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From a purely investment point of view, why would anyone invest in Lyft over Uber? Lyft has a smaller footprint and only operates in the US (except Toronto). Th

From a purely investment point of view, why would anyone invest in Lyft over Uber? Lyft has a smaller footprint and only operates in the US (except Toronto). They are more susceptible to economic conditions in a single country, the US, and every point of marketshare they get is a zero-sum game against Uber and presumably expensive because Uber won't give it up for free. Uber has a global operations, is in multiple streams of business and has diversity across business lines and countries so even if there's a recession in one country, it might be made up for in other countries. So what's the investment story then for Lyft?

empath75 8y ago
Why would anyone invest in Pepsi over Coca-Cola? Why invest in Apple over Microsoft? Why invest in Tesla over GM? There can be more than one successful company in a segment. Also, well, you can't invest in Uber.
- jonthepirate 8y ago
  Former Lyft eng here of 2.5 yrs.. Lyft is kicking major a. Don't mean to hype it. Even if they weren't IPO'ing I can tell you they are firing on all pistons. I'm pretty sure the financials are in good shape too. Haven't worked there in 2 years though. Fingers crossed.
  - samstave 8y ago
    Were you able to keep options?
bagacrap 8y ago
Even if you invest purely cynically you might reasonably believe that Uber's toxic culture will eventually catch up with them.
- squish78 8y ago
  How would you see that playing out?
- mikekij 8y ago
  This. Why would anyone invest in Apple in 1998 instead of Microsoft?
  - Judgmentality 8y ago
    Because of the new CEO Steve Jobs?
    - mikekij 8y ago
      Fair, but you could say it's rational to choose to invest in Lyft over Uber due to Uber's new CEO.
  - perl4ever 8y ago
    I am not sure if you meant that the other way around. In 1998, Microsoft was the larger company, with the more evil reputation, which seems to parallel Uber.
jartelt 8y ago
Lower price than Uber, potential for growth if they move outside the US, belief that ride share markets are not a zero-sum game and that two companies can more or less split the market...
wolco 8y ago
Buy low = no story Sell high = pr firm creates digestable story masses flock The story is simple. The second largest ride sharing company. Underdog against evil Uber. Could become number 1 or could grow the market.
PhrosTT 8y ago
They hypothetically treat drivers better and have better relationships with them.
yhoiseth 8y ago
I agree that some things make Lyft seem more risky than Uber. But to investors, risky bets can be good if they have opportunities to diversify.
kemitchell 8y ago
> Uber has a global operations, is in multiple streams of business and has diversity across business lines and countries [...] If you invest in a gold company, do you want them hedging the price of gold? Some corporations function as diversified quasi-portfolios. But it's often far easier to analyze and model pure plays. Plenty of pure-play securities on public markets.
- autokad 8y ago
  by that logic, amazon should just be selling books to make it easy for investors to make 'pure plays'
  - kemitchell 8y ago
    I don't think public companies should be pure plays. But I don't think they should be portfolios, either. There's reason for both.
CPLX 8y ago
Maybe because you believe that the investment of yourself and others will be profitably used by the company, and you'll be able to share in those profits. An IPO isn't a bet, like at a racetrack, the money raised is actually used to further the business. It's quite possible this will give them the fuel for that expansion you mention.
- perl4ever 8y ago
  "An IPO isn't a bet, like at a racetrack, the money raised is actually used to further the business" Is it, or is it just used to pay back the early investors who want to exit?
akiselev 8y ago
The same reason you invest in anything else? You think you can make more money from it than the alternative within your investment timeframe. Uber's last private valuation was, what, $60 billion? How much ROI do you think the LPs in the last round want to see from that investment after a few years? That sets the lower boundary for Uber's IPO price so unless Uber does a down round (which wont bode well for investor confidence), they're going to have to deliver a hell of a lot more value for their share price than Lyft, which means their is a lot more risk attached to them than lyft. Buy low, sell high.
benj111 8y ago
Uber takes the flack, gets the law changed, creates the market. Lyft sails in and gets most of the benefits, without those costs. Uber doesn't have a massive moat. Drivers can have both apps, users can have both apps. You attract drivers by paying them more, you attract riders by charging them less. Uber for now can afford to beat everyone on both those fronts, but eventually they will have to start making a profit. When that happens Lyft is best placed to take advantage.
- stingrae 8y ago
  As a counter point, Lyft was first to create ride sharing. Internationally, Uber has driven the changes.
  - joeblau 8y ago
