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Lyft vs. Uber: A Tale of Two S-1’s
- judge2020 8y agoThey both got the stock ticker that matches the company name, but could that be a bad thing? eg. If you google "lyft" it brings up the company and an Ad to drive for lyft, so to see the stock price (in G) you have to type "nasdaq:lyft".
- booleandilemma 8y agoI’d say overall it’s a good thing, because you can say the ticker and people will know what company you’re talking about. Try that with Boeing, Intel, or Starbucks. Who cares what Google shows.
- hawaiianbrah 8y agoor you google “lyft stock”?
- dyarosla 8y agoOr just ‘lyft stock’
- asaph 8y agoIt's a neutral thing. Someone who is actually interested in investing will put in that minimal extra effort to find what they're looking for.
- deleted 8y ago[deleted]
- tedsanders 8y agoThese 'per driver' stats are not worth comparing when one company operates globally and the other operates in US+Canada. Nothing can really be concluded from them.
- cavisne 8y agoThe non US markets would be expected to mostly drag down Uber's numbers though, for the most part they are significantly better. Its surprising that Uber didnt at least break out US vs non-US markets, maybe the story isnt really that good.
- raiyu 8y agoLooks like Uber is better on every metric, total volume, growth, revenue, the only area they are behind is margin where they are taking less from their drivers than Lyft is. While Uber looks healthier especially given it's size, Lyft's reception after the IPO was quite negative, with the stock falling 30% immediately in the days that followed. Even with better economics and larger scale the larger question looms, which is how do these businesses turn profitable. Are they subsidizing a market and creating it by charging less, or will they reach a certain scale and be able to cut back on certain expenses which will give them profitability. I don't think Amazon is a fair comparison here, because they were investing in infrastructure, building out global logistics, which is different from Uber and Lyft. They should be much more profitable because they don't have to invest in that. They don't know warehouses and logistics, and everything else that e-commerce required. Also in the case of Amazon the supposed profits would be reinvested in the business with large CapEx spend, here it seems that the negative margins are being spent on sales and marketing, which isn't the same as what Amazon was doing when it was treading in the negative for a decade.
- jjeaff 8y agoBut even today, my understanding is that essentially all of Amazon's profits are from AWS. So do we know for sure that their e-commerce model will ever be profitable?
- bradleyjg 8y agoHas anyone sat down and figured out what a reasonable valuation would be for AWS as a stand alone business? Surely not $900B, but half? A quarter?
- hedora 8y agoPublic cloud is about $300b per year right now. Assume amazon gets 66% long term, so $200b (this is unlikely for many reasons...) Cisco gets about $50b of revenue currently, and is worth ~250b. Extrapolating gets $1T. (I certainly don’t believe the above analysis; it’s terrible in multiple ways. For one thing, it ignores profit margins.)
- kaycebasques 8y agoMy buddy works for a law firm and was telling me that they often represent technology companies when they IPO. It turns out there’s an intense amount of research that goes into the S-1 process. The law firm makes a huge spreadsheet, with each row representing a sentence from the S-1, along with evidence supporting the truth of that sentence. They do this because, if the price goes down after the IPO, there’s inevitably a lawsuit, and the company needs to justify everything it said in the IPO.
- toomuchtodo 8y agoCould be a fun startup idea: NLP for securities legal action against IPOs for investors.
- jjeaff 8y agoGood luck getting VCs to fund something that fights against their primary source of return.
- deleted 8y ago[deleted]
- toomuchtodo 8y agoSome bootstrapping required.
- rongenre 8y agoIt'll have to be a lifestyle business /s
- Bombthecat 8y agoEnd result : block cloud chain, maybe future, or not! Get in now! Or not, maybe...
- village-idiot 8y agoUhh, uhh, trustless! Distributed!
- sandstrom 8y agoInteresting! This heading sounds off "Despite Pocketing More, Lyft Loses More per User". Shouldn't that be "Uber loses more…"?
- zone411 8y agoThe profit per monthly active user and the profit per ride graphs both show Lyft losing more.
- clairity 8y agothe buried lede is lyft's opex spike right before their ipo. typically you'd try to subdue expenses to make the profitability numbers look better, unless you have other problems to fix that you can spend your way out of. (taking these graphs as truth) lyft's gross margins were flagging, so it seems they goosed gross margins with opex, like marketing (likely promos) and better customer service (e.g., refunds). they spent their way to higher gross margins so they could look better than uber for ipo. but as the rest of the analysis points out, lyft is seriously behind uber in the race to overall profitability despite higher per ride take rates. they're still a risky investment in comparison.
- ohadron 8y agoThis comparison is very flawed as it fails to recognise a major difference: the two companies work in very different markets. Lyft is only active in the US while Uber is spread in many different countries. Unit economics look totally different in NYC, Cairo, and Rio.
- gist 8y agoAgree and the analysis being done by what I believe is a 'numbers guy'(from his CV) indicates that he will try to draw conclusions from numbers and that's a big if that assumes the numbers are equal or even accurate in how or who at each company is doing the measuring.[1] In fact that the numbers are different in the ways they are seems to be on it's face an indication that they can't be used to compare. [1] A very small example might be 0 to 60 acceleration in cars. If done by the manufacturing what is the weight of the 'jockey'(driver)? We never know that or I have never seen it (maybe a magazine when testing uses the same driver but I am not talking about that). Yet the weight of the driver does matter. I know that when I drive my high powered but small 'sports car' the car definitely accelerates slower when my wife is in the passenger seat. So an extra X pounds would make a difference in the comparison stats.
