35 ms·

Lyft Is Said to Seek New Funding as Its Rival Uber Stumbles

323 points by uladzislau 10y ago

techsupporter 10y ago
Forgive me if this is me being dense, but from an outsider's perspective I don't understand what makes Lyft any better than Uber. Neither company properly categorizes their drivers (as employees), both have a rather sizeable cut from fares, both depended on being basically illegal cabs--except for Uber Black, which uses licensed black car services--to get started, and neither has a financially viable business model. Why is either business the cat's meow?
- late2part 10y ago
  Because the industry (TAM) is very large and they generate a tremendous amount of revenue. Because their platform is considered very scalable and once they get it figured out they could operate at much lower margins and make more profit. The problem is they're not profitable today.
- Kalium 10y ago
  In a lot of places, Uber/Lyft is a significantly better experience. The cars show up when you call them - reliably and quickly. The drivers don't long-haul you to rip you off. They go places taxis won't to pick you up. They're generally cheaper and cleaner. Ten years ago, taxis were terrible. Even in San Francisco. Now there's Uber and Lyft.
  - prawn 10y ago
    The question wasn't really why are they better than taxis, but why is Lyft considered a more ethical business than Uber, which has faced criticism, especially recently.
    - mikeyouse 10y ago
      Admittedly one of the first reasons I preferred Uber to taxis was that I didn't have to deal with tipping but Lyft does at least offer the option whereas Uber drivers are left with whatever scraps the company decides to throw them that week.
      - smileysteve 10y ago
        Uber's official tipping policy changed last year to suggest that drivers can ask for tips, have tip jars, and HBR suggests trade tips for reviews. https://hbr.org/2016/05/ubers-new-tipping-policy-is-a-mistake https://hbr.org/2016/05/ubers-new-tipping-policy-is-a-mistak... An uber driver even offered square for tip.
    - techsupporter 10y ago
      That's what I was getting at, thank you. I understand that taxis are regarded as horrible but I don't get why Lyft is seen as "the better way" (either by investors or customers) when Uber is increasingly reviled. Lyft has the same systemic flaws as Uber but does so behind a pink mustache and a CEO that seems a bit more restrained. Neither company took the opportunity to "fix" a broken taxi system by ensuring that both drivers and passengers get a better deal. If anything, it looks like Uber and Lyft looked at the taxi industry and said "hey, if we made that into an app, we can make bank for ourselves while incrementally shafting the very people we need for our service!" and proceeded to do so and Lyft does so in a more camouflaged way.
      - cgag 10y ago
        Seems likely to me that many of the 100k+ Lyft/Uber drivers are better off than they were before Lyft and Uber.
      - bendoernberg 10y ago
        Setting aside the merits of Lyft, everyone is watching to see what consequences Uber experiences as a result of their chronic antisocial behavior. If people continue to use Uber and their business succeeds, it sends a message to other companies that treating workers humanely is optional and unnecessary. Even if Lyft is substantively identical, there is still signaling value in punishing Uber and helps establish norms. Weak, but better than nothing.
      - Fomite 10y ago
        "...and a CEO that seems a bit more restrained." When distinguishing between two effectively identical products, something like "The CEO seems less of an asshole" is a perfectly reasonable means of differentiating.
      - jschwartzi 10y ago
        I would rather not give money to a company which pays Mike #2's salary.
    - ironchef 10y ago
      I know one nice thing was last I knew they were like ... half female executives. So they would appear to be doing better on diversity issues than most of the valley. Anecdata I know...
- Vadoff 10y ago
  It's not any better, but it's also worth less than 1/10th the valuation of the other, meaning it could be undervalued in comparison.
- WaxProlix 10y ago
  Lyft differentiates itself by throwing slightly more scraps to the drivers and not being Uber. It's shit, but cabbies aren't exactly working with a full benefits package and stock options either. I agree that Lyft is only marginally better than Uber, but it's hard to know where to go when basically every service industry seems to exist to exploit workers for profit. Do you just walk everywhere? Go live in the woods? It's a shit deal but we live in this system - worrying about 'ethical' consumption choices rather than trying to untangle root causes can feel like missing the point. Not that there's much chance of meaningful change there, either. Idunno.
  - techsupporter 10y ago
    > it's hard to know where to go when basically every service industry seems to exist to exploit workers for profit No argument there. I completely agree (with the caveat that some small niches or niche companies seem to be "playing fair" but they're, by far, the exception than he rule). > Do you just walk everywhere? Go live in the woods? I intentionally didn't mention it, but since you asked: I don't use either service because of my objections to them. Where I live, public transit and bicycle infrastructure is pretty good--at least compared to most of North America--so if I can't get there by train, bus, bike, rented or friend's car (when going as a group), or my own two feet, I just don't go. I 197% recognize that this is a choice that many people don't get to make, but I don't think it invalidates the question of "why is Lyft seen as so much better than Uber?"
    - WaxProlix 10y ago
      Sure - I take a bus to work and back, light rail around town, bike when weather permits, walk and eat/drink/shop local. I still take a Lyft when I go out and get drunk or whatever - not a real alternative out there.
- envy2 10y ago
  It's not—and anyone who says that it is is deluding themselves. I think we've reached the point where ridesharing apps are 100% a commodity: there's no real product differentiation, so I'll choose based on price and how long it'll take the car to arrive. Lyft drivers seem 'happier,' but that hasn't translated into anything significantly different for me in terms of ride quality. This won't be a popular opinion, but I think most drivers—on both services—are too entitled and have unrealistic expectations. Having a driver's license and a car is not rare in the US: it's a job that requires less specialized training/skill than being a fry cook at McDonald's, and should be compensated accordingly. The drivers who are happy are the ones who recognize this and do it to make some extra cash in their spare time after a 'real' job; the ones who are upset are trying to make their living driving. While I sympathize with the latter breed, they're in a dying occupation that's about to be automated out of existence within the next ~5 years.
  - hackernewsacct 10y ago
    There are some flaws in your assumptions. You assume everyone that drives has the same license and that driving requires little skill. Some speciality driving requires skills. These drivers have to have Class A CDL licenses and have to pass training. I highly doubt automated vechiles will obselete every driving job that requires a CDL license in the next 5 years. Eventually? Quite possibly. But in 5 years? Most likely no. I'm not claiming every Uber / Lyft driver has a CDL license (most probably don't). But to claim driving requires no special skill is false. There are certain situations that require very specialized driving skills.
    - envy2 10y ago
      I'd be shocked if any significant number of UberX and Lyft drivers had a CDL. Even in NYC, where a TLC license and commercial insurance is required, drivers still don't need a CDL. Some driving definitely requires specialized skills, but driving a Prius around SF or $random_american_city isn't it. Autonomous vehicles have gotten quite good, and I can easily see them filling the taxi/Uber use case by 2022.
      - 10y ago
- FullMtlAlcoholc 10y ago
  I don't know what Lyft's corporate culture is like, but I'd rather not support a company whose attitude towards women is like Sterling Cooper Draper Price or where corporate advancement is a Game of Thrones, lest other firms see this as a model to emulate and these behaviors proliferate. I don't want to work in a corporate culture that resembles a preppy/bro boys club that thinks darwinism is a theory you can apply socially Also, Lyft gives me the option of tipping the driver with my card, which I generally do if the driver provides something more than just transportation from point A to B. Some drivers have told me and a first date a series of jokes, thus being a great icebreaker. Others have helped me carry my drunk friend to the door. I don't like to carry cash and I find Uber's policy to be a commodification of an essentially human experience and almost dehumanizing. A lot of times, I don't tip and I don't feel a whit of guilt about it.
- verandaguy 10y ago
  I think it boils down to PR and ethics at this point. From a consumer's point of view, both services offer a convenience layer over taxis: you have an online account that hooks into your credit card, which means you can just summon a car using your magic pocket computer, step inside, talk to the (generally friendlier-and-more-sociable-than-a-cab-driver) driver, and get out at your destination without having to guide the driver around the city, or having to take your wallet out of your pocket. That they're priced similarly (and frequently lower) than regular cabs means both of these apps are in demand, period. The convenience layer makes them competitive against cabs even at equal fares. If Lyft and Uber are essentially identical (which is arguable), then putting their company culture and PR under scrutiny is fair game and the natural direction consumers will go in.
- smileysteve 10y ago
