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Lyft Files to Raise as Much as $1B

69 points by adoming3 11y ago

danso 11y ago
How big is the gap between Lyft and Uber in India and China and other large Asian markets? In China, is there a state-favored rival [1] that could just shut out both? From an American perspective, it's hard to imagine Lyft overcoming Uber's lead...but maybe it's a sensible investment if Lyft has a strong chance of being bought by an Asian company? [1] edit: Found this Fortune article, which describes Didi-Kuaidi as the "Uber of China" with 1 million drivers versus Uber's 100,000 drivers. Also, Didi is an investor in Lyft: http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/ http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/
- eva1984 11y ago
  Lyft is like non-exist in China. Uber is currently second to Didi with about one third of its market share.
  - deleted 11y ago
    [deleted]
- mayukh 11y ago
  http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-partner-in-global-tech-service-alliance-to-rival-uber/#.yci6ue0:F7fa http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-... It's all one big fu to uber
  - Apocryphon 11y ago
    Perhaps they should name this alliance G.O.L.D.
- yueq 11y ago
  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+%.
  - tim333 11y ago
    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.
    - yueq 11y ago
      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.
  - xiaoma 11y ago
    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-1-2b-more-in-china-led-by-baidu-as-rival-didi-kuaidi-gets-3b/ http://techcrunch.com/2015/09/07/uber-confirms-its-raised-1-...
    - yueq 11y ago
      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.
tswartz 11y ago
>Amid reports of Lyft’s financial struggles in its recently leaked financials, it’s obvious why the company seeks to raise so much money — the on-demand transportation market is a tough place to operate, especially with competition like Uber. According to Bloomberg, the ridesharing startup took a net loss of $127 million in the first half of this year while bringing in less than $47 million in revenue. Does anybody know how this loss compares to Uber? I don't recall any of their financials being leaked recently.
- rtpg 11y ago
  I don't remember the details, but I think Uber showed a similar revenue/loss ratio... There was HN discussion about it and the main thing people were saying is there's an opportunity cost in not spending the money (mainly in expansion). I kind of feel like Uber is in a bit of a "monopoly or bust" position though, using similar 4X techniques to our former favorite tech boogieman (subsidizing driver rates then removing subsidies once growth stops...). Not quite sure what Lyft is using its money for, though. My impression is there strategy is to not be jerks and focus on US only for now. Guess this is a "good guys lose" situation...
- argonaut 11y ago
  Uber loses at least $470M / year, if not more (unsure if the number is per quarter, half-year, or full year) [1]. Lyft's struggles have nothing to do with their losses, and all to do with the fact that they're losing the market to Uber. [1] http://www.businessinsider.com/uber-reportedly-operating-at-a-470-million-loss-2015-6 http://www.businessinsider.com/uber-reportedly-operating-at-...
  - HappyTypist 11y ago
    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.
    - 11y ago
msoad 11y ago
Taxi fare is something everyone wants to save on. Once Uber and Lyft start making big margin on their service other low key and smaller companies can compete with them. Pretty much like airfare. Price is the king and low cost companies are doing a lot of business. I'm not sure how this Uber/Lyft story will end but I'm pretty sure it's not going to end like Facebook or Google.
- brianwawok 11y ago
  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.
  - jacquesm 11y ago
    Too early. They'll run out of cash long before 'robot taxis' will save their asses.
  - raz32dust 11y ago
    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 in being and maintaining their status as multi-billion dollar companies, I am not seeing how they can go much further in the long run.
    - madebylaw 11y ago
      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.
danieltillett 11y ago
If they actually manage to raise this amount of money then an amazing amount of capital is going to be destroyed over the next couple of years. Uber and Lyft going head to head to try and grab a monopoly is an extremely effective way for investors to lose a truck load of money.
- OmarIsmail 11y ago
  "Destroyed" is an unfortunate term to use. The drivers and riders will benefit who are predominantly not rich, so its actually a kind of stimulus.
  - codyb 11y ago
    Maybe not rich but a lot of the lower income people in my neighborhood in Brooklyn aren't using Uber or Lyft regardless of how cheap because they don't have much money period. You have to have a phone and internet access for these services so it's definitely not hitting the lowest brackets.
    - danieltillett 11y ago
      Yes the Uber/Lyft for poor people is called a bus. Hence why the bus network is so bad in so many location :(
    - mrcrassic 11y ago
      Do you have data to support this? I too live in Brooklyn and have found the opposite to be true.
      - jakeva 11y ago
        Brooklyn is a big place, and the person you're replying to did just say his neighborhood… probably little data available on any scale let alone the scale of one's neighborhood, aside from anecdotal.
  - danieltillett 11y ago
mdc2161 11y ago
Well I guess that could explain the 50% off rides promo they've been running in NYC for the past 6 weeks. Seems like every Sunday I get a push notification that it is extended.
- HappyTypist 11y ago
  Lyft is running cash-burning (not merely unsustainable) promotions in a select number of cities, most likely to try and impress prospective investors that "We have 40% marketshare in NYC!". Pretty meaningless when that's the result of a 50% off. Meanwhile Uber has been cutting back on promotions and incentives.
- cballard 11y ago
  I wish Apple would actually ban APNS spammers. Yelp does it too ("Yelp Weekly" or something).
  - tim333 11y ago
    Settings -> Notifications -> off?
    - cballard 11y ago
      No, that's not an acceptable solution. Spammers should be banned. But I actually wasn't strong enough: https://developer.apple.com/app-store/review/guidelines/#push-notifications https://developer.apple.com/app-store/review/guidelines/#pus... By section 5.6, Lyft should be removed from the App Store. I wish they'd do it!
tbrock 11y ago
As an adult I don't want to get into a car with a huge pink mustache on it. Get over myself? Sure, but the brand is terrible.
- lucasmullens 11y ago
  They've backed away heavily from the mustache.
  - deelowe 11y ago
    Its a magnet now, but there's still a mustache on the car and it still looks stupid as hell.

