4 ms·
All of this talk sound surprising similar to airlines. - LCCs (Low Cost Carriers can come in and disrupt your fragile net profit, if you get close to it in a q
by aiisjustanif 8y ago
All of this talk sound surprising similar to airlines.
- LCCs (Low Cost Carriers can come in and disrupt your fragile net profit, if you get close to it in a quarter)
- Always pretty much operating in the negative.
- Consumers find a lot value in the company even though the operating cost are insane.
- The only way to solve the issue of airlines being in debt for years was time to slowly cut operation cost and scale, massive scale (albeit, there are a couple exceptions today now).
- Local market competition in cities are hell to forecast and balance out operating cost to how profitable you can be vs competitors. Which create cities you grow dominant and via reputation and government policies.
- They piss off investors because they have to trade off and invest in the operating cost (fleet or employees) some years, which can effect the companies earning for years.
I get they the rideshare industry is vastly different than the airline industry in many ways (for example, oil price influencing one more than the other), but I think they are similar in important ways.
Uber and Lyft will have to start taking out pages from LCCs in Europe to get ideas on how to become profitable (and probably piss off customers by nickel and diming them) and any ideas they haven't from the taxi industry that they may have over looked. Hell maybe even adapt into the rental space. I don't know the answers, but just sounds like an industry I've seen before that will have to move mountains to been profitable.
Sidenote: I will not be surprised just like American, Delta, and United that Lyft and Uber will soon see government sponsored competition (China, Russia, Middle East countries) in future and be pissed because of how unfair they are because they can operate in the negative without consequences of failing.