Lyft losing as much as $50M a month, president confirms
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Lyft losing as much as $50M a month, president confirms
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Re: Lyft losing as much as $50M a month, president confirms
#2I'm somewhat more optimistic that Lyft will fare better in certain cities than Uber because they seem more willing to work with governments and seem like less of a "bully" (although they did act the same as Uber in Austin recently...), but they also seem to wait until Uber goes into a city and kind of lets them take the brunt of the assault in the hopes that they will fare better.
However, hearing that they're losing up to 50MM per month is quite disconcerting, and it makes me wonder how much time they have and if they will break even. Even at a large valuation ($25 billion if I remember right?) they seemingly can't continue at such a loss without a drastic change to their business model or continuous large outside investment. I think one of better things they could do is really use their positive PR as a strong advantage, because they don't have major blunders like Uber (e.g. Uber gets $3 billion investment from Saudi Arabian investment fund and adds one of their managers as a board member).
Re: Lyft losing as much as $50M a month, president confirms
#3$50 million burn rate per month? Time to go public!
That president broke a cardinal rule of VC-backed startups -- never reveal your numbers. Although some do, admittedly.
But at that rate of burn, it's pretty surprising he got approval to disclose that. If I'm an LP -- looking at the #2 in the space -- and they're treading water against #1 while losing $50M a month -- I'd rather check out the #1 in the space.
Although Uber's burn rate is also quite high -- losing $1 billion dollars in China alone: http://money.cnn.com/2016/02/19/technology/uber-losing-1-bil...
Re: Lyft losing as much as $50M a month, president confirms
#4I'm somewhat more optimistic that Lyft will fare better in certain cities than Uber because they seem more willing to work with governments and seem like less of a "bully" (although they did act the same as Uber in Austin recently...), but they also seem to wait until Uber goes into a city and kind of lets them take the brunt of the assault in the hopes that they will fare better. However, hearing that they're losing…
I've been seeing nothing but ads around here for 50 dollars free and I know some people that have been taking advantage of it. Maybe they should scale that back.
Re: Lyft losing as much as $50M a month, president confirms
#5Can someone please explain how its possible to lose that much money? What exactly does that 50M constitute?
Re: Lyft losing as much as $50M a month, president confirms
#6Can someone please explain how its possible to lose that much money? What exactly does that 50M constitute?
I would assume it has to did with user acquisition costs or promotions in cities to re-engage existing users.
Re: Lyft losing as much as $50M a month, president confirms
#7What 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 to believe this will change over time. Instead, it feels like the human drivers are really just plays to keep the company growing until hypothetical fleets of automated driving cars. In theory, such a fleet would deliver massive profits, but those fleets will be enormously expensive to assemble. Even when they are assembled each company should expect tumultuous legal battles in many areas.
When i try to make all the monkey math work, it doesn't seem to add up. Maybe i'm not enough of a gambling man, but i really don't understand how the venture market still supports business models like these.
Re: Lyft losing as much as $50M a month, president confirms
#8I'm somewhat more optimistic that Lyft will fare better in certain cities than Uber because they seem more willing to work with governments and seem like less of a "bully" (although they did act the same as Uber in Austin recently...), but they also seem to wait until Uber goes into a city and kind of lets them take the brunt of the assault in the hopes that they will fare better. However, hearing that they're losing…
The other downside of waiting until Uber has done the heavy lifting is that it universally gives Uber a first mover advantage in every new market.
Meanwhile Uber is expanding around the entire world while Lyft is still struggling with the US.
Re: Lyft losing as much as $50M a month, president confirms
#9This might be a dumb question. How does that compare to Uber? I see Uber has been raising like a billion dollars every month I'm guessing their spending is a lot higher (especially having something ridiculous like 5000 non-driver employees).
Re: Lyft losing as much as $50M a month, president confirms
#10What 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…
I think the play is more or less to strangle the higher priced and over-regulated patchwork taxi industries and build a more uniform national/international regulatory framework that's more amenable to these kinds of businesses. At that point prices will probably rise, and (they hope, and I think they're right) customers will see value in the better product that keeps them in.