69 points by adoming3 11y ago

danso 11y ago

How big is the gap between Lyft and Uber in India and China and other large Asian markets? In China, is there a state-favored rival [1] that could just shut out both? From an American perspective, it's hard to imagine Lyft overcoming Uber's lead...but maybe it's a sensible investment if Lyft has a strong chance of being bought by an Asian company? [1] edit: Found this Fortune article, which describes Didi-Kuaidi as the "Uber of China" with 1 million drivers versus Uber's 100,000 drivers. Also, Didi is an investor in Lyft: http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/ http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/

eva1984 11y ago
Lyft is like non-exist in China. Uber is currently second to Didi with about one third of its market share.
- deleted 11y ago
  [deleted]
mayukh 11y ago
http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-partner-in-global-tech-service-alliance-to-rival-uber/#.yci6ue0:F7fa http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-... It's all one big fu to uber
- Apocryphon 11y ago
  Perhaps they should name this alliance G.O.L.D.
yueq 11y ago
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+%.
- tim333 11y ago
  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.
  - yueq 11y ago
    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.
- xiaoma 11y ago
  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-1-2b-more-in-china-led-by-baidu-as-rival-didi-kuaidi-gets-3b/ http://techcrunch.com/2015/09/07/uber-confirms-its-raised-1-...
  - yueq 11y ago
    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.

tswartz 11y ago

>Amid reports of Lyft’s financial struggles in its recently leaked financials, it’s obvious why the company seeks to raise so much money — the on-demand transportation market is a tough place to operate, especially with competition like Uber. According to Bloomberg, the ridesharing startup took a net loss of $127 million in the first half of this year while bringing in less than $47 million in revenue. Does anybody know how this loss compares to Uber? I don't recall any of their financials being leaked recently.

