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You can't forget the difference in scale. Lyft is only in USA, while Uber is a global company. For them to enter Europe/Asia now, would mean tremendous investme

You can't forget the difference in scale. Lyft is only in USA, while Uber is a global company. For them to enter Europe/Asia now, would mean tremendous investment.

prostoalex 9y ago
Would be interesting to know if revenues and profits match that valuation at the same 10x coefficient.
- pisarzp 9y ago
  Uber seems to be in 581 cities [1] while Lyft in 200 [2]. So this is 3x difference. However, Uber is more global, therefore has much more large cities around the globe. It wouldn't be unreasonable to assume that on average cities are 2-3x larger. This alone could justify valuation gap. I would also assume that because of global presence, Uber has higher usage due to travellers. [1] http://uberestimator.com/cities http://uberestimator.com/cities [2] http://www.theverge.com/2017/1/25/14383370/lyft-expansion-new-cities-list-2017-far-cuts http://www.theverge.com/2017/1/25/14383370/lyft-expansion-ne...
  - prostoalex 9y ago
    Agreed, but from financial perspective the distinction between "profitable cities" and "subsidized cities" is important. As UberChina experience shows, the expansion (to 100 cities, no less https://www.cnet.com/news/uber-pledges-to-expand-to-100-more-chinese-cities/ https://www.cnet.com/news/uber-pledges-to-expand-to-100-more... ) is costly and sometimes turns out to be never sustainable.
aetherson 9y ago
Tremendous investment towards very uncertain results. Asia in particular -- what exactly is the point of investing in Asia? Uber got kicked out of China, and besides Japan, what other market is really worth investing in there for a company that constantly struggles with unit margins? I think I agree that Lyft is the better opportunity right now to Uber based on valuations -- while Lyft is clearly the less valuable company, it's hard for me to believe that it's 10x less valuable. 5x? Sure. But that makes Lyft twice as good an opportunity as Uber. Unfortunately, I think that both companies are most likely doomed. Uber almost certainly, Lyft maybe a little less certainly. There really isn't much sign that there's a $7B business in ride sharing, much less a $70B business.
- pisarzp 9y ago
  I beg to differ here. Once you get the scale like Uber, and you don't have to spend billions on marketing, this is a very high margin business. Minimal costs to maintain infrastructure and 20% cut on millions of ride's a day. The only reason Uber was struggling is because it wanted total global domination. It was a land grab, and they played it quite well. Failed in China, but succeeded in quite large portion of the globe.
  - aetherson 9y ago
    This is a very 2015-era comment. We've seen a lot of evidence over the last year-and-a-half that it's just not true that Uber's only expenditures are on expansion. I think that this is the reality: 1. There are lots of reasons why customers may not take an Uber. They could take a Lyft, they could take their own car, they could take public transportation, they could take a taxi, and they could in many cases just not go out or substitute a closer destination. 2. Uber achieves high ride volumes in the face of #1 by heavily subsidizing both drivers and passengers, even in the case of relatively mature markets. This drives their profit margins down to extremely thin levels, or in fact negative. 3. Their proposed technological solutions to their margin problem have either not been broadly popular (Uber Pool) or have major roadblocks to even existing (self-driving cars). 4. Their proposed business model solution to their margin problem (being a logistics company) have the problem that nobody wants to be their customer. 5. All of the above are true even in the developed world, where a ride might average $15 and Uber's cut before subsidies might average $3. All of their expansion opportunities now (and in the last few couple of years) are in areas where a ride might average $5 and Uber's cut before subsidies might average $1 (or worse), making it harder and harder to recover the relatively fixed costs of expansion. 6. There is obviously a profitable business in being a taxi company. It's just not a $70B business, and indeed I'm not sure it's a $7B business.
    - pyromine 9y ago
      My only Uber pool experience was when in San Francisco the whole group I was with would all request an uber pool for two people and the people who didn't get the same driver would quit. We accordingly were using it to get cheaper rides that was the exact same experience as a normal uber
Apocryphon 9y ago
Lyft could at least expand into Canada, but it looks like even there Uber is running into regulatory issues. They've been wise to let Kalanick's crew run headlong and act as the guinea pigs for the differences in local laws and market conditions around the world.
- tuna-piano 9y ago
  It's wise for a company in an industry with strong network effects to purposely give up first mover advantage?
  - matthewmacleod 9y ago
    That's interesting - these are companies that I would consider to have minimal network effect. There isn't much of a barrier to both drivers and users installing and using both services. It seems like a pretty workable idea to let Uner take the first-mover regulatory risk then follow them into the market and clean up.
    - JumpCrisscross 9y ago
      > these are companies that I would consider to have minimal network effect Gett raised $100 million [1], designed a decent app and put up a bunch of billboards all over Manhattan. I tried to use it for over a month. The drivers were friendly, the cars were wonderful and the rates were great. But the waits were like 20 minutes. Haven't used it since. [1] https://www.bloomberg.com/news/articles/2016-11-30/uber-rival-gett-receives-100-million-from-russia-s-biggest-bank https://www.bloomberg.com/news/articles/2016-11-30/uber-riva...
      - k-mcgrady 9y ago
        Sounds like a bad launch (lots of marketing - leading to lots of users - when you don't have the drivers to handle it) and pretty easy problem to solve.
    - deleted 9y ago
      [deleted]
bernardlunn 9y ago
Yes but Uber already lost in China.