    Uber (Founded March 2009[1]) created ride sharing in SF before Lyft (Founded: June 2012[2]). Uber just started with commercially licensed Black Car drivers and Lyft started with anyone with a car and a drivers license. Then Uber moved down market with UberX and Lyft moved up market with Lux. [1] - https://en.wikipedia.org/wiki/Uber https://en.wikipedia.org/wiki/Uber [2] - https://en.wikipedia.org/wiki/Lyft https://en.wikipedia.org/wiki/Lyft
    - deepakhj 8y ago
      Zimride was founded in 2007.
    - jessriedel 8y ago
      I think this is just a matter of semantics. Are you saying we should call a black-car hailing service "ride sharing" simply because you booked it with a smart phone app rather than calling a number? (Remember that Uber didn't even use a novel business relationship; there have long been dispatchers with a single phone number that distribute the rides to multiple independent black car agencies.) To me, the key change deserving a new term was allowing completely independent, non-professional drivers, and I think Lyft beat Uber to that. (Heck, some purists would say "ride sharing" should be reserved for cases where the driver doesn't make an wages, just reimbursement for costs.)
harryf 8y ago
Because Lyft is going to be on every car makers purchase list like Daimler bought MyTaxi ( https://www.google.com/amp/s/www.techtimes.com/amp/articles/14820/20140904/daimler-acquires-ridescout-and-mytaxi-steps-on-the-pedal-of-ride-sharing.htm https://www.google.com/amp/s/www.techtimes.com/amp/articles/... )
- deleted 8y ago
  [deleted]
inverse_pi 8y ago
> Uber has a global operations, is in multiple streams of business and has diversity across business lines This can be a reason why one would be more interested in Lyft. Uber seems like a distracted player who's losing money on many other markets and businesses, not to mention hundreds of millions of dollars on self-driving cars (and flying cars?!). Lyft is much cheaper (15B valuation), while Uber is much more expensive (120B?). If I invest 1B in Uber, my money would vanish in 1 quarter (yes they're losing 1B/quarter). Those 1B dollars would be split to invest in flying cars, uber eats freight bike/scooter, battles in India Middle East. On the other hand, if I invest 1B in Lyft, I'm sure those 1B would go towards gaining market shares in the US which is by far the most important market for the two players. Second of all, personally I think if Lyft failed and the stock dropped by half. Some other dominant players would look to acquire Lyft. I'm thinking about Google's Waymo One plus Lyft's network. Apple seems to have a lot of cash to burn also, and they're also developing SDC. On the other hand, Uber's share price has to drop more than 10x in order for it to come close to a reasonable acquisition price.
- solaarphunk 8y ago
  Looks like from the article valuation is going to land between 20-30B.
- deleted 8y ago
  [deleted]
blairbeckwith 8y ago
Minor nitpick, but Lyft operates in Canada outside Toronto. At the very least, they're in Ottawa.
bradleybuda 8y ago
In addition to what others have mentioned, likely a lower valuation, hopefully enough to balance out the higher risk.
deleted 8y ago
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gnopgnip 8y ago
Uber is not a public company, so there isn't much alternative for investment in this space. Lyft has more room to grow and expand to profitable markets
abrowne 8y ago
Lyft recently acquired Motivate, the bike share company. I know they run the NYC bike share and now the Minneapolis one.
- selectodude 8y ago
  And Chicago's.
gammateam 8y ago
Room to grow for all of the reasons you mentioned? Alongside different/better governance and perception Also revenue. They has it. I can more easily see how a public market shareholder would make money in a lyft holding, than in an uner holding. This isnt about getting married to a stock and putting the share certificate in a frame, this is about growth and potential addressable market, which is easier to see.
ThrustVectoring 8y ago
If you're bullish on ride hailing apps and bearish on Uber in particular, that gets you there. Plus there's generic diversification arguments - most returns come from a few companies that do really well, so you need to "buy the haystack" to ensure you own the needle.
chrstphrhrt 8y ago
As a customer experience I prefer Lyft because they let me give tips. I doin't think Uber drivers make a living wage, so I like trying to figure out what can be added to offset the low base/fees so the drivers can do okay.
- dangoor 8y ago
  Uber lets you tip now.
- paxys 8y ago
  Uber has supported tipping for a while now.
  - chrstphrhrt 8y ago
    Awesome! Sorry out of the loop since only use them when visiting the states. Vancouver is so backwards :(
- teen 8y ago
  uber added this like 2 years ago
- deleted 8y ago
  [deleted]
- parthdesai 8y ago
  Tbh i preferred Uber exactly because of no option to tip, but like other people have pointed it out, you can tip in Uber.
  - PhasmaFelis 8y ago
    > Tbh i preferred Uber exactly because of no option to tip Why? If you're not concerned about the driver's pay, you shouldn't be concerned that they might feel stiffed.
    - parthdesai 8y ago
matchagaucho 8y ago
Retail Investors want to participate in the "transportation logistics market". Lyft is the first of many. It's not zero-sum, given every car on the road can potentially be replaced by freelance drivers moving people and goods.