rtpg 11y ago
I don't remember the details, but I think Uber showed a similar revenue/loss ratio... There was HN discussion about it and the main thing people were saying is there's an opportunity cost in not spending the money (mainly in expansion). I kind of feel like Uber is in a bit of a "monopoly or bust" position though, using similar 4X techniques to our former favorite tech boogieman (subsidizing driver rates then removing subsidies once growth stops...). Not quite sure what Lyft is using its money for, though. My impression is there strategy is to not be jerks and focus on US only for now. Guess this is a "good guys lose" situation...
argonaut 11y ago
Uber loses at least $470M / year, if not more (unsure if the number is per quarter, half-year, or full year) [1]. Lyft's struggles have nothing to do with their losses, and all to do with the fact that they're losing the market to Uber. [1] http://www.businessinsider.com/uber-reportedly-operating-at-a-470-million-loss-2015-6 http://www.businessinsider.com/uber-reportedly-operating-at-...
- HappyTypist 11y ago
  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.
  - 11y ago

msoad 11y ago

Taxi fare is something everyone wants to save on. Once Uber and Lyft start making big margin on their service other low key and smaller companies can compete with them. Pretty much like airfare. Price is the king and low cost companies are doing a lot of business. I'm not sure how this Uber/Lyft story will end but I'm pretty sure it's not going to end like Facebook or Google.

brianwawok 11y ago
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.
- jacquesm 11y ago
  Too early. They'll run out of cash long before 'robot taxis' will save their asses.
- raz32dust 11y ago
  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 in being and maintaining their status as multi-billion dollar companies, I am not seeing how they can go much further in the long run.
  - madebylaw 11y ago
    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.

danieltillett 11y ago

If they actually manage to raise this amount of money then an amazing amount of capital is going to be destroyed over the next couple of years. Uber and Lyft going head to head to try and grab a monopoly is an extremely effective way for investors to lose a truck load of money.

OmarIsmail 11y ago
"Destroyed" is an unfortunate term to use. The drivers and riders will benefit who are predominantly not rich, so its actually a kind of stimulus.
- codyb 11y ago
  Maybe not rich but a lot of the lower income people in my neighborhood in Brooklyn aren't using Uber or Lyft regardless of how cheap because they don't have much money period. You have to have a phone and internet access for these services so it's definitely not hitting the lowest brackets.
  - danieltillett 11y ago
    Yes the Uber/Lyft for poor people is called a bus. Hence why the bus network is so bad in so many location :(
  - mrcrassic 11y ago
    Do you have data to support this? I too live in Brooklyn and have found the opposite to be true.
    - jakeva 11y ago
      Brooklyn is a big place, and the person you're replying to did just say his neighborhood… probably little data available on any scale let alone the scale of one's neighborhood, aside from anecdotal.
- danieltillett 11y ago

mdc2161 11y ago

Well I guess that could explain the 50% off rides promo they've been running in NYC for the past 6 weeks. Seems like every Sunday I get a push notification that it is extended.

HappyTypist 11y ago
Lyft is running cash-burning (not merely unsustainable) promotions in a select number of cities, most likely to try and impress prospective investors that "We have 40% marketshare in NYC!". Pretty meaningless when that's the result of a 50% off. Meanwhile Uber has been cutting back on promotions and incentives.
cballard 11y ago
I wish Apple would actually ban APNS spammers. Yelp does it too ("Yelp Weekly" or something).
- tim333 11y ago
  Settings -> Notifications -> off?
  - cballard 11y ago
    No, that's not an acceptable solution. Spammers should be banned. But I actually wasn't strong enough: https://developer.apple.com/app-store/review/guidelines/#push-notifications https://developer.apple.com/app-store/review/guidelines/#pus... By section 5.6, Lyft should be removed from the App Store. I wish they'd do it!

tbrock 11y ago

As an adult I don't want to get into a car with a huge pink mustache on it. Get over myself? Sure, but the brand is terrible.

lucasmullens 11y ago
They've backed away heavily from the mustache.
- deelowe 11y ago
  Its a magnet now, but there's still a mustache on the car and it still looks stupid as hell.