- jpatokal 8y agoI'm not so sure about that. Yes, the baseline numbers will be very different, but the economics of ride share are pretty much the same anywhere: there's an existing market price for taxis, which is more or less inflated everywhere due to regulation and inefficiency, and Uber/Lyft/whoever can provide a similar or better service at a profit... except that there's competition fueled by a bonfire of VC money pushing the margin deep into the red.
- ohadron 8y agoThink about factors such as: cost of vehicle ownership, cost of fuel, minimum wage, social policies, unemployment, public transport infrastructure, population density, specific ride sharing regulation, traffic congestion. All of these directly effect the unit economics of ride sharing.
- gumby 8y agoI can see some of these stats in action. Where I live (Bay Area) Lyft is always more expensive (I typically check them both), sometimes by a lot. While in Manhattan I find Lyft cheaper about a third of the time. So no surprise I take more uber rides. I have more incentive to stick with Uber now I’ve read this as the drivers make more (and typically the same driver does both anyway)
- chrischen 8y agoThere’s a lot of price discrimination going on, as I always see different prices in the apps from my friends, and due to me using lyft more historically (probably?) I get lower lyft-line rates about 70% of the time.
- baby 8y agoI live in SF and I alternate between Lyft and Uber. Lyft has been doing some discounts so it's not always Uber who's winning in terms of price.
- linkregister 8y agoDrivers use Lyft for a reason; they may have a greater bonus payment that balances out the higher commission to Lyft. As a rider, you should use whichever platform will get you to your destination the soonest and for the least amount of money.
- alehul 8y ago> Drivers use Lyft for a reason; they may have a greater bonus payment that balances out the higher commission to Lyft Drivers use Lyft because riders use Lyft, and it's better to drive for either at a given time than neither. It doesn't mean Lyft pays equally or higher.
- sidlls 8y agoI have yet to find a time or location where Uber wasn't more than Lyft when I needed a ride. Sometimes it's really egregious (50% more)--maybe during surge times?
- thisisit 8y agoIt is entirely possible for two companies to be the same but also different in how they see their market and revenues. So, without having a deeper understanding of reading financials, comparisons drawn solely based on numbers are flawed. For example, Uber says: > We derive our revenue principally from service fees paid by our Driver and restaurant partners for the use of our platform in connection with our Ridesharing products and Uber Eats offering provided by our partners to end-users. Our sole performance obligation in the transaction is to connect partners with end-users to facilitate the completion of a successful Ridesharing trip or Uber Eats meal delivery. Because end-users access our platform for free and we have no performance obligation to end-users, end-users are not our customers. By making this distinction, Uber might be on a path of trying to maximize it's driver/restaurant unit economics and not on the per user metric. While Lyft also thinks of drivers as their end customer but doesn't clarify the position of end-users like Uber: > We provide a service to drivers to complete a successful transportation service for riders. This service includes on-demand lead generation that assists drivers to find, receive and fulfill on-demand requests from riders seeking transportation services and related collection activities using our Lyft platform. As a result, our single performance obligation in the transaction is to connect drivers with riders to facilitate the completion of a successful transportation service for riders.
- username223 8y ago> Because end-users access our platform for free and we have no performance obligation to end-users, end-users are not our customers. That's some bracing cynicism there. So their business plan is to keep paying their taxi drivers less (with VC money), or providing worse service, until they figure out self-driving cars or run out of money?
- creddit 8y agoIt's actually the opposite. You're misunderstanding "end-users" and projecting your inherent bias against Uber. Once I explain what it _actually_ means, you'll probably project it again but here you're just doing so incorrectly :) "End-users" as defined here are actually the riders/"eaters" of Uber. Uber is saying these people are not their customers because they are just providing access to drivers/restaurants+delivery people with their platform. What Uber is saying is that driver/restaurants/devliery people are independently selling their products/services on Uber as a platform and that end-users (riders/eaters/consumers) are simply given free access.
- nabla9 8y agoWhen the business matures, the margins in the TNC business will be razor thin. There will be local competitors in every city. There will be pure software companies that build TNC apps and sell operating services. Maybe Vuitton, Apple, Waymo, Herz, Hilton, Star Alliance, Oneworld etc. also have their own mobility service provider networks. Say 4 billion people, 1% of them do ride-hailing of some kind, every one of them has five ride sharing apps and they pay $0.20 per day for each. That's $15B in revenue total for all those involved.
- lettergram 8y agoCalling it now, Uber has several large loans coming due in 2021 and 2022. I suspect we will see the bankruptcy proceedings around that time. They may survive, not strapped with the debt, perhaps they’ll be profitable. Aka they will just have debt restructuring. Regardless, that’s when I suspect the bankruptcy will occur.
- baby 8y agothis is wishful thinking, Uber is everywhere and too big to fail. It might be hard to see if you don't travel much outside the US. On the other hand, I don't know anyone outside the US who knows Lyft.
- willhslade 8y agoHow is Uber, a company that has never made money, and has competitors in every market in taxi cabs, too big to fail? TBTF refers to banks, not side investments from SoftBank and Saudi Arabia.
- soVeryTired 8y agoIt's hard to see how they're 'too big to fail'. That term is used to describe institutions whose demise could wreak havoc on society, so their failure is prevented by government. Uber could fail and no-one but its investors would bat an eyelid.
- ganeshkrishnan 8y agoThe loans are also debts from the NYC financial firms (GS et al). If uber goes bankrupt it would like bear stearns all over again.
- rsuelzer 8y agoFrom the drivers I know, they much prefer to drive for Lyft. Almost entirely because they say Lyft riders leave much larger tips and Uber drivers tip much less if at all.