  The key points are - CEO never blackmailed journalists - No major revelations of sexual harassment - ~~No major revelations of political support~~ Related to core business - Surge Limit has prevented complaints about emergency pricing vs Uber. - Lyft takes a lower commission capped at 20%/25% - Lyft has in app digital tipping (drivers keep 100% of tips). Uber's tip policy encourages cash, which is an often cited complaint of taxis. - Major investment / partnership with GM (mentioned in an Uber thread that Car Makers will need a cheap / reasonably priced app)
  - jbw976 10y ago
    the in app tipping that lyft provides is what seals the deal for me. the drivers are performing a service for me and having an integrated way to enhance their compensation is really nice. a lot of the drivers have a hard time making a good living especially considering vehicle related costs are all on their shoulders. I'm happy to have a 1-click way to give them a bit extra. I've never understood why uber doesn't let you tip from within the app. it further solidifies the perception that uber doesn't care about its drivers. they can't wait to replace all their human drivers with a self driving fleet. can the same be said about lyft? maybe. but at least the humans are being compensated better by lyft right now.
    - mdorazio 10y ago
      Counterpoint: one of the reasons I prefer Uber is that it doesn't allow or encourage in-app tipping. Tipping sucks, is economically dysfunctional, and socially awkward. If the drivers aren't making enough from base fares then the fares need to go up - it's not my job to be a charity.
      - kemayo 10y ago
        I completely agree, and was halfway through writing a similar comment when I saw your post. I actively make choices for things like transit and food which reduce how much I have to think about tipping. I don't like having to judge someone's service, and decide how much it's appropriate to tip them based on some unwritten societal rule. The signal that hiding tips away sends is "the service provider is being compensated already", and if you want to make an extra effort to pay them more you can, but it's not required of you. I'm absolutely in favor of Uber/Lift charging whatever is necessary to pay their drivers properly. Similarly, I love no-tip restaurants which pay their servers and kitchen staff living wages.
- deleted 10y ago
  [deleted]
- tn13 10y ago
  Lyft has chosen a pink mustache as their symbol. Being number 2 they have sympathy of the leftist hippies as they dont like anyone succeeding.
- prostoalex 10y ago
  > from an outsider's perspective I don't understan I don't either, but it's related to the outsider status. Questions I'd be asking would revolve around unit economics - average gross and net revenues off a ride, average rides per driver per month, average rides per user per month, average driver retention and churn, average user retention and churn, all of the above in historic context broken down per market. Presumably sophisicated investors at this stage are asking for such numbers and base their valuations on cashflow. It's not a pure software business with winner-take-all mentality, Lyft is a Lowe's to Uber's Home Depot.
- prostoalex 10y ago
  > from an outsider's perspective I don't understan I don't either, but it's related to the outsider status. Questions I'd be asking would revolve around unit economics - average gross and net revenues off a ride, average rides per driver per month, average rides per user per month, average driver retention and churn, average user retention and churn, all of the above in historic context broken down per market. Presumably sophisicated investors at this stage are asking for such numbers and base their valuations on cashflow. It's not a pure software business with winner-take-all mentality, Lyft is a Lowe's to Uber's Home Depot.
- dawnerd 10y ago
  I feel Uber does a (slightly) better job vetting their drivers. I've had a few very questionable rides with Lyft. Most drivers are great but I've had more bad drivers on lyft.
  - Fomite 10y ago
    I've had more poor, "I'm in a taxi cab in all but name" drives on Uber.
    - fernandotakai 10y ago
      feels like it's city based. i definitely had bad rides on uber in nyc but only had great ones in sf. in my own town, uber is light-years ahead of taxi drivers. to the point where my parents are using uber (and they are really averse to technology)
      - Fomite 10y ago
        Yeah - I didn't mention it, but the variable that seems to drive the majority of the variability for me is "Where am I?"
    - erroneousfunk 10y ago
      I used to have those a lot, but I think Uber's eliminated a lot of the "off duty taxi drivers" in the last couple years. I used to get picked up by literal taxi cabs when I called for an Uber pretty frequently. Now, "marked, taxi, or salvage vehicles" are not allowed.
- pbreit 10y ago
  You have a few faulty assumptions: the contractor classification is reasonable, many disagree it is or should be illegal, business model is money-printing machine. They are somewhat interchangeable but have quite different brandings.
- JumpCrisscross 10y ago
  > Why is either business the cat's meow? I have, for years, commented on Uber's savvy relative to Airbnb [1]. This was partly due to Uber's retention of Obama's campaign manager, David Plouffe [2]. Unfortunately, he left for the Chan Zuckerberg Initiative in January [3]. Uber's problems are, 80%, a PR scandal. #DeleteUber started when Uber seemed to interfere with a taxi strike at New York City's JFK airport [4]. Uber cancelled its surcharge at 7:36PM; the taxi union scheduled the strike, at 4:55PM, for between 6 and 7PM [5]. Biggest winner? Peter Thiel--numpties jumped to Lyft. Almost everyone else rallied against his competitor. [1] https://news.ycombinator.com/item?id=6521376#6521700 https://news.ycombinator.com/item?id=6521376#6521700 [2] https://en.wikipedia.org/wiki/David_Plouffe https://en.wikipedia.org/wiki/David_Plouffe [3] http://www.cnbc.com/2017/01/10/ubers-david-plouffe-to-join-chan-zuckerberg.html http://www.cnbc.com/2017/01/10/ubers-david-plouffe-to-join-c... [4] http://www.businessinsider.com/delete-uber-hashtag-jfk-airport-taxi-strikes-2017-1 http://www.businessinsider.com/delete-uber-hashtag-jfk-airpo... [5] https://www.axios.com/uber-didnt-deserve-deleteuber-2225893201.html https://www.axios.com/uber-didnt-deserve-deleteuber-22258932...
- justinzollars 10y ago
  I use Lyft because I am able to tip the driver. Also if you ask the drivers which platform they prefer typically they say Lyft treats them better. That is my reason.
- hueving 10y ago
  Many people have no problem with the contractor model or disrupting the ridiculous cab system. However, systemic sexual harassment and a generally abusive CEO is not something most people want to support.
  - jimmywanger 10y ago
    > However, systemic sexual harassment That has yet to be proven with any sort of evidence other than an uncorroborated blog post or two.
- cwp 10y ago
  I don't feel Lyft is some paragon of virtue. AFAICT they're a regular Silicon Valley tech company with all of the usual tensions associated with that. The service they provide is a huge improvement on what came before, but there are privacy concerns related to the data they collect and use for business purposes. They'll probably push the envelope a bit on what they can do with that information, and then back down whenever there's significant pushback. Uber, on the other hand, is a cesspool. It's run by sociopaths who think business success confers moral authority, and are quite annoyed with all the hullaballoo about "right" and "wrong" that their actions periodically provoke. I have no problem with their business model, but I will not use Uber. I don't trust them with my credit card, and I don't want them tracking my movements.
- digitalzombie 10y ago
  Uh.... Uber vetting is weak compare to Lyft. They're both may not be super stringent but I've seen Uber vetting process and Lyft. Lyft was felt much better compare to Uber.
- imh 10y ago
  On iphone, uber's app now requires you to give it permission to see your location always, regardless of whether the app is open. With lyft, the app only needs my location while it is open. That's a huge one in my book. The day uber updated and said it had to track me 24/7 was the day I deleted it.
- Apocryphon 10y ago
  Tonight I've learned that Uber, on iOS, tracks the user's location even when the app is inactive, for at least ten minutes after a ride is over. Lyft only tracks location while a ride is in session. Would like someone to confirm this.
myblake 10y ago
While I think now is probably the time for lyft to strike while the iron is hot, I appreciate nytimes' candor in acknowledging neither Lyft nor Uber has demonstrated a "financially viable business". The road ahead is undoubtedly not easy for Lyft.
- a13n 10y ago
  > neither Lyft nor Uber has demonstrated a "financially viable business Self driving cars
  - semiquaver 10y ago
    > demonstrated
  - vkou 10y ago
    In the magical future where self-driving cars will be able to replace 100% of what a driver does 100% of the time, what barrier to entry will protect Uber from competition? What stops someone from leasing a few dozen vehicles, and opening up their NotUber self-driving taxi service?
    - chime 10y ago
      The client app, backend tech, and economies of scale.
    - j_koreth 10y ago
      Small barriers to entry - Cost of purchasing said vehicles Cost of developing a Uber=style app Even past this, the industry will never be highly profitable in the long run because of competition from people who do get past this
    - ryanSrich 10y ago
      Nothing will stop them, and the company to replace Uber won't own the cars. They'll simply make technology that empowers self-driving car owners to earn money with their car while they're sitting at work.
deleted 10y ago
[deleted]
m3kw9 10y ago
If that is the best shot Lyft has, it would seem futile
qq66 10y ago
