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They clearly have different objectives. Uber wants to be a huge multinational company, whereas Lyft can only hope to win the US market. In other words, even Ly

by resf 9y ago

They clearly have different objectives. Uber wants to be a huge multinational company, whereas Lyft can only hope to win the US market. In other words, even Lyft's best case scenario would be a huge step down for Uber.

ubernostrum 9y ago
No amount of "we were briefly a huge multinational" will compensate for a fundamentally unsound business. Sooner or later the free money is going to run out and Uber is going to have to stop hemorrhaging nearly a billion dollars every quarter. When that day comes they're not going to have a lot of options to stop the bleeding: raising prices and cutting back the markets they operate in are likely to be the first things they do, or are forced to do by investors. Meanwhile, the way you build a huge multinational is by first figuring out a way to make money and then scaling it to everywhere, not by figuring out how to be everywhere and then realizing "crap, we have to actually turn a profit now".
- throwaway434232 9y ago
  They are growing revenue faster than their losses and they are profitable in mature markets. That sounds like a fundamentally sound business to me. The cognitive dissonance you're suffering from is the inability to believe that investors will take on losses on the order of a billions of dollars to build a profitable business. Millions of dollars are okay, but changing millions to billions and people are like "that money has to run out eventually". That's not how investors operate. If the opportunity is on the order of billions of dollars as well (maybe trillions), investments of billions of dollars isn't that big in the grand scheme of things. What matters is that the size of the opportunity is large and that revenue grows faster than losses. So long as those two things are true, there will be no lack of investors willing to pony up the money to be on that gravy train.
  - ubernostrum 9y ago
    I do not believe Uber's future value to investors is equal to the amount of money already put into it, let alone orders of magnitude higher (and "trillions" of dollars -- as you suggest -- is laughable).
rtpg 9y ago
In a world where Lyft wins the US market, they then have a battle chest for future expansion. Apparently Uber is already profitable in the US and thus can use that to finance further growth, but nothing is stopping Lyft from going back in that game at a later date. If anything Uber's best strat would probably be to refocus on the US and crush Lyft everywhere, rather than give it the room to breath it needs.
- resf 9y ago
  Lyft can't expand outside the US because there are already local competitors. If I'm happy using Grab, why would I bother installing Lyft?
- throwaway434232 9y ago
  Uber is apparently already profitable in the US. Does anyone know if Lyft is? If it is not, then that would suggest that Lyft is more guilty than Uber of subsidizing rides in order to win market share. 2016 numbers: Lyft Revenue: $700 million Lyft Losses: $600 million Uber Revenue: $6 billion Uber Losses: $2.8 billion The ratio of revenue to losses suggest that Uber is almost twice as efficient as Lyft, and Uber's losses are probably further compounded as it includes many more future investments such as international markets that aren't yet as mature as the US market, and products/services that for which Lyft has no comparable offering like UberRush and UberEats. Lyft also doesn't have any investment in self-driving cars that I'm aware of.

by resf 9y ago

ubernostrum 9y ago

No amount of "we were briefly a huge multinational" will compensate for a fundamentally unsound business. Sooner or later the free money is going to run out and Uber is going to have to stop hemorrhaging nearly a billion dollars every quarter. When that day comes they're not going to have a lot of options to stop the bleeding: raising prices and cutting back the markets they operate in are likely to be the first things they do, or are forced to do by investors. Meanwhile, the way you build a huge multinational is by first figuring out a way to make money and then scaling it to everywhere, not by figuring out how to be everywhere and then realizing "crap, we have to actually turn a profit now".

throwaway434232 9y ago
They are growing revenue faster than their losses and they are profitable in mature markets. That sounds like a fundamentally sound business to me. The cognitive dissonance you're suffering from is the inability to believe that investors will take on losses on the order of a billions of dollars to build a profitable business. Millions of dollars are okay, but changing millions to billions and people are like "that money has to run out eventually". That's not how investors operate. If the opportunity is on the order of billions of dollars as well (maybe trillions), investments of billions of dollars isn't that big in the grand scheme of things. What matters is that the size of the opportunity is large and that revenue grows faster than losses. So long as those two things are true, there will be no lack of investors willing to pony up the money to be on that gravy train.
- ubernostrum 9y ago
  I do not believe Uber's future value to investors is equal to the amount of money already put into it, let alone orders of magnitude higher (and "trillions" of dollars -- as you suggest -- is laughable).

rtpg 9y ago

In a world where Lyft wins the US market, they then have a battle chest for future expansion. Apparently Uber is already profitable in the US and thus can use that to finance further growth, but nothing is stopping Lyft from going back in that game at a later date. If anything Uber's best strat would probably be to refocus on the US and crush Lyft everywhere, rather than give it the room to breath it needs.

resf 9y ago
Lyft can't expand outside the US because there are already local competitors. If I'm happy using Grab, why would I bother installing Lyft?
throwaway434232 9y ago
Uber is apparently already profitable in the US. Does anyone know if Lyft is? If it is not, then that would suggest that Lyft is more guilty than Uber of subsidizing rides in order to win market share. 2016 numbers: Lyft Revenue: $700 million Lyft Losses: $600 million Uber Revenue: $6 billion Uber Losses: $2.8 billion The ratio of revenue to losses suggest that Uber is almost twice as efficient as Lyft, and Uber's losses are probably further compounded as it includes many more future investments such as international markets that aren't yet as mature as the US market, and products/services that for which Lyft has no comparable offering like UberRush and UberEats. Lyft also doesn't have any investment in self-driving cars that I'm aware of.