jlebar 8y ago
If Lyft were valued the same as Uber, then I'd readily agree. But it's not (necessarily), right? Is there no price at which Lyft stock would be a good investment relative to Uber?
hunter23 8y ago
I can guess few of their story points (hard to know until they release their numbers): 1) The market can support multiple players running profitable (i.e it's a 2 player or 3 player market). Think of the drugstore industry (Walgreens & CVS). 2) Lyft focuses on profitable higher income markets like the US and Canada so they can have a higher margin and not get into pricing wars with massive foreign players (Didi, Oola, etc.). Uber is bleeding cash in their foreign markets. 3) Lyfts valuation is more reasonable relative to their numbers than Uber's. At the end of the day your investment thesis should not be just on the company but also the price you are buying at. 4) Lyft could manage their costs better and hence be closer to profitability to Uber (this is a pure guess but seems possible) I have been pretty successful investing in 2nd players when they are priced correctly.
- reaperducer 8y ago
  2) Lyft focuses on profitable higher income markets like the US and Canada so they can have a higher margin and not get into pricing wars This, I think, is more important than many people realize. When I was driving for Uber and Lyft (for about eight months, two years ago), Lyft had an entirely different clientele. Uber was for the poors, the frat boys, and the average Joe Lunchbucket. Lyft was a decidedly better class of passenger, paid more per mile, the people tipped more and more often, and the passengers were 953% less likely to throw up in your car. Drivers on their way to an Uber pickup would drop the fare if a Lyft opportunity came in. Lyft doesn't capitalize on this perception that it is "better" than Uber, but my sense of the situation from talking to dozens of drivers and hundreds of passengers is that both the drivers and the passengers knew it. Lyft could really differentiate itself in the market, if it decided to go this route (so to speak). The same way that Apple positions itself as a premium brand.
  - Scoundreller 8y ago
    Any idea what drives Lyft riders to be better behaved? Is Lyft more expensive in your locale? I’m in a new Lyft market, so their pricing makes them the cheapest with their discounts often.
ktamura 8y ago
If you are long US and/or the logistics portion of on-demand, digitally assisted marketplace economy, it's not a bad idea. For example, it's impossible to invest in just AWS without AMZN's other business. However, AWS is far less susceptible to the current macro geopolitical instability than AMZN's retail business.
marcosdumay 8y ago
Why investing in any company? Because you expect them to use your money to increase its total earnings so they'll gladly pay back (on dividends or stock evaluation) more than you paid to them.
bparsons 8y ago
Lyft exists in the regulatory slipstream of Uber. It can focus on profitable markets, and leave it up to Uber to fight City Hall and spend the money habituating new regions to the idea of ride sharing. From a user point of view, the product is indistinguishable from Uber. If I had to own shares in one company, it would probably be Lyft.
toast0 8y ago
Taxis doesn't seem like a business where there are economies of scale from having a larger global footprint. Uber may have a small advantage in software costs, but labor and equipment must be the largest costs, and the labor is bringing the equipment for the most part; Uber may be able to do better on leases than Lyft, but I'm not sure how much of their earnings are coming from that.
snowwrestler 8y ago
How would you suggest I invest in Uber today? The most obvious reason to invest in the Lyft IPO instead of the Uber IPO is that there is no Uber IPO. If you're asking whether Lyft and Uber can achieve simultaneous financial success, the answer is yes.
seanmcdirmid 8y ago
Uber's international focus hasn't been entirely successful, and I guess its more of a money drain as well. Why Lyft is ready for an IPO before Uber could have to do with them focusing on making US market profitable instead. Uber has a much steeper hill to climb (even if the summit is higher).
paulie_a 8y ago
For Lyft: gps and pool directions actually work. Uber fails hard in that category. Uber drivers rarely use the built-in system.
atombender 8y ago
Uber is a private company. So most people can't actually invest in Uber.
rhizome 8y ago
They are more susceptible to economic conditions in a single country Taking Lyft to be a single-purpose undiversified company, isn't the opposite true? I'm no economist nor MBA, but aside from cashflow wouldn't a smaller company be more resilient to conditions due to lower resource demands? every point of marketshare they get is a zero-sum game against Uber Is this...true? First, because there's more than two players in the industry, and second because there can be more demand than cars among all of them.
- kochikame 8y ago
  Regarding your first point, the idea is that if the US economy tanked or crashed Lyft would be utterly screwed but Uber might be able to ride (haha) it out with revenue from its non-US markets. In reality, if anything that bad happened to the US the rest of the developed is most likely screwed too, but that's the concept. As for your second point, you might be right. It's not EVERY point of market share, but it must still be a significant number that is wrested from Uber with great difficulty.