I don't think this will work because I don't think modern megacorporations suffer consequences for poor ethics the way normal-sized local businesses did a hundred years ago. If the local tannery was run by a bad person, people would say "I don't do business with him" and he could lose 50% of his serviceable customers and employees. Today, the corporations are completely faceless, and the fact that there are actual people behind Uber the company is not readily apparent when using their app. People will just go for the cheapest ride and think only briefly about the scandal they read about last week.
- a13n 10y ago
  Except when #DeleteUber trends on Twitter... Sure it won't be 50% but I doubt the charts look pretty
  - ryanSrich 10y ago
    I'd wager the folks reading Twitter and random blogs on medium occupy a microscopic portion of Uber consumers. I would be very surprised if Uber saw any significant hit to their business because of the recent events
jwatte 10y ago
Also, the quality of Uber cars has declined, even within "black" and especially "SUV" classes. So, might as well save the money.
maxander 10y ago
Lyft and Uber, from a birds-eye view, do the exact same thing; and furthermore, neither is profitable, so the entire market is built upon potential future sales bases. Lyft is here valued at, generously, $7 billion. Meanwhile, Uber's valuation is reported variously, but a general Google search suggests its well in excess of $50 billion. This exceeds any expectation of market craziness. Are these investors talking to each other? Are things so far gone that a vague promise of self-driving cars is worth almost a factor of ten valuation difference?
- prostoalex 10y ago
  Early stage private valuations tend to be focused on future potential, usually expressed in total addressable market figures. Lyft was selling slow expansion (they're still a US-only operator, and even within the US operate in relatively few markets) and most likely positive cashflow. Uber was selling rapid global expansion, where each new city could be scaled up via Uber playbooks. Then it started selling itself as "last-mile logistics provider" for things like food deliveries and clothing. Then as a leading developer of self-driving vehicles, later complemented by self-driving trucks, later complemented by self-elevating passenger-carrying robotic drones. You have to give Uber credit, they do address a broader TAM, even if their underlying core business doesn't seem that different from Lyft or Gett or Wingz or Hailo or MyTaxi or Didi or GrabTaxi or Ola or Yandex.Taxi.
  - curiousDog 10y ago
    Oh wow, this is the first I'm hearing of it. Yandex, the search engine operates a Yandex.taxi? That's pretty interesting, all major Global search engines, Google, Yandex, Baidu have interests in developing self-driving cars as well.
    - prostoalex 10y ago
      https://yandex.com/company/press_center/press_releases/2011/2011-10-26/ https://yandex.com/company/press_center/press_releases/2011/... https://www.engadget.com/2016/08/28/yandex-teams-on-self-driving-shuttle-bus/ https://www.engadget.com/2016/08/28/yandex-teams-on-self-dri...
alphonsegaston 10y ago
Anybody who's got a small but viable alternative to Uber could really benefit by pivoting to an "ethics first" model right now. Between Kalanick and Thiel, the market seems ripe for disruption.
- dwg 10y ago
  Can you give an example of large companies which operate on a "ethics first" model?
  - omarchowdhury 10y ago
    They certainly imply they do in their marketing message.
  - throwaway2048 10y ago
    costco and mars incorporated both have long histories of ethical, sustainable practices, and a strong reputation for resisting the quality lowering death spirals that infect many consumer goods focused companies.
    - dwg 10y ago
      Costco is probably the best example that comes to mind for me to, considering the scale at which they operate and the fact that they are actually widely reputed for their ethical practices. Nonetheless I think they are an exception and, while not impossible, it would be pretty difficult to disrupt the disruptor with a business model based on being more ethical.
      - ftlio 10y ago
        Costco's profits are less their subscription revenue. That tells me the space for bulk retailers in middle class areas with the type of consumers that can shell out a yearly subscription fee isn't a whole lot bigger than Costco already occupies. Costco shoppers have more money, so they can buy more economically at Costco quantities, and they have a higher expectation of service which requires a higher paid employee. Costco has effectively packaged that arrangement in a $50 fee and keeps prices competitive by selling mostly bulk quantities compared to grocery stores. Good luck trying to compete at scale while holding on to costly values that your competitors don't. Your choices are fail entirely or carve out a niche that you can keep almost exclusively. In my mind, the mental ceiling keeping us from understanding 'Why more companies can't be like Costco' and 'What's the real value of an Uber ride sans venture capital subsidies' is a lack of understanding of the extensive properties of capital that automation is going to either push us through or bring down on us in a rain of deadly glass shards. I'm not going to wait around for the market to 'get real' and 'focus on companies with actual viable business models' though. 1) The bulk of your portfolio should already be occupied by companies that fit that mold, but 2) The practice of leveraging profitability today for gains in equity tomorrow is going to push through a few big winners consistently enough that it's not going away regardless of the overall consequences. Meanwhile we'll keep asking the same questions that ultimately amount to 'Why does capital beget capital?'
simplehuman 10y ago
Let's say I have to take a cab everyday to work. If Uber gives me a ride for 15 bucks and Lyft gives me the same ride for 18 bucks, I know which one I will choose. Do you?
- teach 10y ago
  It's easy for me to say, but I won't ride in an Uber vehicle. I've disagreed with their practices for quite some time, and these more recent events have only solidified my resolve. I'm sure I'm the tiny minority, but $3 a day is a pittance vs knowing I'm supporting such a toxic culture. Plus, if you can't afford an "extra" $3 a day to get to work, then use neither Uber nor Lyft and get on a bus.
  - simplehuman 10y ago
    My understanding is that Uber was never popular in cities with good public transport... As for 3$ a day, this is the choice people make everyday with using free Google stuff and promoting ads and surveillance culture. It's really not that simple as money as you make it sound.
- bbcbasic 10y ago
  Hypothetically, for $3 difference? Probably the quicker/more reliable service. I'd probably look into car pooling as well. In reality neither, would find some other way (cycle / public transport / lift with friend / cab / own car)
aliceyhg 10y ago
I had the opportunity to speak with an Uber driver today who spoke with a gentle voice and was very pleasant. She didn't speak much and when she did, she was very agreeable. However, when the Uber topic came up, she was very vocal about how unhappy she was driving with Uber (She did not know about the recent Uber drama going on because she was so busy driving all the time). She complained about Uber's frequently changing driver bonuses. Right when she figures out a routine that fits her schedules, Uber sweeps out the rug from under her and changes the payment structure. Example: Previously you complete 125 rides / week and you will get a $500 bonus. This a significant number for her. Now, Uber split it up so you have to do 75 rides by Thursday to earn $250. Then do 65 rides on fri/sat/sun to earn the remainder $250. This is incredibly frustrating for her because on weekends she usually gets long rides (SF to San Jose). This immediately takes an hour off her day (for one ride) and she would have to work extra to meet her target. Obviously, I asked her why she doesn't drive for Lyft. She used to, and Lyft did many things right. She loved it. However, Lyft decided to take away Lyft power driver bonus (similar to Uber's bonus) and that made a significant dent in her earning potential. She had to switch and drive for Uber to make ends meet. I'd imagine many Lyft drivers had a similar reaction, which is why I still find much more drivers on Uber than on Lyft despite the all the negative publicity. Here are some things that I think Lyft can improve on their business strategy: 1. Be willing to do what it takes to succeed. Uber has repeatedly shown their agility and versatility to adapt to changes around them. When they realized that Uber Black was not what the public wanted, they introduced UberX (which screwed over alot of their existing drivers) and lowered fares. It was harsh and unfair, but it had to be done. If I was running Lyft and was low on cash and could not afford to continue driver bonuses, I would have laid off a chunk of the engineering team / staff to raise capital to retain the drivers from switching. 2. With all these #deleteUber hashtags, why haven't I heard any of my friends promoting Lyft? Now should be the perfect time to splurge on marketing and capture all the disgruntled uber drivers and passengers. Wait a month, most of the fire would have died. As much as I love Lyft and the experience I have riding with Lyft, I prefer giving that up for a cheaper service. Most people I know would prefer to save money. I hope Lyft figures out an aggressive business strategy and become a viable Uber competitor.
songzme 10y ago
Anyone tried carpooling services like Waze pool? As an employee at google, I decided to give Waze pool a try. I live in San Jose and usually ride the google shuttle to work. During traffic, it takes about 1 hour to 1.5 hours (keep in mind Google shuttle has multiple stops). After using Waze Rider a few times, it has now become my main mode of transportation to work and back. It cost $5 (and possibly less) and you get to sit in a car and talk about life, share your interests, problems, with another human being. So far I have completed about 26 rides and the socializing aspect outside of my social circle makes my commute much more exciting. Since drives can't make a living off the money from Waze carpool, the drivers I tend to meet are those who doesn't really need the money and simply doing it to meet new people. They all have different backgrounds going to work (or home). I've met a nanny, tax accountant, an aspiring policeman going to the academy, VP of a company, and software engineers. Yesterday, I waze carpooled with a product manager and a startup who picked me up in his Tesla. It was the first time I've ridden in a Tesla.
