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Lyft and Juno will run out of cash by the end of this year and be forced to sell to companies that won't run them at a loss, that Lyft $500 million round they

by flylib 10y ago

Lyft and Juno will run out of cash by the end of this year and be forced to sell to companies that won't run them at a loss, that Lyft $500 million round they are trying to shop around won't happen (that leak is a bad sign, early Lyft investors are dumping their shares on the secondary market as well) and Uber currently has billions in the bank while Lyft is down to under 1 billion, Uber will raise prices and no new competitors will be able to find any funding at this point

MegaButts 10y ago
I'm curious what do you think will happen with Lyft? It sounds like GM wanted to buy them, but they weren't interested in a $5+ billion valuation. Maybe when they run out of money GM will purchase them for a much lower price.
- flylib 10y ago
  GM will purchase them for around $1-$3 billion and drastically raise prices and fire most of the employees as their public investors will be skeptical and the stock price will take a hit, Uber will be able to raise prices enough to get better economics and atleast IPO at a haircut of their current private valuation
Alex3917 10y ago
> Uber will raise prices and no new competitors will be able to find any funding at this point Until Uber has self-driving cars, there's nothing to prevent local competitors from running a few subway ads and getting enough iOS installs to keep prices down. And unlike national competitors, which require hundreds of millions of dollars, local competitors can be run on the cheap. So even if Lyft goes bankrupt, I doubt that will have much impact on prices.
- flylib 10y ago
  Juno is burning 10's of millions trying to compete on low prices and they are still in NY area only, unlikely local competitors will be able to compete at low prices unless they have a huge war chest which will come from rich founders (Juno) or investors (Uber/Lyft/etc.)
  - wickawic 10y ago
    Well low is relative. I think GPs point was that Uber can never have a real monopoly because eventually they have to operate profitably. Once the base price of a ride settles competitors can still come eat their lunch. Heck I took a taxi in Seattle for the same price as an Uber but the driver actually knew where I was going and how to navigate in traffic. Driverless cars would throw a big wench into this however.
    - dx034 10y ago
      And only if Uber is the only one coming up with it. If VW/Mercedes/GM/Ford develop driverless vehicles, anybody can build a service based on it (most likely the manufacturers themselves). The only chance for Uber to survive is to be the first one in that space. I don't see how that can happen with so many companies in advanced development stages.
  - Alex3917 10y ago
    Is Juno trying to set themselves up to be a national competitor though, or are they trying to stay local? Given that making a basic app to put dots on a map is basically free, I don't see what stops someone from investing a couple million bucks in hopes of getting a small but good return.
    - flylib 10y ago
      yes they are saying they are going to expand nationally for the last 6 months but you can't expand nationally if you are running out of money (check ride sharing forum's where drivers are starting to report sporadic payments from Juno)
BinaryIdiot 10y ago
I had no idea Lyft was operating at a loss. My Lift rides are consistently 10% to 20% higher than Uber rides of the same distance and time and they even encourage tipping. I'm not looking forward to what these companies charge when (or if) they're ever profitable. I already find them expensive, especially Lyft.
- flylib 10y ago
  they operated at a $600 million loss in 2016 http://www.businessinsider.com/lyft-lost-600-million-in-2016-uber-2017-1 http://www.businessinsider.com/lyft-lost-600-million-in-2016... the number will be higher in 2017 as they are expanding internationally (http://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-uber-outside-the-us.html http://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-ube...), they are primarily still US only while Uber is in most of the world
- sigmar 10y ago
  >I already find them expensive, especially Lyft. Expensive compared to what exactly?
  - kobeya 10y ago
    Not the person you are replying to, but if I used Uber/Lyft for everything I normally do with a car, it would be more expensive than owning a car for my own exclusive use. Even reasonable cutbacks of trips I don't really need to make if I'm paying per-mile still only get it down to about parity. Uber/Lyft has the extra cost of paying the driver, but also the supposed cost savings of sharing vehicle cost across multiple riders. I would expect it to be slightly cheaper, if it were a sustainable model.
    - greenhatman 10y ago
      The driver's pay is really what makes it more expensive. These ride sharing companies will only really become sustainable once self driving cars become prevalent. Even if it just allows the car to get to you, and then have you drive it where you need to go. I'm not sure what other costs they can cut easily. Unfortunately for them, second and third players entering the market has a huge advantage in terms of less spent on development and exploration, because they had an example to follow. Uber made the way for them, by building the app first, and testing regulators and authorities. And there is nothing keeping Uber's user base from using competitors instead. They should probably have thought about some kind of reward system. Or anything to make their users invest and want to stay more. I think they've got big problems. Problems that will be overcome better by their competitors.
odysseus1 10y ago
Hmmm...there are plenty of assertions here without factual back up. 1) If Lyft has $1B in cash and their board has capped burn at $600M per year, how will they be out of money this year? (http://www.recode.net/2017/1/13/14267926/lyft-growth-revenue-losses-profitability-discounts-incentives http://www.recode.net/2017/1/13/14267926/lyft-growth-revenue...) 2) what source states that the $500M round won't be subscribed? I read they opened it up b/c of inbound demand since they don't need the cash (see point 1)

by flylib 10y ago

MegaButts 10y ago

I'm curious what do you think will happen with Lyft? It sounds like GM wanted to buy them, but they weren't interested in a $5+ billion valuation. Maybe when they run out of money GM will purchase them for a much lower price.