  - rhizome 8y ago
    but Uber might be able to ride (haha) it out with revenue from its non-US markets Does Uber operate in any markets that wouldn't be catastrophically affected by a crash of the US economy?
novia 8y ago
Buy Lyft now, profit later when Uber buys them out.
djyaz1200 8y ago
"From a purely investment point of view, why would anyone invest in Lyft over Uber?" In a word... price. Lyft's IPO will give public markets access to a rapidly growing industry at a lower valuation than Uber. Post IPO I would guess being publicly traded would be an advantage for Lyft because they will have a broader base of stakeholders who benefit from their success.
pmart123 8y ago
Southwest Airlines for a long time just focused on point-to-point flights, avoiding money-losing flight patterns that routed passengers through a Chicago to New York type connection. Additionally, SWA only maintained 737's, and free checked baggage allowed for faster onboarding and deplaning, and therefore, faster turnaround times. Eventually, this little airline became the largest airline after the major airlines botched their oil hedging, customer service, etc. From an outsiders view, Lyft looks much more operationally focused. Instead of legally battling a bunch of different countries, it eyes only the biggest market, allowing it to slowly expand after it sees how Uber fares in each country. Instead of settling a lawsuit over allegedly stealing self-driving car technology, it is focusing on its core product. Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition. At some point, investors might not hand over Uber any more cash. Meanwhile, Lyft could get to profitability more quickly while Uber deals with acquisition/project "hell" as Elon would say. As an outsider looking in, Lyft looks like it is playing the long game, drafting behind Uber until Uber catches another edge and slips.
- jazzkingrt 8y ago
  What a great example! I'm realizing that perhaps the "second mover advantage" may be more pronounced in markets with low switching costs. Flyers can easily compare airline prices against one another, and drivers are incentivized to boot up 2nd, 3rd and 4th driving apps. Low-margin businesses can't afford to spend as much on R&D, make mistakes, etc. They have to win with small executional advantages.
  - calvinbhai 8y ago
    IIRC, Lyft was the first mover, Uber shamelessly ripped off Lyft's model that anyone can be a driver and come out with Uber X. So, imo Lyft was the first mover, but was smart to let Uber face all the heat sacrificing short term growth for long term success. Uber has been in too many things for me to believe that they can sustain the business (I may be wrong)
    - degenerate 8y ago
rbreve 8y ago
The have still room to grow, diversification also.
ChuckMcM 8y ago
They have better focus
jiveturkey 8y ago
> every point of marketshare they get is a zero-sum game against Uber well, marketshare (a percent value) is by definition a zero-sum metric. however, what you mean to say, that every new customer of lyft is a customer less for uber, is false. there is no network effect, like social networks or marketplaces. new customers for uber may also be customers of lyft, and in a true rising tide, and one company may prime the market for the other. Anyway, as the smaller player, given the lack of rider network effect and the clearly established lack of driver loyalty, they could quite easily see much faster growth. (going from 1->2 is much more significant that 100->110, eg). And growth rate, not absolute market value, is what investors really care about.
tathougies 8y ago
Uber makes countries hate them and countries and cities are free to kick Uber or any business out. Lyft respects laws and so is less subject to legal risk.
habosa 8y ago
Carl Icahn gives his rationale: https://www.theguardian.com/technology/2015/may/15/billionaire-carl-icahn-invests-100m-lyft-a-no-brainer https://www.theguardian.com/technology/2015/may/15/billionai... Basically if you believe that ride hailing apps will succeed as a sector and that there is room for two companies in the long-term, then Lyft gives you a much better "value" investment in terms of the ratio of the company's valuation to the number of customers or dollars of revenue.
a13n 8y ago
I have the opposite opinion. Why would anyone invest in Uber over Lyft? Uber has a brand people hate, and is losing market share to Lyft. They have room to shrink. Meanwhile, Lyft has a brand people love, is taking market share from Uber, and is starting to expand internationally (Canada). They have room to grow.
mathattack 8y ago
Every investment is about price. You may get a better price (relative to sales, or whatever) for Lyft. They may have less of other risks too.
bytematic 8y ago
Doesn't have to be 1 company making all the money. Apart from that, most drivers use both apps
ashelmire 8y ago
Right because... each 100 billion value market only has room for one player? Seriously, this attitude is absurd. Competitors exist, and they sometimes do things better.
pbreit 8y ago
Lyft has huge upside, Uber has none.
- Cursuviam 8y ago
  "Jefferson has beliefs, Burr has none." (From Hamilton)