- booi 10y ago
  Looks like we found the Google employee
  - humanrebar 10y ago
    > As an employee at google It was disclaimed. Let's not be snarky.
cpprototypes 10y ago
I often wonder what is the natural market price of these services? Basically, without massive VC money distorting everything, how much would a Lyft or Uber ride really cost? I have a feeling it would be much higher than now. Despite all the hype, true level 5 self driving is decades away. When the VC money stops, what are these companies going to do? I think the only viable option for them is Lyft Line/Uber Pool. It benefits from network effects (more using the service, better it gets) which also prevents newcomers. It could become a monopoly like Facebook. They should be pushing this harder than unrealistic dreams of level 5 self driving.
- Gibbon1 10y ago
  I saw one economist trying to figure out what the appropriate fare for BART should be. Ans: Free. One place I worked in the early 2000's gave us checks were could redeem for transit. https://commuterbenefits.511.org/docs/faq.pdf https://commuterbenefits.511.org/docs/faq.pdf One thought might be to have a subsidized ride share system where employers/transit authority pays people to ride share. Impression that based on transit authorities reaction to causal car pooling is they wouldn't support it. AKA they don't want people carpooling they want them to ride busses. Second thought of mine based on buses in San Francisco is the buses are too large and too few. More smaller buses would increase ridership and reduce trip times.
  - kingnothing 10y ago
    You can already pay for Uber rides with commuter benefit cards. https://newsroom.uber.com/poolcommutes/ https://newsroom.uber.com/poolcommutes/
    - Gibbon1 10y ago
      My thought might be interesting if car poolers could tap into the commuter benefit cards. AKA pick up someone on the way to work and they can transfer 25-50 cents a mile into your account.
foxfired 10y ago
Here is how I see it. I rely on those rides to go to work every single day and here what it (would) costs me. Uber: $250 a month.(Majority) Lyft: $500 a month (Whenever Uber is too expensive) Bus : $100 a month (1h:15 for 6 miles and 3 buses... No) Politics and all internal conflicts aside, there is a need for these services whether we like it or not. When I need to make a decision in the morning I take whatever is the least expensive and more convenient. I don't want to spend hours on the bus and I do not want a good chunk of my paycheck to go to simply getting to work. Speaking with drivers everyday, I understand their frustration of driving all around town only for very small profit. Just today, I took a ride with a driver that seemed very frustrated. I didn't want to intrude but he ended up tell me how much he hates UberPool (that's what I use). 70 cents per mile, and when a second rider joins the rate goes down, and for the next even lower. We were 3 different riders. In the riders perspective, we want the cheapest and most reliable. Sure I want to support those who work for a company that respect them but at the end of the day it is not a charity. What is the answer in the consumer's perspective? Edit: Formatting
- yunti 10y ago
  The answer is that, you are using a service that is unsustainably too cheap. In the longer term the price will have to increase, probably quite significantly and you'll have to choose whether you think it's still worth it or take the bus. Unfortunately you, and many others are the ones benefitting from drivers being underpaid.
  - kagamine 10y ago
    It's almost like Uberpool could be a privately run bus service using larger vehicles and transporting more people at once, instead of private taxis. Depending on the angle you view it from, perhaps the Uberpool service isn't too cheap, but simply a bad idea from the start, without the infrastructure or a suitable class of vehicle to make it viable.
    - jordigh 10y ago
      So... privatised public transportation? Maybe that's what it'll take for the US to improve its public transportation. Having good ol' fashioned private enterprise instead of the government paying for it.
pfarnsworth 10y ago
Lyft couldn't sell themselves for $5B and now they're looking for funding at $6B. I'm curious as to who would be dumb enough to invest in Lyft after a scenario like that.
- curiousDog 10y ago
  The same ones who were dumb enough to invest in Uber I guess.
eddieplan9 10y ago
According to leaked financial in [1], Lyft is expected to generate $32M of net revenue on about $158M of fare, while losing $50M per month. If everything stays the same, Lyft would have to raise rate by 156% to break even. Also, Lyft's growth is mostly purchased: > While rides increased about 11 percent from April to May, fully paid rides, without the use of a coupon or a credit, grew by only 5 percent in that period. They recently launched in 50+ cities simultaneously, which means they will bleed cash faster in hope of generating some growth number. In comparison, according to [2], in Q3 of 2016, Uber collected 5.5B of fare, and after paying drivers, had a net revenue of 1.7B (30%) and a loss of 800M. If everything stays the same, Uber could break even by raising rate by 47%. If you consider that most of the loss is from developing markets, it's actually not that hard for Uber to break even in the U.S. [1] https://mattermark.com/lyft-financials/ https://mattermark.com/lyft-financials/ [2] https://www.bloomberg.com/news/articles/2016-12-20/uber-s-loss-exceeds-800-million-in-third-quarter-on-1-7-billion-in-net-revenue https://www.bloomberg.com/news/articles/2016-12-20/uber-s-lo... Edits: grammar
- rtpg 10y ago
  Uber was in a similar situation to Lyft not too long ago. Uber's also already said that they're cash-positive in the US, and Lyft is focused on the US for now. It's not hard to imagine that after this multi-city expansion, costs will go way down. I wouldn't qualify the growth as "mostly purchased" when it's... 50/50 couponed/full? That seems to be more a consequence of the multi-city launch than anything. I'm pretty optimistic of Lyft's chances here (politically motivated by Uber's attitude, granted). They're spending a lot of money to capture parts of a well-defined market (US carsharing), and have a PR edge with informed riders. Uber could theoretically start couponing to hell and back in the US again, but they're going to run out of money someday.
  - acchow 10y ago
    > I wouldn't qualify the growth as "mostly purchased" when it's... 50/50 couponed/full If most of their customers are buying only because they are selling under the market price, then it doesn't matter if the subsidy is 5% or 50% or 100%; their sales are "mostly purchased". Imagine you open a store tomorrow and sell gold for 1% under the market price - suddenly your sales blow up to $1 billion in a day. You have purchased all of your sales, with just a 1% coupon.
jonthepirate 10y ago
Hopefully us former employees see some liquidity before driverless wipes these companies out. The value of ride dispatching aggregators is in the driver network. Apps and cars are easy to make.
randyrand 10y ago
Do we have any reason to believe Lyft is actually more moral? And not just putting on a "we're moral" marketing stunt?
- jcl 10y ago
  I personally was convinced Lyft was more moral when Uber employees did things like booking Lyft rides for the purposes of recruiting away the drivers or making fake Lyft accounts to book and cancel thousands of rides. As far as I can tell, Lyft employed no similar tactics. http://money.cnn.com/2014/08/11/technology/uber-fake-ride-requests-lyft/ http://money.cnn.com/2014/08/11/technology/uber-fake-ride-re... http://www.businessinsider.com/ubers-operation-slog-against-lyft-2014-8 http://www.businessinsider.com/ubers-operation-slog-against-...
systematical 10y ago
I'm really surprised that Lyft and Uber are not profitable. As for which is better. Uber once charged my friend $80 for a 15 minute ride in Salt Lake City around midnight. There is a markup and a then there is bend over. They marked up a bend over on that one. I try my best not to use them. I also like the option of giving a tip.
- arjie 10y ago
  They tell you what the markup is ahead of time. The markup is a good thing. It's efficient pricing. Society is better for it. I find it comforting knowing that in an emergency I can get somewhere in an Uber. If pricing didn't rise with demand or dropping supply, I can't have that guarantee. In SF, I've never had the "no cars available". That's what I want. The knowledge that ubiquitous rapid transport is available for some price within my reach. Sure, if it cost £1000 for a ride that'd be different. But even on the 4.75 I've seen in SF it's never gone that high.
- tim333 10y ago
  On the other hand when I visited SF I did five rides on Lyft and got charged $0.79 in total which I thought very nice of them but not very profitable. They gave me one of their intro deals.
brogrammer2 10y ago
Wouldn't it be better, if half of that money could go into improving the public transport of cities or building new infrastructure that would ease up congestion on roads?
patrickaljord 10y ago
Outside of SV and HN crowd, I don't know of anyone who heard of the scandals here in Paris at least. They seem to be doing great (or at least similar than pre-scandals).
Apocryphon 10y ago
Anyone betting that GM will end up acquiring them?
losteverything 10y ago
I'm curious. Do you price check each time?? Is there an app that can determine which is cheapest? If the prices are about the same can you hail both and take the one that arrives first (& cancel)? (Getting from a to b is a commodity) Does the uber app detect that you have a competitor and can it be smart enough to price accordingly?

