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

Lyft losing as much as $50M a month, president confirms

siliconbeat.com

Post reply on HN
Print view View original

51–60 of 114 posts

Re: Lyft losing as much as $50M a month, president confirms

#51

Post by vadym909 »

niftich wrote: post #17
liquidise wrote: post #7

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. [1] https://rush.uber.com/how-it-works EDIT: after the introduction of courier services, picking up passengers serves as a baseline load…

Seriously- FedEx, UPS, Walmart have incredibly efficient logistics and operate with very thin margins. If Uber Lyft are relying on going up against them instead of the inefficient taxis- they are seriously smoking something illegal.

Re: Lyft losing as much as $50M a month, president confirms

#52

Post by alsetmusic »

freyir wrote: post #49
niftich wrote: post #17

Earlier quoted context omitted.

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. [1] https://rush.uber.com/how-it-works EDIT: after the introduction of courier services, picking up passengers serves as a baseline load…

> 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 So people will drive their sedans around the city delivering flowers and cakes and laundry? And instead of picking up flowers at the flower store, or laundry from the laundromat down the street, I'll pay $5 more for everything to have it delivered? Uber and Lyft's master plan f…

I pay extra to get my groceries delivered because it saves me time. I also tested same-day delivery services from Amazon and Apple in the last several months. Amazon is a little different, but my local Apple Store and supermarket are pretty close. However, I used to suffer a grueling commute and it made me hate driving. I'm now happy to pay someone to reduce the time that I have to spend behind the wheel.

Re: Lyft losing as much as $50M a month, president confirms

#53

Post by freyir »

alsetmusic wrote: post #52
freyir wrote: post #49

Earlier quoted context omitted.

> 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 So people will drive their sedans around the city delivering flowers and cakes and laundry? And instead of picking up flowers at the flower store, or laundry from the laundromat down the street, I'll pay $5 more for everything to have it delivered? Uber and Lyft's master plan f…

I pay extra to get my groceries delivered because it saves me time. I also tested same-day delivery services from Amazon and Apple in the last several months. Amazon is a little different, but my local Apple Store and supermarket are pretty close. However, I used to suffer a grueling commute and it made me hate driving. I'm now happy to pay someone to reduce the time that I have to spend behind the wheel.

I know that Instacart/Postmates/etc. exist, are convenient, and are used by some people. I'm just skeptical that this is Uber's plan for "superior returns." I'm skeptical that driving bouquets and salads and clothes around town will be significantly more profitable than driving passengers.

Re: Lyft losing as much as $50M a month, president confirms

#54

Post by argonaut »

arachnids wrote: post #35
argonaut wrote: post #18

Earlier quoted context omitted.

Uber claims to be profitable in the US already, and it's their massive competition with Didi in China where they're burning cash ($1B/year). http://fortune.com/2016/02/18/uber-profitable-us/

"not including “interest, taxes, and equity-based compensation for employees", so in terms of whether the company will survive / current employees will ever see payday, I don't think that means anything.

Where did you get that quote? It's not in the article.

Re: Lyft losing as much as $50M a month, president confirms

#55

Post by supercoder »

jonknee wrote: post #12
tastynacho wrote: post #5

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.

Yeah my Uber driver when I was in SF gave me $50 Lyft credit, so I just switched over, used the credit and then went back to Uber when it was finished.

Re: Lyft losing as much as $50M a month, president confirms

#56

Post by [deleted] »

niftich wrote: post #17
liquidise wrote: post #7

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. [1] https://rush.uber.com/how-it-works EDIT: after the introduction of courier services, picking up passengers serves as a baseline load…

[deleted]

Re: Lyft losing as much as $50M a month, president confirms

#57

Post by argonaut »

_Codemonkeyism wrote: post #29
argonaut wrote: post #24

Earlier quoted context omitted.

In the abstract, breaking up monopolies is the canonical example.

Breaking up monopolies raises prices? You've lost me :-)

Less regulation = not breaking up a monopoly = higher prices.

Re: Lyft losing as much as $50M a month, president confirms

#58

Post by patd »

argonaut wrote: post #54
arachnids wrote: post #35

Earlier quoted context omitted.

"not including “interest, taxes, and equity-based compensation for employees", so in terms of whether the company will survive / current employees will ever see payday, I don't think that means anything.

Where did you get that quote? It's not in the article.

http://uk.businessinsider.com/uber-says-its-profitable-in-th...

Re: Lyft losing as much as $50M a month, president confirms

#59

Post by graeham »

liquidise wrote: post #7

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…

Reminds me a bit of Groupon etc - its easy to get revenue when you're selling dimes for dollars.

Fixed costs are presumably low, so it can't be scale that would lead to profitability.

Utilisation rates? I've not heard a lot on if rates could come down to compensate for more passenger-miles. But of course a fair bit of the cost must be tied to passenger-miles.

Intentional avoidance of profit by acquiring or R&D? I suppose this could be the play for self-driving cars in the future. As you say, automated cars seem to be the easiest way to drop the passenger-mile cost. But I don't know if automated cars will be a winner-takes-all market, at least globally and in a way that would lead to monopoly-like profitability.

Re: Lyft losing as much as $50M a month, president confirms

#60

Post by petra »

liquidise wrote: post #7

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 is it whenever we're discussing UBER/Lyft, everybody forgets the shared rides model(2+ passengers per car)? a model that has pretty strong network effects once achieved, and that may be a decent alternative to the private car, even without self-driving.
Post reply on HN