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The point is, if Lyft goes out of business, it has the same effect on the market for rideshare prices as an acquisition does, so why not allow the merger so it'

The point is, if Lyft goes out of business, it has the same effect on the market for rideshare prices as an acquisition does, so why not allow the merger so it's less disruptive and more employees get to keep their jobs?

eganist 3y ago
If Lyft is allowed to go out of business, it doesn't mean Uber necessarily takes over; it means there'll be opportunities for others (including legacy cab associations) to fill the void. If Lyft dies, if anything it'll spook investors about Uber's prospects given that market forces would have led to the demise of a direct competitor. If the two merge, investors will instead be motivated to bolster the combined firm.
stale2002 3y ago
No actually, it doesn't have the same effect, because lyft can simply downsize itself, to only being in profitable areas, which still has positive competitive effects.
- CydeWeys 3y ago
  Economy of scale exists, though. I don't think there's any subset of its current markets that Lyft can reduce itself down to and be profitable.
Jochim 3y ago
Because the shareholders should lose their money.
- CydeWeys 3y ago
  Lyft shareholders have already lost the vast majority of their investment. And I think we should have better motives here than punitive maliciousness.
shagie 3y ago
Which employees? FTEs that work in the corporate office and have gone through a 25% and an unspecified "performance" reduction in force? Merging the two companies would result in many redundancies that would be eliminated. Uber has about 32,000 employees(?! https://stockanalysis.com/stocks/uber/employees/ https://stockanalysis.com/stocks/uber/employees/ ). Lyft has about 3000. I doubt that any M&A of Lyft into Uber would result in Uber being 35,000 employees for long. For the drivers, many work for both ("But even though Uber is the dominant player among drivers, that doesn’t mean there’s a whole lot of driver loyalty. Nearly 80% of drivers have actually signed up for 2 or more services with Lyft, Postmates, the DoorDash driver sign up bonus, UberEats and Amazon Flex, all siphoning drivers away from Uber." https://therideshareguy.com/uber-driver-survey/ https://therideshareguy.com/uber-driver-survey/ ) and so removing Lyft as an option isn't as impactful to the market. If a given city has the demand for N drivers - it doesn't matter too much if that's split across multiple services or not other than passenger preference. It probably would impact the cost for passengers since there would be less competition, but that happens in either case of Uber acquiring Lyft or Lyft folding.

eganist 3y ago

If Lyft is allowed to go out of business, it doesn't mean Uber necessarily takes over; it means there'll be opportunities for others (including legacy cab associations) to fill the void. If Lyft dies, if anything it'll spook investors about Uber's prospects given that market forces would have led to the demise of a direct competitor. If the two merge, investors will instead be motivated to bolster the combined firm.

stale2002 3y ago

No actually, it doesn't have the same effect, because lyft can simply downsize itself, to only being in profitable areas, which still has positive competitive effects.

CydeWeys 3y ago
Economy of scale exists, though. I don't think there's any subset of its current markets that Lyft can reduce itself down to and be profitable.

Jochim 3y ago

Because the shareholders should lose their money.

CydeWeys 3y ago
Lyft shareholders have already lost the vast majority of their investment. And I think we should have better motives here than punitive maliciousness.

shagie 3y ago

Which employees? FTEs that work in the corporate office and have gone through a 25% and an unspecified "performance" reduction in force? Merging the two companies would result in many redundancies that would be eliminated. Uber has about 32,000 employees(?! https://stockanalysis.com/stocks/uber/employees/ https://stockanalysis.com/stocks/uber/employees/ ). Lyft has about 3000. I doubt that any M&A of Lyft into Uber would result in Uber being 35,000 employees for long. For the drivers, many work for both ("But even though Uber is the dominant player among drivers, that doesn’t mean there’s a whole lot of driver loyalty. Nearly 80% of drivers have actually signed up for 2 or more services with Lyft, Postmates, the DoorDash driver sign up bonus, UberEats and Amazon Flex, all siphoning drivers away from Uber." https://therideshareguy.com/uber-driver-survey/ https://therideshareguy.com/uber-driver-survey/ ) and so removing Lyft as an option isn't as impactful to the market. If a given city has the demand for N drivers - it doesn't matter too much if that's split across multiple services or not other than passenger preference. It probably would impact the cost for passengers since there would be less competition, but that happens in either case of Uber acquiring Lyft or Lyft folding.