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The problem with Lyft is that they are in a poorly understood market, in second place and burning cash at neck-breaking speed. Even if they manage to start maki

The problem with Lyft is that they are in a poorly understood market, in second place and burning cash at neck-breaking speed. Even if they manage to start making progress towards profitability, they might need more than that. The reality is that ride-sharing probably needs another lustrum or so to solidify and that seems excessively long for Lyft in its current state. Uber faces the same challenges but its way more diversified and can scale down from certain markets and verticals. Lyft on the other hand has only one market (N.America) and only one vertical (ride-sharing). Doesn't take a genius to understand that scenario looks risky as hell. Especially when you're in a business with nominal differentiation.

sovnade 7y ago
And to top it off, this entire business model is temporary. The end game for all of these companies (and Tesla/etc as well) is to have autonomous fleets. They have to bleed cash to snap up as much of the market as possible before that happens so they're not starting from zero. At this point it feels like a game of who has enough funding to survive the interim to make it to a driverless service.
- asdff 7y ago
  What's to stop Waymo with Alphabets deep pockets to cobble together an app (or waze update) once they get a decent self driving car produced? Alphabet isn't going to just give this market to uber/lyft after they burned so much money on engineering. Even if they licensed their cars it would be temporary until their own app comes out.
jonathankoren 7y ago
Uber’s multiple markets maybe an advantage. If they’re all equally unprofitable, perhaps not, but at least that’s plausible. Uber’s multiple verticals are dogs, and reek of money madness. Eats is small time and loses money. I don’t know it’s financials, but I find it hard that this ancillary business is in a healthier state than a competitor who has it as their core buisness. Uber ATG is as bad off as any other autonomous car program. There’s a growing realization that technology won’t be ready anytime soon. (See Andrew Ng’s comments about just redesigning cities to limit autonomous vehicles’ interactions) Uber Freight is a ghost town.[0] The of course there’s the buisness if renting and then discarding Xiaomi scooters. (Or is that not a thing anymore? I honestly don’t remember.) Sure, I understand the logic behind all of these. Once you have a system to tell a person “Go here, and take this here,” then you can plug pretty much anything into those slots. However. No one has shown that the way they’re doing it is a sustainable business model, and it looks like it’s not. [0] https://www.forbes.com/sites/stevebanker/2018/04/10/is-uber-freight-on-the-verge-of-going-out-of-business/ https://www.forbes.com/sites/stevebanker/2018/04/10/is-uber-...
- whoisjuan 7y ago
  This is very true. Their diversification it's not necessarily a good diversification. I think only Uber Eats has the potential to produce some positive result in the mid-term, but it also depends on how much they decide ton invest on it.
- darkwizard42 7y ago
  Uber Eats is making money... the financials are clearly listed in its S-1, https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm https://www.sec.gov/Archives/edgar/data/1543151/000119312519... Uber Eats is currently 2nd/3rd place in market share for food delivery at around 20%, https://qz.com/1549084/doordash-overtook-uber-eats-in-us-online-food-delivery-second-measure-finds/ https://qz.com/1549084/doordash-overtook-uber-eats-in-us-onl... There is a lot more out there on Eats financials as listed in the S-1 and in previous "leaks". Definitely seems like a healthy business where I agree its revenue is much smaller than the overall ride-sharing business, but from a technology standpoint they are likely better than their competitors BECAUSE of having a core ride-sharing business with which it overlaps a lot of ideas like pricing, dispatch, ETA predictions.
  - jonathankoren 7y ago
    Thanks for the qualification about Eats. However, I don’t think the issue in food delivery is a technical. I think it’s financial.

sovnade 7y ago

And to top it off, this entire business model is temporary. The end game for all of these companies (and Tesla/etc as well) is to have autonomous fleets. They have to bleed cash to snap up as much of the market as possible before that happens so they're not starting from zero. At this point it feels like a game of who has enough funding to survive the interim to make it to a driverless service.

asdff 7y ago
What's to stop Waymo with Alphabets deep pockets to cobble together an app (or waze update) once they get a decent self driving car produced? Alphabet isn't going to just give this market to uber/lyft after they burned so much money on engineering. Even if they licensed their cars it would be temporary until their own app comes out.

jonathankoren 7y ago

Uber’s multiple markets maybe an advantage. If they’re all equally unprofitable, perhaps not, but at least that’s plausible. Uber’s multiple verticals are dogs, and reek of money madness. Eats is small time and loses money. I don’t know it’s financials, but I find it hard that this ancillary business is in a healthier state than a competitor who has it as their core buisness. Uber ATG is as bad off as any other autonomous car program. There’s a growing realization that technology won’t be ready anytime soon. (See Andrew Ng’s comments about just redesigning cities to limit autonomous vehicles’ interactions) Uber Freight is a ghost town.[0] The of course there’s the buisness if renting and then discarding Xiaomi scooters. (Or is that not a thing anymore? I honestly don’t remember.) Sure, I understand the logic behind all of these. Once you have a system to tell a person “Go here, and take this here,” then you can plug pretty much anything into those slots. However. No one has shown that the way they’re doing it is a sustainable business model, and it looks like it’s not. [0] https://www.forbes.com/sites/stevebanker/2018/04/10/is-uber-freight-on-the-verge-of-going-out-of-business/ https://www.forbes.com/sites/stevebanker/2018/04/10/is-uber-...

whoisjuan 7y ago
This is very true. Their diversification it's not necessarily a good diversification. I think only Uber Eats has the potential to produce some positive result in the mid-term, but it also depends on how much they decide ton invest on it.
darkwizard42 7y ago
Uber Eats is making money... the financials are clearly listed in its S-1, https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm https://www.sec.gov/Archives/edgar/data/1543151/000119312519... Uber Eats is currently 2nd/3rd place in market share for food delivery at around 20%, https://qz.com/1549084/doordash-overtook-uber-eats-in-us-online-food-delivery-second-measure-finds/ https://qz.com/1549084/doordash-overtook-uber-eats-in-us-onl... There is a lot more out there on Eats financials as listed in the S-1 and in previous "leaks". Definitely seems like a healthy business where I agree its revenue is much smaller than the overall ride-sharing business, but from a technology standpoint they are likely better than their competitors BECAUSE of having a core ride-sharing business with which it overlaps a lot of ideas like pricing, dispatch, ETA predictions.
- jonathankoren 7y ago
  Thanks for the qualification about Eats. However, I don’t think the issue in food delivery is a technical. I think it’s financial.