empath75 8y ago

Why would anyone invest in Pepsi over Coca-Cola? Why invest in Apple over Microsoft? Why invest in Tesla over GM? There can be more than one successful company in a segment. Also, well, you can't invest in Uber.

jonthepirate 8y ago
Former Lyft eng here of 2.5 yrs.. Lyft is kicking major a. Don't mean to hype it. Even if they weren't IPO'ing I can tell you they are firing on all pistons. I'm pretty sure the financials are in good shape too. Haven't worked there in 2 years though. Fingers crossed.
- samstave 8y ago
  Were you able to keep options?

bagacrap 8y ago

Even if you invest purely cynically you might reasonably believe that Uber's toxic culture will eventually catch up with them.

squish78 8y ago
How would you see that playing out?
mikekij 8y ago
This. Why would anyone invest in Apple in 1998 instead of Microsoft?
- Judgmentality 8y ago
  Because of the new CEO Steve Jobs?
  - mikekij 8y ago
    Fair, but you could say it's rational to choose to invest in Lyft over Uber due to Uber's new CEO.
- perl4ever 8y ago
  I am not sure if you meant that the other way around. In 1998, Microsoft was the larger company, with the more evil reputation, which seems to parallel Uber.

jartelt 8y ago

Lower price than Uber, potential for growth if they move outside the US, belief that ride share markets are not a zero-sum game and that two companies can more or less split the market...

wolco 8y ago

Buy low = no story Sell high = pr firm creates digestable story masses flock The story is simple. The second largest ride sharing company. Underdog against evil Uber. Could become number 1 or could grow the market.

PhrosTT 8y ago

They hypothetically treat drivers better and have better relationships with them.

yhoiseth 8y ago

I agree that some things make Lyft seem more risky than Uber. But to investors, risky bets can be good if they have opportunities to diversify.

kemitchell 8y ago

> Uber has a global operations, is in multiple streams of business and has diversity across business lines and countries [...] If you invest in a gold company, do you want them hedging the price of gold? Some corporations function as diversified quasi-portfolios. But it's often far easier to analyze and model pure plays. Plenty of pure-play securities on public markets.

autokad 8y ago
by that logic, amazon should just be selling books to make it easy for investors to make 'pure plays'
- kemitchell 8y ago
  I don't think public companies should be pure plays. But I don't think they should be portfolios, either. There's reason for both.

CPLX 8y ago

Maybe because you believe that the investment of yourself and others will be profitably used by the company, and you'll be able to share in those profits. An IPO isn't a bet, like at a racetrack, the money raised is actually used to further the business. It's quite possible this will give them the fuel for that expansion you mention.

perl4ever 8y ago
"An IPO isn't a bet, like at a racetrack, the money raised is actually used to further the business" Is it, or is it just used to pay back the early investors who want to exit?

akiselev 8y ago

The same reason you invest in anything else? You think you can make more money from it than the alternative within your investment timeframe. Uber's last private valuation was, what, $60 billion? How much ROI do you think the LPs in the last round want to see from that investment after a few years? That sets the lower boundary for Uber's IPO price so unless Uber does a down round (which wont bode well for investor confidence), they're going to have to deliver a hell of a lot more value for their share price than Lyft, which means their is a lot more risk attached to them than lyft. Buy low, sell high.

benj111 8y ago

Uber takes the flack, gets the law changed, creates the market. Lyft sails in and gets most of the benefits, without those costs. Uber doesn't have a massive moat. Drivers can have both apps, users can have both apps. You attract drivers by paying them more, you attract riders by charging them less. Uber for now can afford to beat everyone on both those fronts, but eventually they will have to start making a profit. When that happens Lyft is best placed to take advantage.

