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To be fair it's the unit economics that you'd want to look at, not the timeframe. If their goal is to go very global, very quickly, it'll take more than a deca
by sonnyblarney 7y ago
To be fair it's the unit economics that you'd want to look at, not the timeframe.
If their goal is to go very global, very quickly, it'll take more than a decade of burn.
If the unit numbers work in established cities, and they are spending on direct expansion, then it's good.
That said, much of their 'expansion' has been into other things, and their unit economics are questionable, though on the later ... when Lyft and Uber settle down into a nice duopoly in most cities prices will inch up a little bit if need be.
- notahacker 7y agoA big question is whether the unit economics of ride hailing in their currently profitable cities are a best case scenario, which seems plausible (US taxis are by most accounts unusually restricted, expensive and lacking in alternatives compared with transport in most of the rest of the world and US consumers much richer than average, and the Uber brand isn't necessarily the same asset in other markets either). Which raises the question of whether they'll ever get a return on more difficult to penetrate and competitive markets.
- sonnyblarney 7y agoYes, that's the big question. I believe that they do provide value, and have kind of a network and brand effect. I believe there's some margin for Lyft/Uber to exist. How big it will be? Who knows. Maybe not enough to support their gigantic valuation, but probably some valuation. I think many of these IPO's are simply way overvalued and are going to have trouble maintaining value. They might crash if there is a stock market tumble as the wind comes out their sales. The difference between now and 2000 however is that these are actually viable business at least on some level.