323 points by uladzislau 10y ago

Forgive me if this is me being dense, but from an outsider's perspective I don't understand what makes Lyft any better than Uber. Neither company properly categorizes their drivers (as employees), both have a rather sizeable cut from fares, both depended on being basically illegal cabs--except for Uber Black, which uses licensed black car services--to get started, and neither has a financially viable business model. Why is either business the cat's meow?

late2part 10y ago
Because the industry (TAM) is very large and they generate a tremendous amount of revenue. Because their platform is considered very scalable and once they get it figured out they could operate at much lower margins and make more profit. The problem is they're not profitable today.
Kalium 10y ago
In a lot of places, Uber/Lyft is a significantly better experience. The cars show up when you call them - reliably and quickly. The drivers don't long-haul you to rip you off. They go places taxis won't to pick you up. They're generally cheaper and cleaner. Ten years ago, taxis were terrible. Even in San Francisco. Now there's Uber and Lyft.
- prawn 10y ago
  The question wasn't really why are they better than taxis, but why is Lyft considered a more ethical business than Uber, which has faced criticism, especially recently.
  - mikeyouse 10y ago
    Admittedly one of the first reasons I preferred Uber to taxis was that I didn't have to deal with tipping but Lyft does at least offer the option whereas Uber drivers are left with whatever scraps the company decides to throw them that week.
    - smileysteve 10y ago
      Uber's official tipping policy changed last year to suggest that drivers can ask for tips, have tip jars, and HBR suggests trade tips for reviews. https://hbr.org/2016/05/ubers-new-tipping-policy-is-a-mistake https://hbr.org/2016/05/ubers-new-tipping-policy-is-a-mistak... An uber driver even offered square for tip.
  - techsupporter 10y ago
    That's what I was getting at, thank you. I understand that taxis are regarded as horrible but I don't get why Lyft is seen as "the better way" (either by investors or customers) when Uber is increasingly reviled. Lyft has the same systemic flaws as Uber but does so behind a pink mustache and a CEO that seems a bit more restrained. Neither company took the opportunity to "fix" a broken taxi system by ensuring that both drivers and passengers get a better deal. If anything, it looks like Uber and Lyft looked at the taxi industry and said "hey, if we made that into an app, we can make bank for ourselves while incrementally shafting the very people we need for our service!" and proceeded to do so and Lyft does so in a more camouflaged way.
    - cgag 10y ago
      Seems likely to me that many of the 100k+ Lyft/Uber drivers are better off than they were before Lyft and Uber.
    - bendoernberg 10y ago
      Setting aside the merits of Lyft, everyone is watching to see what consequences Uber experiences as a result of their chronic antisocial behavior. If people continue to use Uber and their business succeeds, it sends a message to other companies that treating workers humanely is optional and unnecessary. Even if Lyft is substantively identical, there is still signaling value in punishing Uber and helps establish norms. Weak, but better than nothing.
    - Fomite 10y ago
      "...and a CEO that seems a bit more restrained." When distinguishing between two effectively identical products, something like "The CEO seems less of an asshole" is a perfectly reasonable means of differentiating.
    - jschwartzi 10y ago
      I would rather not give money to a company which pays Mike #2's salary.
  - ironchef 10y ago
    I know one nice thing was last I knew they were like ... half female executives. So they would appear to be doing better on diversity issues than most of the valley. Anecdata I know...
Vadoff 10y ago
It's not any better, but it's also worth less than 1/10th the valuation of the other, meaning it could be undervalued in comparison.
WaxProlix 10y ago
Lyft differentiates itself by throwing slightly more scraps to the drivers and not being Uber. It's shit, but cabbies aren't exactly working with a full benefits package and stock options either. I agree that Lyft is only marginally better than Uber, but it's hard to know where to go when basically every service industry seems to exist to exploit workers for profit. Do you just walk everywhere? Go live in the woods? It's a shit deal but we live in this system - worrying about 'ethical' consumption choices rather than trying to untangle root causes can feel like missing the point. Not that there's much chance of meaningful change there, either. Idunno.
- techsupporter 10y ago
  > it's hard to know where to go when basically every service industry seems to exist to exploit workers for profit No argument there. I completely agree (with the caveat that some small niches or niche companies seem to be "playing fair" but they're, by far, the exception than he rule). > Do you just walk everywhere? Go live in the woods? I intentionally didn't mention it, but since you asked: I don't use either service because of my objections to them. Where I live, public transit and bicycle infrastructure is pretty good--at least compared to most of North America--so if I can't get there by train, bus, bike, rented or friend's car (when going as a group), or my own two feet, I just don't go. I 197% recognize that this is a choice that many people don't get to make, but I don't think it invalidates the question of "why is Lyft seen as so much better than Uber?"
  - WaxProlix 10y ago
    Sure - I take a bus to work and back, light rail around town, bike when weather permits, walk and eat/drink/shop local. I still take a Lyft when I go out and get drunk or whatever - not a real alternative out there.
envy2 10y ago
It's not—and anyone who says that it is is deluding themselves. I think we've reached the point where ridesharing apps are 100% a commodity: there's no real product differentiation, so I'll choose based on price and how long it'll take the car to arrive. Lyft drivers seem 'happier,' but that hasn't translated into anything significantly different for me in terms of ride quality. This won't be a popular opinion, but I think most drivers—on both services—are too entitled and have unrealistic expectations. Having a driver's license and a car is not rare in the US: it's a job that requires less specialized training/skill than being a fry cook at McDonald's, and should be compensated accordingly. The drivers who are happy are the ones who recognize this and do it to make some extra cash in their spare time after a 'real' job; the ones who are upset are trying to make their living driving. While I sympathize with the latter breed, they're in a dying occupation that's about to be automated out of existence within the next ~5 years.
- hackernewsacct 10y ago
  There are some flaws in your assumptions. You assume everyone that drives has the same license and that driving requires little skill. Some speciality driving requires skills. These drivers have to have Class A CDL licenses and have to pass training. I highly doubt automated vechiles will obselete every driving job that requires a CDL license in the next 5 years. Eventually? Quite possibly. But in 5 years? Most likely no. I'm not claiming every Uber / Lyft driver has a CDL license (most probably don't). But to claim driving requires no special skill is false. There are certain situations that require very specialized driving skills.
  - envy2 10y ago
    I'd be shocked if any significant number of UberX and Lyft drivers had a CDL. Even in NYC, where a TLC license and commercial insurance is required, drivers still don't need a CDL. Some driving definitely requires specialized skills, but driving a Prius around SF or $random_american_city isn't it. Autonomous vehicles have gotten quite good, and I can easily see them filling the taxi/Uber use case by 2022.
    - 10y ago
FullMtlAlcoholc 10y ago
I don't know what Lyft's corporate culture is like, but I'd rather not support a company whose attitude towards women is like Sterling Cooper Draper Price or where corporate advancement is a Game of Thrones, lest other firms see this as a model to emulate and these behaviors proliferate. I don't want to work in a corporate culture that resembles a preppy/bro boys club that thinks darwinism is a theory you can apply socially Also, Lyft gives me the option of tipping the driver with my card, which I generally do if the driver provides something more than just transportation from point A to B. Some drivers have told me and a first date a series of jokes, thus being a great icebreaker. Others have helped me carry my drunk friend to the door. I don't like to carry cash and I find Uber's policy to be a commodification of an essentially human experience and almost dehumanizing. A lot of times, I don't tip and I don't feel a whit of guilt about it.
verandaguy 10y ago
I think it boils down to PR and ethics at this point. From a consumer's point of view, both services offer a convenience layer over taxis: you have an online account that hooks into your credit card, which means you can just summon a car using your magic pocket computer, step inside, talk to the (generally friendlier-and-more-sociable-than-a-cab-driver) driver, and get out at your destination without having to guide the driver around the city, or having to take your wallet out of your pocket. That they're priced similarly (and frequently lower) than regular cabs means both of these apps are in demand, period. The convenience layer makes them competitive against cabs even at equal fares. If Lyft and Uber are essentially identical (which is arguable), then putting their company culture and PR under scrutiny is fair game and the natural direction consumers will go in.
smileysteve 10y ago
The key points are - CEO never blackmailed journalists - No major revelations of sexual harassment - ~~No major revelations of political support~~ Related to core business - Surge Limit has prevented complaints about emergency pricing vs Uber. - Lyft takes a lower commission capped at 20%/25% - Lyft has in app digital tipping (drivers keep 100% of tips). Uber's tip policy encourages cash, which is an often cited complaint of taxis. - Major investment / partnership with GM (mentioned in an Uber thread that Car Makers will need a cheap / reasonably priced app)
- jbw976 10y ago
  the in app tipping that lyft provides is what seals the deal for me. the drivers are performing a service for me and having an integrated way to enhance their compensation is really nice. a lot of the drivers have a hard time making a good living especially considering vehicle related costs are all on their shoulders. I'm happy to have a 1-click way to give them a bit extra. I've never understood why uber doesn't let you tip from within the app. it further solidifies the perception that uber doesn't care about its drivers. they can't wait to replace all their human drivers with a self driving fleet. can the same be said about lyft? maybe. but at least the humans are being compensated better by lyft right now.
  - mdorazio 10y ago
    Counterpoint: one of the reasons I prefer Uber is that it doesn't allow or encourage in-app tipping. Tipping sucks, is economically dysfunctional, and socially awkward. If the drivers aren't making enough from base fares then the fares need to go up - it's not my job to be a charity.
    - kemayo 10y ago
      I completely agree, and was halfway through writing a similar comment when I saw your post. I actively make choices for things like transit and food which reduce how much I have to think about tipping. I don't like having to judge someone's service, and decide how much it's appropriate to tip them based on some unwritten societal rule. The signal that hiding tips away sends is "the service provider is being compensated already", and if you want to make an extra effort to pay them more you can, but it's not required of you. I'm absolutely in favor of Uber/Lift charging whatever is necessary to pay their drivers properly. Similarly, I love no-tip restaurants which pay their servers and kitchen staff living wages.
deleted 10y ago
[deleted]
tn13 10y ago
Lyft has chosen a pink mustache as their symbol. Being number 2 they have sympathy of the leftist hippies as they dont like anyone succeeding.
prostoalex 10y ago
> from an outsider's perspective I don't understan I don't either, but it's related to the outsider status. Questions I'd be asking would revolve around unit economics - average gross and net revenues off a ride, average rides per driver per month, average rides per user per month, average driver retention and churn, average user retention and churn, all of the above in historic context broken down per market. Presumably sophisicated investors at this stage are asking for such numbers and base their valuations on cashflow. It's not a pure software business with winner-take-all mentality, Lyft is a Lowe's to Uber's Home Depot.
prostoalex 10y ago
> from an outsider's perspective I don't understan I don't either, but it's related to the outsider status. Questions I'd be asking would revolve around unit economics - average gross and net revenues off a ride, average rides per driver per month, average rides per user per month, average driver retention and churn, average user retention and churn, all of the above in historic context broken down per market. Presumably sophisicated investors at this stage are asking for such numbers and base their valuations on cashflow. It's not a pure software business with winner-take-all mentality, Lyft is a Lowe's to Uber's Home Depot.
dawnerd 10y ago
I feel Uber does a (slightly) better job vetting their drivers. I've had a few very questionable rides with Lyft. Most drivers are great but I've had more bad drivers on lyft.
- Fomite 10y ago
  I've had more poor, "I'm in a taxi cab in all but name" drives on Uber.
  - fernandotakai 10y ago
    feels like it's city based. i definitely had bad rides on uber in nyc but only had great ones in sf. in my own town, uber is light-years ahead of taxi drivers. to the point where my parents are using uber (and they are really averse to technology)
    - Fomite 10y ago
      Yeah - I didn't mention it, but the variable that seems to drive the majority of the variability for me is "Where am I?"
  - erroneousfunk 10y ago
    I used to have those a lot, but I think Uber's eliminated a lot of the "off duty taxi drivers" in the last couple years. I used to get picked up by literal taxi cabs when I called for an Uber pretty frequently. Now, "marked, taxi, or salvage vehicles" are not allowed.
pbreit 10y ago
You have a few faulty assumptions: the contractor classification is reasonable, many disagree it is or should be illegal, business model is money-printing machine. They are somewhat interchangeable but have quite different brandings.
JumpCrisscross 10y ago
> Why is either business the cat's meow? I have, for years, commented on Uber's savvy relative to Airbnb [1]. This was partly due to Uber's retention of Obama's campaign manager, David Plouffe [2]. Unfortunately, he left for the Chan Zuckerberg Initiative in January [3]. Uber's problems are, 80%, a PR scandal. #DeleteUber started when Uber seemed to interfere with a taxi strike at New York City's JFK airport [4]. Uber cancelled its surcharge at 7:36PM; the taxi union scheduled the strike, at 4:55PM, for between 6 and 7PM [5]. Biggest winner? Peter Thiel--numpties jumped to Lyft. Almost everyone else rallied against his competitor. [1] https://news.ycombinator.com/item?id=6521376#6521700 https://news.ycombinator.com/item?id=6521376#6521700 [2] https://en.wikipedia.org/wiki/David_Plouffe https://en.wikipedia.org/wiki/David_Plouffe [3] http://www.cnbc.com/2017/01/10/ubers-david-plouffe-to-join-chan-zuckerberg.html http://www.cnbc.com/2017/01/10/ubers-david-plouffe-to-join-c... [4] http://www.businessinsider.com/delete-uber-hashtag-jfk-airport-taxi-strikes-2017-1 http://www.businessinsider.com/delete-uber-hashtag-jfk-airpo... [5] https://www.axios.com/uber-didnt-deserve-deleteuber-2225893201.html https://www.axios.com/uber-didnt-deserve-deleteuber-22258932...
justinzollars 10y ago
I use Lyft because I am able to tip the driver. Also if you ask the drivers which platform they prefer typically they say Lyft treats them better. That is my reason.
hueving 10y ago
Many people have no problem with the contractor model or disrupting the ridiculous cab system. However, systemic sexual harassment and a generally abusive CEO is not something most people want to support.
- jimmywanger 10y ago
  > However, systemic sexual harassment That has yet to be proven with any sort of evidence other than an uncorroborated blog post or two.
cwp 10y ago
I don't feel Lyft is some paragon of virtue. AFAICT they're a regular Silicon Valley tech company with all of the usual tensions associated with that. The service they provide is a huge improvement on what came before, but there are privacy concerns related to the data they collect and use for business purposes. They'll probably push the envelope a bit on what they can do with that information, and then back down whenever there's significant pushback. Uber, on the other hand, is a cesspool. It's run by sociopaths who think business success confers moral authority, and are quite annoyed with all the hullaballoo about "right" and "wrong" that their actions periodically provoke. I have no problem with their business model, but I will not use Uber. I don't trust them with my credit card, and I don't want them tracking my movements.
digitalzombie 10y ago
Uh.... Uber vetting is weak compare to Lyft. They're both may not be super stringent but I've seen Uber vetting process and Lyft. Lyft was felt much better compare to Uber.
imh 10y ago
On iphone, uber's app now requires you to give it permission to see your location always, regardless of whether the app is open. With lyft, the app only needs my location while it is open. That's a huge one in my book. The day uber updated and said it had to track me 24/7 was the day I deleted it.
Apocryphon 10y ago
Tonight I've learned that Uber, on iOS, tracks the user's location even when the app is inactive, for at least ten minutes after a ride is over. Lyft only tracks location while a ride is in session. Would like someone to confirm this.

