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Lyft’s revenues double, losses quintuple and prospects darken

economist.com

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Re: Lyft’s revenues double, losses quintuple and prospects darken

#91

Post by britch »

Invictus0 wrote: post #30
Spooky23 wrote: post #17

Earlier quoted context omitted.

Drivers are independent agents who have every right to demand better conditions. It’s especially important to chisel every penny out of a company that will likely vanish in a short number of years. Lyft has bled money from day 1, so justifying stiffing the workers on the basis of accelerating losses isn’t logical at all. Now that the investors have cashed in, perhaps they can double down on patents on robo-cabs and s…

How can you say that Lyft is "stiffing" the drivers when they lose money on every ride? Where is the extra money for the drivers supposed to come from? Every passenger has the opportunity to tip if they want: would you also say that restauranteurs are stiffing the waitstaff?

It's possible to pay out an unfairly low wage with money you don't have. I'm not saying that's the case with Lyft, but just because you're operating at a loss doesn't mean you're paying people fairly for their work.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#92

Post by misiti3780 »

OliverJones wrote: post #76

Fundamentals question: Can somebody explain how these ridesharing companies expect to turn a profit, eventually? If you lose 50 cents on every ride, how do you make it up in volume? Every ride is subsidized by the Sand Hill Road crowd. They're a great deal. I took a 40-min ride yesterday for US$12.50 in a high-cost-of-living traffic-clogged city. How can that make sense? A ride in a sketchy 1970s-era New York City gy…

Not to mention autonomous vehicles are most likely years away from happening

Re: Lyft’s revenues double, losses quintuple and prospects darken

#93

Post by BurningFrog »

hellllllllooo wrote: post #75
wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

> but this is a gig / 'work only when you want This is not 'a work only when you want' job. People do it full time to feed their families and after doing it for years find it difficult to move to a different role for a variety of factors. I'm sure they would go get a better paying job elsewhere if it was easy. It used to be a 40 hour job when they joined but Uber/Lyft have gradually reduced earnings. Now it's 60-70 h…

What you're describing is that people want to work 60-70 hours/week.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#94

Post by eswat »

CPLX wrote: post #64
m_ke wrote: post #53

Earlier quoted context omitted.

I'm convinced that the end goal is being the last one standing. Either one of them failing would guarantee a monopoly for the other and make it easier to play with the margins.

> Either one of them failing would guarantee a monopoly for the other Why? Is there some reason someone else couldn't make a basic app-based service to get taxi rides?

You can’t get away with making a basic alternative when you have players like Uber, Lyft, Grab, etc. that have refined the entire experience.

The alternatives I’ve tried in Canada succumb to failing miserably to even get the app experience right. There’s an extra level of competency needed to get an alternative to be considered competition.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#95

Post by HoyaSaxa »

chollida1 wrote: post #4

When Lyft was doing their road show there were a few analysts who had price targets of $45 as Lyfts fair value at IPO with an acknowledgement that the amount of shares available would double, and possibly triple when all shares were off restriction, meaning that the $45 price target was a best case and we would probably see far lower once people can sell. This is a company that has maybe 33 million shares outstanding…

Shorts very rarely actually get closed out by a prime broker (at least for institutional investors). The stock borrow world is very inefficient, but when a forced buy is on the line the PB will almost always find more supply. Especially with a presumably large retail long base, the retail brokers like TDAmeritrade will literally start calling up long positions to offer to pay for the rehypothecation rights. Others like robinhood have that as part of their terms.

However, your commentary around quick upward price action is still valid.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#96

Post by CPLX »

m_ke wrote: post #80
CPLX wrote: post #64

Earlier quoted context omitted.

> Either one of them failing would guarantee a monopoly for the other Why? Is there some reason someone else couldn't make a basic app-based service to get taxi rides?

Because they'll be able to undercut any small competitor that attempts to enter one of their markets by subsidizing it with revenue from everywhere else.

Not really. It’s a large market with almost no barrier to entry.

Either they have huge margins or they don’t. If they do have large margins someone will come along and attack the most profitable segment of the business. That could be airport rides, or having extra cars outside the end of a sporting event, or whatever.

As long as switching costs for customers are low then they can’t defend high margins. For monopoly to work you either have to corner supply somehow or lock the customers in. There’s no plausible mechanism for either with taxi services.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#97

Post by sjg007 »

strikelaserclaw wrote: post #38

I don't know what the end game for these companies is. Most average people would never use uber or lyft for transportation on even a semi regular basis if those companies didn't heavily subsidize the rides.

I would. I hate regular taxis. I’d only use a taxi if I could order and pay for it via Uber or Lyft.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#98

Post by CPLX »

Domenic_S wrote: post #79
CPLX wrote: post #61

Earlier quoted context omitted.

In short, no. I read this in literally every HN discussion of ride sharing, but there's literally no reason to think that ride sharing companies will have any special role to play with autonomous vehicles if they materialize (which seems extremely doubtful in the short or medium term) and there's even less evidence that it will be cheaper. I still can't figure out why people don't realize that low income humans are c…

There are a ton of factors that make your DSLR to Autonomous Car comparison flawed. The utilization rate of the camera is going to be far lower than the rate of the car. The camera may sit on a shelf for weeks before being rented for a single day, so the per-rental price must be relatively high. The market is small. Also, cameras are comparatively easy to break, and the technology goes out of date extremely quickly a…

> There are a ton of factors that make your DSLR to Autonomous Car comparison flawed.

Indeed. The biggest one of course being that there’s no such thing as an autonomous car.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#99

Post by Robadob »

onlyrealcuzzo wrote: post #71
SilasX wrote: post #11

Earlier quoted context omitted.

That would only be true if their unit profits were low or negative. On each ride they make a lot of money. They lose money because of their huge, ride-count-independent fixed costs, like legal defense and marketing. So it's not necessarily true that giving the riders a larger cut would widen the loss, if it came with a scale-back on all the marketing.

I cannot understand why Uber needs 22k employees. I get it that WhatsApp and StackOverflow and Instagram have/had a lot less legal, financial, and marketing requirements. But Uber has almost 1000 times the amount of employees WhatsApp, Instagram, and StackOverflow had when they reached similar scale. I get it that there's a lot more analytics and geospatial complexity in Uber. I get it that they have to manage tens (…

Uber has around 25 offices in the UK alone. Most are required for local regulation afaik. If this is scaled across the US and Europe that could easily run into hundreds of offices, inflating their employee count for relatively minor employees.

https://www.uber.com/en-GB/drive/resources/contact-us/

Re: Lyft’s revenues double, losses quintuple and prospects darken

#100

Post by baxtr »

chollida1 wrote: post #4

When Lyft was doing their road show there were a few analysts who had price targets of $45 as Lyfts fair value at IPO with an acknowledgement that the amount of shares available would double, and possibly triple when all shares were off restriction, meaning that the $45 price target was a best case and we would probably see far lower once people can sell. This is a company that has maybe 33 million shares outstanding…

For me it’s really difficult to comprehend what you describe. I think it’s super interesting though. Is there any way you could tell the story for a layman?
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