stingrae 8y ago
As a counter point, Lyft was first to create ride sharing. Internationally, Uber has driven the changes.
- joeblau 8y ago
  Uber (Founded March 2009[1]) created ride sharing in SF before Lyft (Founded: June 2012[2]). Uber just started with commercially licensed Black Car drivers and Lyft started with anyone with a car and a drivers license. Then Uber moved down market with UberX and Lyft moved up market with Lux. [1] - https://en.wikipedia.org/wiki/Uber https://en.wikipedia.org/wiki/Uber [2] - https://en.wikipedia.org/wiki/Lyft https://en.wikipedia.org/wiki/Lyft
  - deepakhj 8y ago
    Zimride was founded in 2007.
  - jessriedel 8y ago
    I think this is just a matter of semantics. Are you saying we should call a black-car hailing service "ride sharing" simply because you booked it with a smart phone app rather than calling a number? (Remember that Uber didn't even use a novel business relationship; there have long been dispatchers with a single phone number that distribute the rides to multiple independent black car agencies.) To me, the key change deserving a new term was allowing completely independent, non-professional drivers, and I think Lyft beat Uber to that. (Heck, some purists would say "ride sharing" should be reserved for cases where the driver doesn't make an wages, just reimbursement for costs.)

harryf 8y ago

Because Lyft is going to be on every car makers purchase list like Daimler bought MyTaxi ( https://www.google.com/amp/s/www.techtimes.com/amp/articles/14820/20140904/daimler-acquires-ridescout-and-mytaxi-steps-on-the-pedal-of-ride-sharing.htm https://www.google.com/amp/s/www.techtimes.com/amp/articles/... )

deleted 8y ago
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inverse_pi 8y ago

> Uber has a global operations, is in multiple streams of business and has diversity across business lines This can be a reason why one would be more interested in Lyft. Uber seems like a distracted player who's losing money on many other markets and businesses, not to mention hundreds of millions of dollars on self-driving cars (and flying cars?!). Lyft is much cheaper (15B valuation), while Uber is much more expensive (120B?). If I invest 1B in Uber, my money would vanish in 1 quarter (yes they're losing 1B/quarter). Those 1B dollars would be split to invest in flying cars, uber eats freight bike/scooter, battles in India Middle East. On the other hand, if I invest 1B in Lyft, I'm sure those 1B would go towards gaining market shares in the US which is by far the most important market for the two players. Second of all, personally I think if Lyft failed and the stock dropped by half. Some other dominant players would look to acquire Lyft. I'm thinking about Google's Waymo One plus Lyft's network. Apple seems to have a lot of cash to burn also, and they're also developing SDC. On the other hand, Uber's share price has to drop more than 10x in order for it to come close to a reasonable acquisition price.

solaarphunk 8y ago
Looks like from the article valuation is going to land between 20-30B.
deleted 8y ago
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blairbeckwith 8y ago

Minor nitpick, but Lyft operates in Canada outside Toronto. At the very least, they're in Ottawa.

bradleybuda 8y ago

In addition to what others have mentioned, likely a lower valuation, hopefully enough to balance out the higher risk.

deleted 8y ago

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gnopgnip 8y ago

Uber is not a public company, so there isn't much alternative for investment in this space. Lyft has more room to grow and expand to profitable markets

abrowne 8y ago

Lyft recently acquired Motivate, the bike share company. I know they run the NYC bike share and now the Minneapolis one.

selectodude 8y ago
And Chicago's.

gammateam 8y ago

Room to grow for all of the reasons you mentioned? Alongside different/better governance and perception Also revenue. They has it. I can more easily see how a public market shareholder would make money in a lyft holding, than in an uner holding. This isnt about getting married to a stock and putting the share certificate in a frame, this is about growth and potential addressable market, which is easier to see.

ThrustVectoring 8y ago

If you're bullish on ride hailing apps and bearish on Uber in particular, that gets you there. Plus there's generic diversification arguments - most returns come from a few companies that do really well, so you need to "buy the haystack" to ensure you own the needle.

chrstphrhrt 8y ago

As a customer experience I prefer Lyft because they let me give tips. I doin't think Uber drivers make a living wage, so I like trying to figure out what can be added to offset the low base/fees so the drivers can do okay.

dangoor 8y ago
Uber lets you tip now.
paxys 8y ago
Uber has supported tipping for a while now.
- chrstphrhrt 8y ago
  Awesome! Sorry out of the loop since only use them when visiting the states. Vancouver is so backwards :(
teen 8y ago
uber added this like 2 years ago
deleted 8y ago
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parthdesai 8y ago
Tbh i preferred Uber exactly because of no option to tip, but like other people have pointed it out, you can tip in Uber.
- PhasmaFelis 8y ago
  > Tbh i preferred Uber exactly because of no option to tip Why? If you're not concerned about the driver's pay, you shouldn't be concerned that they might feel stiffed.
  - parthdesai 8y ago

matchagaucho 8y ago

Retail Investors want to participate in the "transportation logistics market". Lyft is the first of many. It's not zero-sum, given every car on the road can potentially be replaced by freelance drivers moving people and goods.