myblake 10y ago

While I think now is probably the time for lyft to strike while the iron is hot, I appreciate nytimes' candor in acknowledging neither Lyft nor Uber has demonstrated a "financially viable business". The road ahead is undoubtedly not easy for Lyft.

a13n 10y ago
> neither Lyft nor Uber has demonstrated a "financially viable business Self driving cars
- semiquaver 10y ago
  > demonstrated
- vkou 10y ago
  In the magical future where self-driving cars will be able to replace 100% of what a driver does 100% of the time, what barrier to entry will protect Uber from competition? What stops someone from leasing a few dozen vehicles, and opening up their NotUber self-driving taxi service?
  - chime 10y ago
    The client app, backend tech, and economies of scale.
  - j_koreth 10y ago
    Small barriers to entry - Cost of purchasing said vehicles Cost of developing a Uber=style app Even past this, the industry will never be highly profitable in the long run because of competition from people who do get past this
  - ryanSrich 10y ago
    Nothing will stop them, and the company to replace Uber won't own the cars. They'll simply make technology that empowers self-driving car owners to earn money with their car while they're sitting at work.

deleted 10y ago

[deleted]

m3kw9 10y ago

If that is the best shot Lyft has, it would seem futile

qq66 10y ago

I don't think this will work because I don't think modern megacorporations suffer consequences for poor ethics the way normal-sized local businesses did a hundred years ago. If the local tannery was run by a bad person, people would say "I don't do business with him" and he could lose 50% of his serviceable customers and employees. Today, the corporations are completely faceless, and the fact that there are actual people behind Uber the company is not readily apparent when using their app. People will just go for the cheapest ride and think only briefly about the scandal they read about last week.

