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Comment by tastynacho | Hacker News Reader

Can someone please explain how its possible to lose that much money? What exactly does that 50M constitute?

1. Giving generous discounts to get people to establish the habit of Lyft-ing regularly.

2. Subsidizing the cost of rides with VC money. For example, paying the driver more than the customer is charged for a normal ride. Also, I'm not sure if it's still this way but at one point Lyft Line in SF was a flat rate ~$5 even for long distances.

Tune the discount percentages to arrive at the maximum "losable" amount.

It's working on me. I can't remember when or why I switched from Uber to Lyft. Maybe it's the capped Lyft Line prices they used to have, or perhaps the billboards. It's certainly not the fist bumps.

They give out signing bonuses to drivers (as much as $2000) and free credits to new riders (as much as $50). Launching in new markets gets expensive quickly with that model.

Yeah my Uber driver when I was in SF gave me $50 Lyft credit, so I just switched over, used the credit and then went back to Uber when it was finished.

Why did you go back to Uber?

I find the app nicer and the drivers less chatty.

I did the same. Advantages of Uber - no tipping and the pool service usually combines two users rather than three with Lyft.

Lyft seems to be a bit (10–20%) cheaper, at least in Ohio.

I would assume it has to did with user acquisition costs or promotions in cities to re-engage existing users.

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