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Uber and Lyft can be profitable today. They are in their most mature markets like SF and NYC. If they need to get to profitability they scale back and cut certa

Uber and Lyft can be profitable today. They are in their most mature markets like SF and NYC. If they need to get to profitability they scale back and cut certain cities. That’s it.

tomnipotent 8y ago
Which would mean eliminating upwards of 90% of their workforce. Thus not sustainable, and the jobs disappear.
- dawhizkid 8y ago
  You’re conflating profitability, growth, sustainability etc. you’re also conflating what is bad for Uber vs what is bad for drivers It is sustainable to do that if by sustainable you mean have a profitable long term business that is cash flow positive It would likely massively hurt share prices because you’re trading growth for profitability
  - tomnipotent 8y ago
    I'm not conflating anything, you're just mixing subjects. You said that gig jobs would get better or there would be more, and I countered that was not the case since a business cannot sustain that number of people if it's not profitable.
    - dawhizkid 8y ago
      I don’t think you understand how Uber/Lyft think about their drivers. They aren’t employees. In fact, drivers are their customers. There’s no “sustaining” drivers because they aren’t paying their drivers anything...they are just making a commission off of the driver’s own earnings. Uber and Lyft can’t and won’t “fire” drivers since, again, they aren’t employees. The best way to think of drivers is that they are customers who are licensing Uber/Lyft software for lead generation for their own business. In a recession a seller of lead generation software (Uber/Lyft) is not going to turn customers (drivers) away. It just might not be profitable for you as a customer of lead generation software to buy it if there aren’t leads, but I don’t think anyone knows what will really happen to rideshare demand if the economy tanks. I think it will go down, but it might not go down as much as one might think.
      - deleted 8y ago
        [deleted]
- treis 8y ago
  It's not sustainable for the employees but it probably would be good for the business. Looking at Lyft's careers page, I see 7 UX, 11 product, 14 data science, and 40 engineering positions open. That just seems like an absurd amount.
12298765 8y ago
The whole point was that the jobs would disappear -- if Uber and Lyft back out of smaller cities to be profitable, all of those jobs are gone, which is exactly the point of the person you replied to. Most of those gig jobs would start disappearing
- dawhizkid 8y ago
  There's no "backing out" if we're talking about individual cities in a country they already operate in (save a few edge cases). That isn't really how Uber/Lyft enter/exit markets. They will just not pay driver incentives for new markets, which is usually the lighter fire for incentivizing new supply (i.e. drivers) to start driving. There's no job to be "lost." They aren't going to turn you away for a "job" or "fire" you because you literally aren't employed by the company. Think of it as if you are licensing Uber/Lyft software to generate leads for your own business. That is literally how they think about it and what the driver ToS says.
  - b_tterc_p 8y ago
    That’s true, there’s no real reason to “leave” a city. But if they need to stop bleeding cash in an expensive city, they’ll need to raise prices during a hurting economy. Doing this at scale is going to severely dent their ability to cover fixed costs long term.
moorhosj 8y ago
Now we see those cities starting to price in the negative externalities of these businesses. The congestion pricing in NYC is directly tied to the rise in ride sharing. This could change the economics even (especially?) in the profitable cities.
- Jommi 8y ago
  It's ridehailing, ride-sharing is completely different. Ride-sharing REDUCES congestion. Ridehailing increases congestion if the city's public transport system is terrible. This is not a fault of ridehailing, it's a symptom of bad infra.
Marazan 8y ago
I see this repeated as an article of faith but how profitable? Uber is billions in the hole. If they make a billion in profit every year for 15 years then they will have repaid their investors money at nominal rates. In real terms they will still be down. How much profit can Uber make if it cuts 'certain' cities?

Uber and Lyft can be profitable today. They are in their most mature markets like SF and NYC. If they need to get to profitability they scale back and cut certain cities. That’s it.

tomnipotent 8y ago

Which would mean eliminating upwards of 90% of their workforce. Thus not sustainable, and the jobs disappear.

dawhizkid 8y ago
You’re conflating profitability, growth, sustainability etc. you’re also conflating what is bad for Uber vs what is bad for drivers It is sustainable to do that if by sustainable you mean have a profitable long term business that is cash flow positive It would likely massively hurt share prices because you’re trading growth for profitability
- tomnipotent 8y ago
  I'm not conflating anything, you're just mixing subjects. You said that gig jobs would get better or there would be more, and I countered that was not the case since a business cannot sustain that number of people if it's not profitable.
  - dawhizkid 8y ago
    I don’t think you understand how Uber/Lyft think about their drivers. They aren’t employees. In fact, drivers are their customers. There’s no “sustaining” drivers because they aren’t paying their drivers anything...they are just making a commission off of the driver’s own earnings. Uber and Lyft can’t and won’t “fire” drivers since, again, they aren’t employees. The best way to think of drivers is that they are customers who are licensing Uber/Lyft software for lead generation for their own business. In a recession a seller of lead generation software (Uber/Lyft) is not going to turn customers (drivers) away. It just might not be profitable for you as a customer of lead generation software to buy it if there aren’t leads, but I don’t think anyone knows what will really happen to rideshare demand if the economy tanks. I think it will go down, but it might not go down as much as one might think.
    - deleted 8y ago
      [deleted]
treis 8y ago
It's not sustainable for the employees but it probably would be good for the business. Looking at Lyft's careers page, I see 7 UX, 11 product, 14 data science, and 40 engineering positions open. That just seems like an absurd amount.

12298765 8y ago

The whole point was that the jobs would disappear -- if Uber and Lyft back out of smaller cities to be profitable, all of those jobs are gone, which is exactly the point of the person you replied to. Most of those gig jobs would start disappearing

dawhizkid 8y ago
There's no "backing out" if we're talking about individual cities in a country they already operate in (save a few edge cases). That isn't really how Uber/Lyft enter/exit markets. They will just not pay driver incentives for new markets, which is usually the lighter fire for incentivizing new supply (i.e. drivers) to start driving. There's no job to be "lost." They aren't going to turn you away for a "job" or "fire" you because you literally aren't employed by the company. Think of it as if you are licensing Uber/Lyft software to generate leads for your own business. That is literally how they think about it and what the driver ToS says.
- b_tterc_p 8y ago
  That’s true, there’s no real reason to “leave” a city. But if they need to stop bleeding cash in an expensive city, they’ll need to raise prices during a hurting economy. Doing this at scale is going to severely dent their ability to cover fixed costs long term.

moorhosj 8y ago

Now we see those cities starting to price in the negative externalities of these businesses. The congestion pricing in NYC is directly tied to the rise in ride sharing. This could change the economics even (especially?) in the profitable cities.

Jommi 8y ago
It's ridehailing, ride-sharing is completely different. Ride-sharing REDUCES congestion. Ridehailing increases congestion if the city's public transport system is terrible. This is not a fault of ridehailing, it's a symptom of bad infra.

Marazan 8y ago

I see this repeated as an article of faith but how profitable? Uber is billions in the hole. If they make a billion in profit every year for 15 years then they will have repaid their investors money at nominal rates. In real terms they will still be down. How much profit can Uber make if it cuts 'certain' cities?