a13n 10y ago
Except when #DeleteUber trends on Twitter... Sure it won't be 50% but I doubt the charts look pretty
- ryanSrich 10y ago
  I'd wager the folks reading Twitter and random blogs on medium occupy a microscopic portion of Uber consumers. I would be very surprised if Uber saw any significant hit to their business because of the recent events

jwatte 10y ago

Also, the quality of Uber cars has declined, even within "black" and especially "SUV" classes. So, might as well save the money.

maxander 10y ago

Lyft and Uber, from a birds-eye view, do the exact same thing; and furthermore, neither is profitable, so the entire market is built upon potential future sales bases. Lyft is here valued at, generously, $7 billion. Meanwhile, Uber's valuation is reported variously, but a general Google search suggests its well in excess of $50 billion. This exceeds any expectation of market craziness. Are these investors talking to each other? Are things so far gone that a vague promise of self-driving cars is worth almost a factor of ten valuation difference?

prostoalex 10y ago
Early stage private valuations tend to be focused on future potential, usually expressed in total addressable market figures. Lyft was selling slow expansion (they're still a US-only operator, and even within the US operate in relatively few markets) and most likely positive cashflow. Uber was selling rapid global expansion, where each new city could be scaled up via Uber playbooks. Then it started selling itself as "last-mile logistics provider" for things like food deliveries and clothing. Then as a leading developer of self-driving vehicles, later complemented by self-driving trucks, later complemented by self-elevating passenger-carrying robotic drones. You have to give Uber credit, they do address a broader TAM, even if their underlying core business doesn't seem that different from Lyft or Gett or Wingz or Hailo or MyTaxi or Didi or GrabTaxi or Ola or Yandex.Taxi.
- curiousDog 10y ago
  Oh wow, this is the first I'm hearing of it. Yandex, the search engine operates a Yandex.taxi? That's pretty interesting, all major Global search engines, Google, Yandex, Baidu have interests in developing self-driving cars as well.
  - prostoalex 10y ago
    https://yandex.com/company/press_center/press_releases/2011/2011-10-26/ https://yandex.com/company/press_center/press_releases/2011/... https://www.engadget.com/2016/08/28/yandex-teams-on-self-driving-shuttle-bus/ https://www.engadget.com/2016/08/28/yandex-teams-on-self-dri...

alphonsegaston 10y ago

Anybody who's got a small but viable alternative to Uber could really benefit by pivoting to an "ethics first" model right now. Between Kalanick and Thiel, the market seems ripe for disruption.

dwg 10y ago
Can you give an example of large companies which operate on a "ethics first" model?
- omarchowdhury 10y ago
  They certainly imply they do in their marketing message.
- throwaway2048 10y ago
  costco and mars incorporated both have long histories of ethical, sustainable practices, and a strong reputation for resisting the quality lowering death spirals that infect many consumer goods focused companies.
  - dwg 10y ago
    Costco is probably the best example that comes to mind for me to, considering the scale at which they operate and the fact that they are actually widely reputed for their ethical practices. Nonetheless I think they are an exception and, while not impossible, it would be pretty difficult to disrupt the disruptor with a business model based on being more ethical.
    - ftlio 10y ago
      Costco's profits are less their subscription revenue. That tells me the space for bulk retailers in middle class areas with the type of consumers that can shell out a yearly subscription fee isn't a whole lot bigger than Costco already occupies. Costco shoppers have more money, so they can buy more economically at Costco quantities, and they have a higher expectation of service which requires a higher paid employee. Costco has effectively packaged that arrangement in a $50 fee and keeps prices competitive by selling mostly bulk quantities compared to grocery stores. Good luck trying to compete at scale while holding on to costly values that your competitors don't. Your choices are fail entirely or carve out a niche that you can keep almost exclusively. In my mind, the mental ceiling keeping us from understanding 'Why more companies can't be like Costco' and 'What's the real value of an Uber ride sans venture capital subsidies' is a lack of understanding of the extensive properties of capital that automation is going to either push us through or bring down on us in a rain of deadly glass shards. I'm not going to wait around for the market to 'get real' and 'focus on companies with actual viable business models' though. 1) The bulk of your portfolio should already be occupied by companies that fit that mold, but 2) The practice of leveraging profitability today for gains in equity tomorrow is going to push through a few big winners consistently enough that it's not going away regardless of the overall consequences. Meanwhile we'll keep asking the same questions that ultimately amount to 'Why does capital beget capital?'

simplehuman 10y ago

Let's say I have to take a cab everyday to work. If Uber gives me a ride for 15 bucks and Lyft gives me the same ride for 18 bucks, I know which one I will choose. Do you?

teach 10y ago
It's easy for me to say, but I won't ride in an Uber vehicle. I've disagreed with their practices for quite some time, and these more recent events have only solidified my resolve. I'm sure I'm the tiny minority, but $3 a day is a pittance vs knowing I'm supporting such a toxic culture. Plus, if you can't afford an "extra" $3 a day to get to work, then use neither Uber nor Lyft and get on a bus.
- simplehuman 10y ago
  My understanding is that Uber was never popular in cities with good public transport... As for 3$ a day, this is the choice people make everyday with using free Google stuff and promoting ads and surveillance culture. It's really not that simple as money as you make it sound.
bbcbasic 10y ago
Hypothetically, for $3 difference? Probably the quicker/more reliable service. I'd probably look into car pooling as well. In reality neither, would find some other way (cycle / public transport / lift with friend / cab / own car)

aliceyhg 10y ago

I had the opportunity to speak with an Uber driver today who spoke with a gentle voice and was very pleasant. She didn't speak much and when she did, she was very agreeable. However, when the Uber topic came up, she was very vocal about how unhappy she was driving with Uber (She did not know about the recent Uber drama going on because she was so busy driving all the time). She complained about Uber's frequently changing driver bonuses. Right when she figures out a routine that fits her schedules, Uber sweeps out the rug from under her and changes the payment structure. Example: Previously you complete 125 rides / week and you will get a $500 bonus. This a significant number for her. Now, Uber split it up so you have to do 75 rides by Thursday to earn $250. Then do 65 rides on fri/sat/sun to earn the remainder $250. This is incredibly frustrating for her because on weekends she usually gets long rides (SF to San Jose). This immediately takes an hour off her day (for one ride) and she would have to work extra to meet her target. Obviously, I asked her why she doesn't drive for Lyft. She used to, and Lyft did many things right. She loved it. However, Lyft decided to take away Lyft power driver bonus (similar to Uber's bonus) and that made a significant dent in her earning potential. She had to switch and drive for Uber to make ends meet. I'd imagine many Lyft drivers had a similar reaction, which is why I still find much more drivers on Uber than on Lyft despite the all the negative publicity. Here are some things that I think Lyft can improve on their business strategy: 1. Be willing to do what it takes to succeed. Uber has repeatedly shown their agility and versatility to adapt to changes around them. When they realized that Uber Black was not what the public wanted, they introduced UberX (which screwed over alot of their existing drivers) and lowered fares. It was harsh and unfair, but it had to be done. If I was running Lyft and was low on cash and could not afford to continue driver bonuses, I would have laid off a chunk of the engineering team / staff to raise capital to retain the drivers from switching. 2. With all these #deleteUber hashtags, why haven't I heard any of my friends promoting Lyft? Now should be the perfect time to splurge on marketing and capture all the disgruntled uber drivers and passengers. Wait a month, most of the fire would have died. As much as I love Lyft and the experience I have riding with Lyft, I prefer giving that up for a cheaper service. Most people I know would prefer to save money. I hope Lyft figures out an aggressive business strategy and become a viable Uber competitor.

songzme 10y ago

Anyone tried carpooling services like Waze pool? As an employee at google, I decided to give Waze pool a try. I live in San Jose and usually ride the google shuttle to work. During traffic, it takes about 1 hour to 1.5 hours (keep in mind Google shuttle has multiple stops). After using Waze Rider a few times, it has now become my main mode of transportation to work and back. It cost $5 (and possibly less) and you get to sit in a car and talk about life, share your interests, problems, with another human being. So far I have completed about 26 rides and the socializing aspect outside of my social circle makes my commute much more exciting. Since drives can't make a living off the money from Waze carpool, the drivers I tend to meet are those who doesn't really need the money and simply doing it to meet new people. They all have different backgrounds going to work (or home). I've met a nanny, tax accountant, an aspiring policeman going to the academy, VP of a company, and software engineers. Yesterday, I waze carpooled with a product manager and a startup who picked me up in his Tesla. It was the first time I've ridden in a Tesla.

booi 10y ago
Looks like we found the Google employee
- humanrebar 10y ago
  > As an employee at google It was disclaimed. Let's not be snarky.

cpprototypes 10y ago

I often wonder what is the natural market price of these services? Basically, without massive VC money distorting everything, how much would a Lyft or Uber ride really cost? I have a feeling it would be much higher than now. Despite all the hype, true level 5 self driving is decades away. When the VC money stops, what are these companies going to do? I think the only viable option for them is Lyft Line/Uber Pool. It benefits from network effects (more using the service, better it gets) which also prevents newcomers. It could become a monopoly like Facebook. They should be pushing this harder than unrealistic dreams of level 5 self driving.

