Lyft Files to Raise as Much as $1B | Hacker News Reader

Lyft Files to Raise as Much as $1B

techcrunch.com

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>Amid reports of Lyft’s financial struggles in its recently leaked financials, it’s obvious why the company seeks to raise so much money — the on-demand transportation market is a tough place to operate, especially with competition like Uber. According to Bloomberg, the ridesharing startup took a net loss of $127 million in the first half of this year while bringing in less than $47 million in revenue.

Does anybody know how this loss compares to Uber? I don't recall any of their financials being leaked recently.

I don't remember the details, but I think Uber showed a similar revenue/loss ratio...

There was HN discussion about it and the main thing people were saying is there's an opportunity cost in not spending the money (mainly in expansion).

I kind of feel like Uber is in a bit of a "monopoly or bust" position though, using similar 4X techniques to our former favorite tech boogieman (subsidizing driver rates then removing subsidies once growth stops...).

Not quite sure what Lyft is using its money for, though. My impression is there strategy is to not be jerks and focus on US only for now. Guess this is a "good guys lose" situation...

Uber loses at least $470M / year, if not more (unsure if the number is per quarter, half-year, or full year) [1].

Lyft's struggles have nothing to do with their losses, and all to do with the fact that they're losing the market to Uber.

[1] http://www.businessinsider.com/uber-reportedly-operating-at-...

Uber lost 470m/period. As the article mentions, these figures are outdated by a number of years and completely irrelevant - Uber is hitting more than 2.5 billion in revenue (commission) this year.

According to public information, Lyft is losing approximately 3 to 5 times the amount of money per ride.

If those numbers are indeed out of date (I'm not taking an Uber spokesperson's word for it), I would be inclined to believe they are losing even more than $470M/period, given their extremely aggressive expansion and extremely aggressive fundraising.

In China, yes, but recent Uber aggression has been anything but aggressive. Just look at driver referral incentives been slashed from $750 to $200 (if you're lucky).

> According to public information, Lyft is losing approximately 3 to 5 times the amount of money per ride.

And it sounds like they're struggling to gain market share even given those subsidies.

As both a Lyft and Uber user, it feels as though Lyft is spending a lot more money to "drive loyalty" than Uber via $50 free promos. But I feel their targeting is off because loyalty doesn't appear to increase with more rides for rider nor driver.

Taxi fare is something everyone wants to save on. Once Uber and Lyft start making big margin on their service other low key and smaller companies can compete with them. Pretty much like airfare. Price is the king and low cost companies are doing a lot of business. I'm not sure how this Uber/Lyft story will end but I'm pretty sure it's not going to end like Facebook or Google.

Unless one brings robot taxis. Lowest price and highest profits.

Right now it's just an app for taxis. But robots totally flip the market on head.

I don't see how this will fly even with robot taxis. Not for too long at least. I think self driving cars will be commoditized easily. Any new player can simply leverage the technology. The economy of scale is simply not there in this business, compared to the leverage Google and Facebook have. There is hardly any network effect, and it is still highly capital intensive even with robot cars. So while they may succeed in being and maintaining their status as multi-billion dollar companies, I am not seeing how they can go much further in the long run.

Completely disagree regarding the network effect of Uber vs. Lyft. The system is highly network dependent. Most Uber drivers would prefer to drive for Lyft because Lyft pays more (partially why they're losing more money than Uber), but in most markets Lyft doesn't have as many riders that use the service. As a driver, you want to maximize time spent with a fare vs. fare-hunting. Similarly, as a rider, you are weighing price vs. time meaning most people will pay more $ to wait less for their ride.

Most drivers I talk to drive for both and keep both on, but get more pings on Uber than on Lyft. In SF Lyft has more mind-share and it's a more even split.

FWIW I've lived in both SF and NYC since the rise of these services.

But that type of network effect is easily undermined by a service that offers cheaper fares. I saw this happen first-hand in India where Ola cabs, which was being used by almost everyone, quickly started losing users to Uber once Uber started their massive discounts and promotion series in India.

Too early. They'll run out of cash long before 'robot taxis' will save their asses.

> But robots totally flip the market on head.

Yeah, as in people will be able to mod their existing cars to be self-driving and then rent them out AirBnB-style when they aren't using them. There's even a distributed storage system already built to handle that ... people's driveways and garages.

Is it weird to say i'd almost start paying Taxi-level fares again if the drivers would stop sucking at driving so much? This is mainly aimed at Lyft; Uber drivers are much more professional.

How big is the gap between Lyft and Uber in India and China and other large Asian markets? In China, is there a state-favored rival [1] that could just shut out both? From an American perspective, it's hard to imagine Lyft overcoming Uber's lead...but maybe it's a sensible investment if Lyft has a strong chance of being bought by an Asian company?

[1] edit: Found this Fortune article, which describes Didi-Kuaidi as the "Uber of China" with 1 million drivers versus Uber's 100,000 drivers. Also, Didi is an investor in Lyft: http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/

Uber has very little chance to win China market considering competition from Didi which is backed by Tencent and Alibaba. Considering the insurmountable dominance of Tencent's Wechat and Alibaba's AliPay on mobile phones in Chinese market.