jlebar 8y ago

If Lyft were valued the same as Uber, then I'd readily agree. But it's not (necessarily), right? Is there no price at which Lyft stock would be a good investment relative to Uber?

hunter23 8y ago

I can guess few of their story points (hard to know until they release their numbers): 1) The market can support multiple players running profitable (i.e it's a 2 player or 3 player market). Think of the drugstore industry (Walgreens & CVS). 2) Lyft focuses on profitable higher income markets like the US and Canada so they can have a higher margin and not get into pricing wars with massive foreign players (Didi, Oola, etc.). Uber is bleeding cash in their foreign markets. 3) Lyfts valuation is more reasonable relative to their numbers than Uber's. At the end of the day your investment thesis should not be just on the company but also the price you are buying at. 4) Lyft could manage their costs better and hence be closer to profitability to Uber (this is a pure guess but seems possible) I have been pretty successful investing in 2nd players when they are priced correctly.

reaperducer 8y ago
2) Lyft focuses on profitable higher income markets like the US and Canada so they can have a higher margin and not get into pricing wars This, I think, is more important than many people realize. When I was driving for Uber and Lyft (for about eight months, two years ago), Lyft had an entirely different clientele. Uber was for the poors, the frat boys, and the average Joe Lunchbucket. Lyft was a decidedly better class of passenger, paid more per mile, the people tipped more and more often, and the passengers were 953% less likely to throw up in your car. Drivers on their way to an Uber pickup would drop the fare if a Lyft opportunity came in. Lyft doesn't capitalize on this perception that it is "better" than Uber, but my sense of the situation from talking to dozens of drivers and hundreds of passengers is that both the drivers and the passengers knew it. Lyft could really differentiate itself in the market, if it decided to go this route (so to speak). The same way that Apple positions itself as a premium brand.
- Scoundreller 8y ago
  Any idea what drives Lyft riders to be better behaved? Is Lyft more expensive in your locale? I’m in a new Lyft market, so their pricing makes them the cheapest with their discounts often.

ktamura 8y ago

If you are long US and/or the logistics portion of on-demand, digitally assisted marketplace economy, it's not a bad idea. For example, it's impossible to invest in just AWS without AMZN's other business. However, AWS is far less susceptible to the current macro geopolitical instability than AMZN's retail business.

marcosdumay 8y ago

Why investing in any company? Because you expect them to use your money to increase its total earnings so they'll gladly pay back (on dividends or stock evaluation) more than you paid to them.

bparsons 8y ago

Lyft exists in the regulatory slipstream of Uber. It can focus on profitable markets, and leave it up to Uber to fight City Hall and spend the money habituating new regions to the idea of ride sharing. From a user point of view, the product is indistinguishable from Uber. If I had to own shares in one company, it would probably be Lyft.

toast0 8y ago

Taxis doesn't seem like a business where there are economies of scale from having a larger global footprint. Uber may have a small advantage in software costs, but labor and equipment must be the largest costs, and the labor is bringing the equipment for the most part; Uber may be able to do better on leases than Lyft, but I'm not sure how much of their earnings are coming from that.

snowwrestler 8y ago

How would you suggest I invest in Uber today? The most obvious reason to invest in the Lyft IPO instead of the Uber IPO is that there is no Uber IPO. If you're asking whether Lyft and Uber can achieve simultaneous financial success, the answer is yes.

seanmcdirmid 8y ago

Uber's international focus hasn't been entirely successful, and I guess its more of a money drain as well. Why Lyft is ready for an IPO before Uber could have to do with them focusing on making US market profitable instead. Uber has a much steeper hill to climb (even if the summit is higher).

paulie_a 8y ago

For Lyft: gps and pool directions actually work. Uber fails hard in that category. Uber drivers rarely use the built-in system.

atombender 8y ago

Uber is a private company. So most people can't actually invest in Uber.

rhizome 8y ago

They are more susceptible to economic conditions in a single country Taking Lyft to be a single-purpose undiversified company, isn't the opposite true? I'm no economist nor MBA, but aside from cashflow wouldn't a smaller company be more resilient to conditions due to lower resource demands? every point of marketshare they get is a zero-sum game against Uber Is this...true? First, because there's more than two players in the industry, and second because there can be more demand than cars among all of them.

kochikame 8y ago
Regarding your first point, the idea is that if the US economy tanked or crashed Lyft would be utterly screwed but Uber might be able to ride (haha) it out with revenue from its non-US markets. In reality, if anything that bad happened to the US the rest of the developed is most likely screwed too, but that's the concept. As for your second point, you might be right. It's not EVERY point of market share, but it must still be a significant number that is wrested from Uber with great difficulty.
- rhizome 8y ago
  but Uber might be able to ride (haha) it out with revenue from its non-US markets Does Uber operate in any markets that wouldn't be catastrophically affected by a crash of the US economy?