You can't forget the difference in scale. Lyft is only in USA, while Uber is a global company. For them to enter Europe/Asia now, would mean tremendous investment.

prostoalex 9y ago

Would be interesting to know if revenues and profits match that valuation at the same 10x coefficient.

pisarzp 9y ago
Uber seems to be in 581 cities [1] while Lyft in 200 [2]. So this is 3x difference. However, Uber is more global, therefore has much more large cities around the globe. It wouldn't be unreasonable to assume that on average cities are 2-3x larger. This alone could justify valuation gap. I would also assume that because of global presence, Uber has higher usage due to travellers. [1] http://uberestimator.com/cities http://uberestimator.com/cities [2] http://www.theverge.com/2017/1/25/14383370/lyft-expansion-new-cities-list-2017-far-cuts http://www.theverge.com/2017/1/25/14383370/lyft-expansion-ne...
- prostoalex 9y ago
  Agreed, but from financial perspective the distinction between "profitable cities" and "subsidized cities" is important. As UberChina experience shows, the expansion (to 100 cities, no less https://www.cnet.com/news/uber-pledges-to-expand-to-100-more-chinese-cities/ https://www.cnet.com/news/uber-pledges-to-expand-to-100-more... ) is costly and sometimes turns out to be never sustainable.

aetherson 9y ago

Tremendous investment towards very uncertain results. Asia in particular -- what exactly is the point of investing in Asia? Uber got kicked out of China, and besides Japan, what other market is really worth investing in there for a company that constantly struggles with unit margins? I think I agree that Lyft is the better opportunity right now to Uber based on valuations -- while Lyft is clearly the less valuable company, it's hard for me to believe that it's 10x less valuable. 5x? Sure. But that makes Lyft twice as good an opportunity as Uber. Unfortunately, I think that both companies are most likely doomed. Uber almost certainly, Lyft maybe a little less certainly. There really isn't much sign that there's a $7B business in ride sharing, much less a $70B business.

pisarzp 9y ago
I beg to differ here. Once you get the scale like Uber, and you don't have to spend billions on marketing, this is a very high margin business. Minimal costs to maintain infrastructure and 20% cut on millions of ride's a day. The only reason Uber was struggling is because it wanted total global domination. It was a land grab, and they played it quite well. Failed in China, but succeeded in quite large portion of the globe.
- aetherson 9y ago
  This is a very 2015-era comment. We've seen a lot of evidence over the last year-and-a-half that it's just not true that Uber's only expenditures are on expansion. I think that this is the reality: 1. There are lots of reasons why customers may not take an Uber. They could take a Lyft, they could take their own car, they could take public transportation, they could take a taxi, and they could in many cases just not go out or substitute a closer destination. 2. Uber achieves high ride volumes in the face of #1 by heavily subsidizing both drivers and passengers, even in the case of relatively mature markets. This drives their profit margins down to extremely thin levels, or in fact negative. 3. Their proposed technological solutions to their margin problem have either not been broadly popular (Uber Pool) or have major roadblocks to even existing (self-driving cars). 4. Their proposed business model solution to their margin problem (being a logistics company) have the problem that nobody wants to be their customer. 5. All of the above are true even in the developed world, where a ride might average $15 and Uber's cut before subsidies might average $3. All of their expansion opportunities now (and in the last few couple of years) are in areas where a ride might average $5 and Uber's cut before subsidies might average $1 (or worse), making it harder and harder to recover the relatively fixed costs of expansion. 6. There is obviously a profitable business in being a taxi company. It's just not a $70B business, and indeed I'm not sure it's a $7B business.
  - pyromine 9y ago
    My only Uber pool experience was when in San Francisco the whole group I was with would all request an uber pool for two people and the people who didn't get the same driver would quit. We accordingly were using it to get cheaper rides that was the exact same experience as a normal uber

Apocryphon 9y ago

Lyft could at least expand into Canada, but it looks like even there Uber is running into regulatory issues. They've been wise to let Kalanick's crew run headlong and act as the guinea pigs for the differences in local laws and market conditions around the world.

tuna-piano 9y ago
It's wise for a company in an industry with strong network effects to purposely give up first mover advantage?
- matthewmacleod 9y ago
  That's interesting - these are companies that I would consider to have minimal network effect. There isn't much of a barrier to both drivers and users installing and using both services. It seems like a pretty workable idea to let Uner take the first-mover regulatory risk then follow them into the market and clean up.
  - JumpCrisscross 9y ago
    > these are companies that I would consider to have minimal network effect Gett raised $100 million [1], designed a decent app and put up a bunch of billboards all over Manhattan. I tried to use it for over a month. The drivers were friendly, the cars were wonderful and the rates were great. But the waits were like 20 minutes. Haven't used it since. [1] https://www.bloomberg.com/news/articles/2016-11-30/uber-rival-gett-receives-100-million-from-russia-s-biggest-bank https://www.bloomberg.com/news/articles/2016-11-30/uber-riva...
    - k-mcgrady 9y ago
      Sounds like a bad launch (lots of marketing - leading to lots of users - when you don't have the drivers to handle it) and pretty easy problem to solve.
  - deleted 9y ago
    [deleted]

bernardlunn 9y ago

Yes but Uber already lost in China.