Some reports that Didi has 80+% market in China and Uber gets 10+%.

Baidu was a strategic investor in Uber, and they lead another $1.2B round a couple of months ago. Both companies have local giants backing them, so anything can happen. If I had to bet, though, I'd bet on Uber winning in China if they can win enough of the rest of the world.

http://techcrunch.com/2015/09/07/uber-confirms-its-raised-1-...

I know this but BIDU is leaving first tier internet companies in China. This can be seen from its market cap which is almost a third of alibaba or tencent.

No matter what you bet -- you should always bet on something you can control not others.

Yeah but Didi's offering is a ride hailing app for regular taxis while Uber is doing the 'black car' thing. So they are kind of differentiated. Also Uber are partnered with Baidu, the Google of China so they can have Uber fares pop up when people google stuff. Or should that be baidu stuff? Dunno.

Not really.

Didi has multiple products already aside from taxis. limo/black-car, ride-share, valet which is far more than illegal-taxi-only in Uber China.

China explicitly requires license for commercial taxi operations. So UberX's business model is at great regulation risk.

http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-...

It's all one big fu to uber

Perhaps they should name this alliance G.O.L.D.

Lyft is like non-exist in China. Uber is currently second to Didi with about one third of its market share.

If they actually manage to raise this amount of money then an amazing amount of capital is going to be destroyed over the next couple of years. Uber and Lyft going head to head to try and grab a monopoly is an extremely effective way for investors to lose a truck load of money.

"Destroyed" is an unfortunate term to use. The drivers and riders will benefit who are predominantly not rich, so its actually a kind of stimulus.

It probably is closer to destroy rather than transfer. Yes there will be a shift of capital from investors pockets (pension funds ultimately) to drivers and consumers, but a lot of this capital will be squandered on drivers driving at less than full capacity and consumers not paying the true economic price. Neither of these is a very productive use of capital - there is of course the environmental cost of half-empty cars driving around too.

I see consumers not paying the true economic price as a form of stimulus. They're receiving more value than they are paying for, and so they presumably are living better lives and will be able to spend that saved money elsewhere (movies, food, etc). Similarly, if drivers are at less than full capacity that means there are more drivers than there would be without the funding, and thus more drivers getting paid.

No arguing against the environmental impact of course, other than the hope that cheap ride-sharing reduces the likelihood of car ownership.

This sort of stimulus is like paying people to dig holes and fill them back up again. Given the money being spent is mostly workers pensions I am not too sure that this is the best use of their future retirement income.

No it's more like providing very cheap transit fares, or free maid service. It's a useful transient service to most people who's value doesn't show a specific investment benefit like free daycare would. Digging ditches and filling them again provides no economic side value.

No it really is like digging holes. There is no long term value being created here. If they could afford to subsidise cheap transport indefinitely then there might be some value, but providing a service like this for a short period of time is providing no long term economic benefit.

We would be better off calling one side the winner and just giving each person using uber and lyft the subsidy in cash and letting them spend it in the most efficient manner.

My examples were short term benefits. Once the transit fares are not cheap anymore, or the maid service stops, then the benefit goes away. But people still had a short term benefit.

Digging holes and filling them has zero economic benefit. That is the difference.

Providing a service that is not sustainable will have more negative long term effects than digging holes. Digging holes is just a means of transferring cash to the hole diggers, creating a service that people start to use will create negative externalities once removed (people take jobs further from where they live because the cost of transport is lower, or all alternative transport services like taxis go out of business). If the externalities are greater than the short term benefit then the overall economic benefit will be negative.

I see a price war that results in a loss of transport competitors as being long term negative. This doesn’t exist with hole digging.

Maybe not rich but a lot of the lower income people in my neighborhood in Brooklyn aren't using Uber or Lyft regardless of how cheap because they don't have much money period. You have to have a phone and internet access for these services so it's definitely not hitting the lowest brackets.

Yes the Uber/Lyft for poor people is called a bus. Hence why the bus network is so bad in so many location :(

Do you have data to support this? I too live in Brooklyn and have found the opposite to be true.

Brooklyn is a big place, and the person you're replying to did just say his neighborhood… probably little data available on any scale let alone the scale of one's neighborhood, aside from anecdotal.

Well I guess that could explain the 50% off rides promo they've been running in NYC for the past 6 weeks. Seems like every Sunday I get a push notification that it is extended.

Lyft is running cash-burning (not merely unsustainable) promotions in a select number of cities, most likely to try and impress prospective investors that "We have 40% marketshare in NYC!".

Pretty meaningless when that's the result of a 50% off. Meanwhile Uber has been cutting back on promotions and incentives.

I wish Apple would actually ban APNS spammers. Yelp does it too ("Yelp Weekly" or something).

Settings -> Notifications -> off?

No, that's not an acceptable solution. Spammers should be banned. But I actually wasn't strong enough:

https://developer.apple.com/app-store/review/guidelines/#pus...

By section 5.6, Lyft should be removed from the App Store. I wish they'd do it!

As an adult I don't want to get into a car with a huge pink mustache on it.

Get over myself? Sure, but the brand is terrible.

They've backed away heavily from the mustache.

Its a magnet now, but there's still a mustache on the car and it still looks stupid as hell.

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