novia 8y ago

Buy Lyft now, profit later when Uber buys them out.

djyaz1200 8y ago

"From a purely investment point of view, why would anyone invest in Lyft over Uber?" In a word... price. Lyft's IPO will give public markets access to a rapidly growing industry at a lower valuation than Uber. Post IPO I would guess being publicly traded would be an advantage for Lyft because they will have a broader base of stakeholders who benefit from their success.

pmart123 8y ago

Southwest Airlines for a long time just focused on point-to-point flights, avoiding money-losing flight patterns that routed passengers through a Chicago to New York type connection. Additionally, SWA only maintained 737's, and free checked baggage allowed for faster onboarding and deplaning, and therefore, faster turnaround times. Eventually, this little airline became the largest airline after the major airlines botched their oil hedging, customer service, etc. From an outsiders view, Lyft looks much more operationally focused. Instead of legally battling a bunch of different countries, it eyes only the biggest market, allowing it to slowly expand after it sees how Uber fares in each country. Instead of settling a lawsuit over allegedly stealing self-driving car technology, it is focusing on its core product. Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition. At some point, investors might not hand over Uber any more cash. Meanwhile, Lyft could get to profitability more quickly while Uber deals with acquisition/project "hell" as Elon would say. As an outsider looking in, Lyft looks like it is playing the long game, drafting behind Uber until Uber catches another edge and slips.

jazzkingrt 8y ago
What a great example! I'm realizing that perhaps the "second mover advantage" may be more pronounced in markets with low switching costs. Flyers can easily compare airline prices against one another, and drivers are incentivized to boot up 2nd, 3rd and 4th driving apps. Low-margin businesses can't afford to spend as much on R&D, make mistakes, etc. They have to win with small executional advantages.
- calvinbhai 8y ago
  IIRC, Lyft was the first mover, Uber shamelessly ripped off Lyft's model that anyone can be a driver and come out with Uber X. So, imo Lyft was the first mover, but was smart to let Uber face all the heat sacrificing short term growth for long term success. Uber has been in too many things for me to believe that they can sustain the business (I may be wrong)
  - degenerate 8y ago

rbreve 8y ago

The have still room to grow, diversification also.

ChuckMcM 8y ago

They have better focus

jiveturkey 8y ago

> every point of marketshare they get is a zero-sum game against Uber well, marketshare (a percent value) is by definition a zero-sum metric. however, what you mean to say, that every new customer of lyft is a customer less for uber, is false. there is no network effect, like social networks or marketplaces. new customers for uber may also be customers of lyft, and in a true rising tide, and one company may prime the market for the other. Anyway, as the smaller player, given the lack of rider network effect and the clearly established lack of driver loyalty, they could quite easily see much faster growth. (going from 1->2 is much more significant that 100->110, eg). And growth rate, not absolute market value, is what investors really care about.

tathougies 8y ago

Uber makes countries hate them and countries and cities are free to kick Uber or any business out. Lyft respects laws and so is less subject to legal risk.

habosa 8y ago

Carl Icahn gives his rationale: https://www.theguardian.com/technology/2015/may/15/billionaire-carl-icahn-invests-100m-lyft-a-no-brainer https://www.theguardian.com/technology/2015/may/15/billionai... Basically if you believe that ride hailing apps will succeed as a sector and that there is room for two companies in the long-term, then Lyft gives you a much better "value" investment in terms of the ratio of the company's valuation to the number of customers or dollars of revenue.

a13n 8y ago

I have the opposite opinion. Why would anyone invest in Uber over Lyft? Uber has a brand people hate, and is losing market share to Lyft. They have room to shrink. Meanwhile, Lyft has a brand people love, is taking market share from Uber, and is starting to expand internationally (Canada). They have room to grow.

mathattack 8y ago

Every investment is about price. You may get a better price (relative to sales, or whatever) for Lyft. They may have less of other risks too.

bytematic 8y ago

Doesn't have to be 1 company making all the money. Apart from that, most drivers use both apps

ashelmire 8y ago

Right because... each 100 billion value market only has room for one player? Seriously, this attitude is absurd. Competitors exist, and they sometimes do things better.

pbreit 8y ago

Lyft has huge upside, Uber has none.

Cursuviam 8y ago
"Jefferson has beliefs, Burr has none." (From Hamilton)