Hacker News Reader

Comment by quantumhobbit | Hacker News Reader

14 cents per ride is nothing! Maybe 1% of the cost of a ride.

Maybe they could save a bunch by colo or something else. But would 14 cents per ride really matter at all for their competitiveness. I’m not going to notice a 14 cent difference even if I do bother to price compare Uber with Lyft.

This is a VC fueled market. It isn’t really about small margins of this size.

View on HN

It may be 1% of the cost of the ride, but it's likely a substantially larger part of the profits of the ride.

Lyft lost a billion dollars on $2B of revenue in 2018.

So saving $8m a month, or $100m a year, isn't going to turn that round.

Cutting 10% of losses is hardly something to sneer at.

You wouldn't be able to cut all of it. Also making those major infrastructure changes are really expensive.

More like 5% if they cost costs to 0. But realistically they can cut costs by maybe half.... so you're taking significant risk for cutting losses by... 2.5%?

If you're still losing $100m a month you have bigger problems then saving a couple million in infrastructure costs.

Moving from AWS, or doubling AWS spending, will make no difference to the company's viability, it's not worth the time in meetings to discuss it.

Man this industry is crazy. Most traditional companies fight hard to gain even 1% in net margin.

Most traditional companies are based on having revenues higher than costs.

dotcom v3.0 companies are all about the potential and cornering the market. Amazon was exactly the same - it was founded in 1994 but didn't make a profit until 2001.

For Lyft having a taxi anywhere I want one with low wait times at low cost is going to secure their success. Not new features in their app, not even latency to the data center.

There's no reason they need to be spending such crazy amounts on servers - ostensibly to allow faster iteration. A new version of their app just isn't going to move the needle. Signing up new drivers will though.

I fail to see how the benefits AWS provides are so important they need to spend such crazy amounts.

They need to be seen to be doing something other than bleeding money.

Every extra driver costs them money, every lift costs them money. If they can hold out the illusion of "we know we can save money here when we've got time and have won the market", maybe it keeps the money rolling in.

Reply on news.ycombinator.com