Gibbon1 10y ago
I saw one economist trying to figure out what the appropriate fare for BART should be. Ans: Free. One place I worked in the early 2000's gave us checks were could redeem for transit. https://commuterbenefits.511.org/docs/faq.pdf https://commuterbenefits.511.org/docs/faq.pdf One thought might be to have a subsidized ride share system where employers/transit authority pays people to ride share. Impression that based on transit authorities reaction to causal car pooling is they wouldn't support it. AKA they don't want people carpooling they want them to ride busses. Second thought of mine based on buses in San Francisco is the buses are too large and too few. More smaller buses would increase ridership and reduce trip times.
- kingnothing 10y ago
  You can already pay for Uber rides with commuter benefit cards. https://newsroom.uber.com/poolcommutes/ https://newsroom.uber.com/poolcommutes/
  - Gibbon1 10y ago
    My thought might be interesting if car poolers could tap into the commuter benefit cards. AKA pick up someone on the way to work and they can transfer 25-50 cents a mile into your account.

foxfired 10y ago

Here is how I see it. I rely on those rides to go to work every single day and here what it (would) costs me. Uber: $250 a month.(Majority) Lyft: $500 a month (Whenever Uber is too expensive) Bus : $100 a month (1h:15 for 6 miles and 3 buses... No) Politics and all internal conflicts aside, there is a need for these services whether we like it or not. When I need to make a decision in the morning I take whatever is the least expensive and more convenient. I don't want to spend hours on the bus and I do not want a good chunk of my paycheck to go to simply getting to work. Speaking with drivers everyday, I understand their frustration of driving all around town only for very small profit. Just today, I took a ride with a driver that seemed very frustrated. I didn't want to intrude but he ended up tell me how much he hates UberPool (that's what I use). 70 cents per mile, and when a second rider joins the rate goes down, and for the next even lower. We were 3 different riders. In the riders perspective, we want the cheapest and most reliable. Sure I want to support those who work for a company that respect them but at the end of the day it is not a charity. What is the answer in the consumer's perspective? Edit: Formatting

yunti 10y ago
The answer is that, you are using a service that is unsustainably too cheap. In the longer term the price will have to increase, probably quite significantly and you'll have to choose whether you think it's still worth it or take the bus. Unfortunately you, and many others are the ones benefitting from drivers being underpaid.
- kagamine 10y ago
  It's almost like Uberpool could be a privately run bus service using larger vehicles and transporting more people at once, instead of private taxis. Depending on the angle you view it from, perhaps the Uberpool service isn't too cheap, but simply a bad idea from the start, without the infrastructure or a suitable class of vehicle to make it viable.
  - jordigh 10y ago
    So... privatised public transportation? Maybe that's what it'll take for the US to improve its public transportation. Having good ol' fashioned private enterprise instead of the government paying for it.

pfarnsworth 10y ago

Lyft couldn't sell themselves for $5B and now they're looking for funding at $6B. I'm curious as to who would be dumb enough to invest in Lyft after a scenario like that.

curiousDog 10y ago
The same ones who were dumb enough to invest in Uber I guess.

eddieplan9 10y ago

According to leaked financial in [1], Lyft is expected to generate $32M of net revenue on about $158M of fare, while losing $50M per month. If everything stays the same, Lyft would have to raise rate by 156% to break even. Also, Lyft's growth is mostly purchased: > While rides increased about 11 percent from April to May, fully paid rides, without the use of a coupon or a credit, grew by only 5 percent in that period. They recently launched in 50+ cities simultaneously, which means they will bleed cash faster in hope of generating some growth number. In comparison, according to [2], in Q3 of 2016, Uber collected 5.5B of fare, and after paying drivers, had a net revenue of 1.7B (30%) and a loss of 800M. If everything stays the same, Uber could break even by raising rate by 47%. If you consider that most of the loss is from developing markets, it's actually not that hard for Uber to break even in the U.S. [1] https://mattermark.com/lyft-financials/ https://mattermark.com/lyft-financials/ [2] https://www.bloomberg.com/news/articles/2016-12-20/uber-s-loss-exceeds-800-million-in-third-quarter-on-1-7-billion-in-net-revenue https://www.bloomberg.com/news/articles/2016-12-20/uber-s-lo... Edits: grammar

rtpg 10y ago
Uber was in a similar situation to Lyft not too long ago. Uber's also already said that they're cash-positive in the US, and Lyft is focused on the US for now. It's not hard to imagine that after this multi-city expansion, costs will go way down. I wouldn't qualify the growth as "mostly purchased" when it's... 50/50 couponed/full? That seems to be more a consequence of the multi-city launch than anything. I'm pretty optimistic of Lyft's chances here (politically motivated by Uber's attitude, granted). They're spending a lot of money to capture parts of a well-defined market (US carsharing), and have a PR edge with informed riders. Uber could theoretically start couponing to hell and back in the US again, but they're going to run out of money someday.
- acchow 10y ago
  > I wouldn't qualify the growth as "mostly purchased" when it's... 50/50 couponed/full If most of their customers are buying only because they are selling under the market price, then it doesn't matter if the subsidy is 5% or 50% or 100%; their sales are "mostly purchased". Imagine you open a store tomorrow and sell gold for 1% under the market price - suddenly your sales blow up to $1 billion in a day. You have purchased all of your sales, with just a 1% coupon.

jonthepirate 10y ago

Hopefully us former employees see some liquidity before driverless wipes these companies out. The value of ride dispatching aggregators is in the driver network. Apps and cars are easy to make.

randyrand 10y ago

Do we have any reason to believe Lyft is actually more moral? And not just putting on a "we're moral" marketing stunt?

jcl 10y ago
I personally was convinced Lyft was more moral when Uber employees did things like booking Lyft rides for the purposes of recruiting away the drivers or making fake Lyft accounts to book and cancel thousands of rides. As far as I can tell, Lyft employed no similar tactics. http://money.cnn.com/2014/08/11/technology/uber-fake-ride-requests-lyft/ http://money.cnn.com/2014/08/11/technology/uber-fake-ride-re... http://www.businessinsider.com/ubers-operation-slog-against-lyft-2014-8 http://www.businessinsider.com/ubers-operation-slog-against-...

systematical 10y ago

I'm really surprised that Lyft and Uber are not profitable. As for which is better. Uber once charged my friend $80 for a 15 minute ride in Salt Lake City around midnight. There is a markup and a then there is bend over. They marked up a bend over on that one. I try my best not to use them. I also like the option of giving a tip.

arjie 10y ago
They tell you what the markup is ahead of time. The markup is a good thing. It's efficient pricing. Society is better for it. I find it comforting knowing that in an emergency I can get somewhere in an Uber. If pricing didn't rise with demand or dropping supply, I can't have that guarantee. In SF, I've never had the "no cars available". That's what I want. The knowledge that ubiquitous rapid transport is available for some price within my reach. Sure, if it cost £1000 for a ride that'd be different. But even on the 4.75 I've seen in SF it's never gone that high.
tim333 10y ago
On the other hand when I visited SF I did five rides on Lyft and got charged $0.79 in total which I thought very nice of them but not very profitable. They gave me one of their intro deals.

brogrammer2 10y ago

Wouldn't it be better, if half of that money could go into improving the public transport of cities or building new infrastructure that would ease up congestion on roads?

patrickaljord 10y ago

Outside of SV and HN crowd, I don't know of anyone who heard of the scandals here in Paris at least. They seem to be doing great (or at least similar than pre-scandals).

Apocryphon 10y ago

Anyone betting that GM will end up acquiring them?

losteverything 10y ago

I'm curious. Do you price check each time?? Is there an app that can determine which is cheapest? If the prices are about the same can you hail both and take the one that arrives first (& cancel)? (Getting from a to b is a commodity) Does the uber app detect that you have a competitor and can it be smart enough to price accordingly?