flylib 10y ago
GM will purchase them for around $1-$3 billion and drastically raise prices and fire most of the employees as their public investors will be skeptical and the stock price will take a hit, Uber will be able to raise prices enough to get better economics and atleast IPO at a haircut of their current private valuation

Alex3917 10y ago

> Uber will raise prices and no new competitors will be able to find any funding at this point Until Uber has self-driving cars, there's nothing to prevent local competitors from running a few subway ads and getting enough iOS installs to keep prices down. And unlike national competitors, which require hundreds of millions of dollars, local competitors can be run on the cheap. So even if Lyft goes bankrupt, I doubt that will have much impact on prices.

flylib 10y ago
Juno is burning 10's of millions trying to compete on low prices and they are still in NY area only, unlikely local competitors will be able to compete at low prices unless they have a huge war chest which will come from rich founders (Juno) or investors (Uber/Lyft/etc.)
- wickawic 10y ago
  Well low is relative. I think GPs point was that Uber can never have a real monopoly because eventually they have to operate profitably. Once the base price of a ride settles competitors can still come eat their lunch. Heck I took a taxi in Seattle for the same price as an Uber but the driver actually knew where I was going and how to navigate in traffic. Driverless cars would throw a big wench into this however.
  - dx034 10y ago
    And only if Uber is the only one coming up with it. If VW/Mercedes/GM/Ford develop driverless vehicles, anybody can build a service based on it (most likely the manufacturers themselves). The only chance for Uber to survive is to be the first one in that space. I don't see how that can happen with so many companies in advanced development stages.
- Alex3917 10y ago
  Is Juno trying to set themselves up to be a national competitor though, or are they trying to stay local? Given that making a basic app to put dots on a map is basically free, I don't see what stops someone from investing a couple million bucks in hopes of getting a small but good return.
  - flylib 10y ago
    yes they are saying they are going to expand nationally for the last 6 months but you can't expand nationally if you are running out of money (check ride sharing forum's where drivers are starting to report sporadic payments from Juno)

BinaryIdiot 10y ago

I had no idea Lyft was operating at a loss. My Lift rides are consistently 10% to 20% higher than Uber rides of the same distance and time and they even encourage tipping. I'm not looking forward to what these companies charge when (or if) they're ever profitable. I already find them expensive, especially Lyft.

flylib 10y ago
they operated at a $600 million loss in 2016 http://www.businessinsider.com/lyft-lost-600-million-in-2016-uber-2017-1 http://www.businessinsider.com/lyft-lost-600-million-in-2016... the number will be higher in 2017 as they are expanding internationally (http://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-uber-outside-the-us.html http://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-ube...), they are primarily still US only while Uber is in most of the world
sigmar 10y ago
>I already find them expensive, especially Lyft. Expensive compared to what exactly?
- kobeya 10y ago
  Not the person you are replying to, but if I used Uber/Lyft for everything I normally do with a car, it would be more expensive than owning a car for my own exclusive use. Even reasonable cutbacks of trips I don't really need to make if I'm paying per-mile still only get it down to about parity. Uber/Lyft has the extra cost of paying the driver, but also the supposed cost savings of sharing vehicle cost across multiple riders. I would expect it to be slightly cheaper, if it were a sustainable model.
  - greenhatman 10y ago
    The driver's pay is really what makes it more expensive. These ride sharing companies will only really become sustainable once self driving cars become prevalent. Even if it just allows the car to get to you, and then have you drive it where you need to go. I'm not sure what other costs they can cut easily. Unfortunately for them, second and third players entering the market has a huge advantage in terms of less spent on development and exploration, because they had an example to follow. Uber made the way for them, by building the app first, and testing regulators and authorities. And there is nothing keeping Uber's user base from using competitors instead. They should probably have thought about some kind of reward system. Or anything to make their users invest and want to stay more. I think they've got big problems. Problems that will be overcome better by their competitors.

odysseus1 10y ago

Hmmm...there are plenty of assertions here without factual back up. 1) If Lyft has $1B in cash and their board has capped burn at $600M per year, how will they be out of money this year? (http://www.recode.net/2017/1/13/14267926/lyft-growth-revenue-losses-profitability-discounts-incentives http://www.recode.net/2017/1/13/14267926/lyft-growth-revenue...) 2) what source states that the $500M round won't be subscribed? I read they opened it up b/c of inbound demand since they don't need the cash (see point 1)