4 ms·

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.

by 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.
- disiplus 10y ago
  thats the price of acquiring a customer. for my saas the cost to acquire a customer is X, X is multiple of montly fees. so only after couple of months im going to be on 0. The cost for me could be adwords, running a free plan, or something else. how is this different. I assume that they hope to convert some of those to regular customers.
  - aedron 10y ago
    "We'll sell at a loss but we'll make it up in volume."
    - vacri 10y ago
      Selling at 1% under market price is only a loss if you're acquiring from the same market.
  - mcherm 10y ago
    The difference between an acquisition cost per customer but making money on each transaction and losing money on each transaction is that the first can be a viable business if you can retain customers long enough while the second will always lose money. Offering below-cost deals to all customers for a time (to acquire them) then raising prices to a profitable level is different from either. Unlike the second, it might make money in the long run. Unlike the first, the ability to make a profit hasn't been demonstrated yet.

by rtpg 10y ago

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.

disiplus 10y ago
thats the price of acquiring a customer. for my saas the cost to acquire a customer is X, X is multiple of montly fees. so only after couple of months im going to be on 0. The cost for me could be adwords, running a free plan, or something else. how is this different. I assume that they hope to convert some of those to regular customers.
- aedron 10y ago
  "We'll sell at a loss but we'll make it up in volume."
  - vacri 10y ago
    Selling at 1% under market price is only a loss if you're acquiring from the same market.
- mcherm 10y ago
  The difference between an acquisition cost per customer but making money on each transaction and losing money on each transaction is that the first can be a viable business if you can retain customers long enough while the second will always lose money. Offering below-cost deals to all customers for a time (to acquire them) then raising prices to a profitable level is different from either. Unlike the second, it might make money in the long run. Unlike the first, the ability to make a profit hasn't been demonstrated yet.