you're lucky).

Re: Lyft Files to Raise as Much as $1B

#43

Post by mahyarm »

danieltillett wrote: post #41
mahyarm wrote: post #39

Earlier quoted context omitted.

No it's more like providing very cheap transit fares, or free maid service. It's a useful transient service to most people who's value doesn't show a specific investment benefit like free daycare would. Digging ditches and filling them again provides no economic side value.

No it really is like digging holes. There is no long term value being created here. If they could afford to subsidise cheap transport indefinitely then there might be some value, but providing a service like this for a short period of time is providing no long term economic benefit. We would be better off calling one side the winner and just giving each person using uber and lyft the subsidy in cash and letting them…

My examples were short term benefits. Once the transit fares are not cheap anymore, or the maid service stops, then the benefit goes away. But people still had a short term benefit.

Digging holes and filling them has zero economic benefit. That is the difference.

Re: Lyft Files to Raise as Much as $1B

#44

Post by madebylaw »

raz32dust wrote: post #32
brianwawok wrote: post #11

Earlier quoted context omitted.

Unless one brings robot taxis. Lowest price and highest profits. Right now it's just an app for taxis. But robots totally flip the market on head.

I don't see how this will fly even with robot taxis. Not for too long at least. I think self driving cars will be commoditized easily. Any new player can simply leverage the technology. The economy of scale is simply not there in this business, compared to the leverage Google and Facebook have. There is hardly any network effect, and it is still highly capital intensive even with robot cars. So while they may succeed…

Completely disagree regarding the network effect of Uber vs. Lyft. The system is highly network dependent. Most Uber drivers would prefer to drive for Lyft because Lyft pays more (partially why they're losing more money than Uber), but in most markets Lyft doesn't have as many riders that use the service. As a driver, you want to maximize time spent with a fare vs. fare-hunting. Similarly, as a rider, you are weighing price vs. time meaning most people will pay more $ to wait less for their ride.

Most drivers I talk to drive for both and keep both on, but get more pings on Uber than on Lyft. In SF Lyft has more mind-share and it's a more even split.

FWIW I've lived in both SF and NYC since the rise of these services.

Re: Lyft Files to Raise as Much as $1B

#45

Post by raz32dust »

madebylaw wrote: post #44
raz32dust wrote: post #32

Earlier quoted context omitted.

I don't see how this will fly even with robot taxis. Not for too long at least. I think self driving cars will be commoditized easily. Any new player can simply leverage the technology. The economy of scale is simply not there in this business, compared to the leverage Google and Facebook have. There is hardly any network effect, and it is still highly capital intensive even with robot cars. So while they may succeed…

Completely disagree regarding the network effect of Uber vs. Lyft. The system is highly network dependent. Most Uber drivers would prefer to drive for Lyft because Lyft pays more (partially why they're losing more money than Uber), but in most markets Lyft doesn't have as many riders that use the service. As a driver, you want to maximize time spent with a fare vs. fare-hunting. Similarly, as a rider, you are weighin…

But that type of network effect is easily undermined by a service that offers cheaper fares. I saw this happen first-hand in India where Ola cabs, which was being used by almost everyone, quickly started losing users to Uber once Uber started their massive discounts and promotion series in India.

Re: Lyft Files to Raise as Much as $1B

#46

Post by danieltillett »

mahyarm wrote: post #43
danieltillett wrote: post #41

Earlier quoted context omitted.

No it really is like digging holes. There is no long term value being created here. If they could afford to subsidise cheap transport indefinitely then there might be some value, but providing a service like this for a short period of time is providing no long term economic benefit. We would be better off calling one side the winner and just giving each person using uber and lyft the subsidy in cash and letting them…

My examples were short term benefits. Once the transit fares are not cheap anymore, or the maid service stops, then the benefit goes away. But people still had a short term benefit. Digging holes and filling them has zero economic benefit. That is the difference.

Providing a service that is not sustainable will have more negative long term effects than digging holes. Digging holes is just a means of transferring cash to the hole diggers, creating a service that people start to use will create negative externalities once removed (people take jobs further from where they live because the cost of transport is lower, or all alternative transport services like taxis go out of business). If the externalities are greater than the short term benefit then the overall economic benefit will be negative.

I see a price war that results in a loss of transport competitors as being long term negative. This doesn’t exist with hole digging.

Re: Lyft Files to Raise as Much as $1B

#47

Post by yueq »

xiaoma wrote: post #30
yueq wrote: post #12

Earlier quoted context omitted.

Uber has very little chance to win China market considering competition from Didi which is backed by Tencent and Alibaba. Considering the insurmountable dominance of Tencent's Wechat and Alibaba's AliPay on mobile phones in Chinese market. Some reports that Didi has 80+% market in China and Uber gets 10+%.

Baidu was a strategic investor in Uber, and they lead another $1.2B round a couple of months ago. Both companies have local giants backing them, so anything can happen. If I had to bet, though, I'd bet on Uber winning in China if they can win enough of the rest of the world. http://techcrunch.com/2015/09/07/uber-confirms-its-raised-1-...

I know this but BIDU is leaving first tier internet companies in China. This can be seen from its market cap which is almost a third of alibaba or tencent.

No matter what you bet -- you should always bet on something you can control not others.

Re: Lyft Files to Raise as Much as $1B

#48

Post by yueq »

tim333 wrote: post #28
yueq wrote: post #12

Earlier quoted context omitted.

Uber has very little chance to win China market considering competition from Didi which is backed by Tencent and Alibaba. Considering the insurmountable dominance of Tencent's Wechat and Alibaba's AliPay on mobile phones in Chinese market. Some reports that Didi has 80+% market in China and Uber gets 10+%.

Yeah but Didi's offering is a ride hailing app for regular taxis while Uber is doing the 'black car' thing. So they are kind of differentiated. Also Uber are partnered with Baidu, the Google of China so they can have Uber fares pop up when people google stuff. Or should that be baidu stuff? Dunno.

Not really.

Didi has multiple products already aside from taxis. limo/black-car, ride-share, valet which is far more than illegal-taxi-only in Uber China.

China explicitly requires license for commercial taxi operations. So UberX's business model is at great regulation risk.

Post reply on HN