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Comment by stephencoyner | Hacker News Reader

This seems like a great time for Amazon or Google to buy Lyft.

Amazon could bundle rides with package deliveries and get the pre-existing driver and passenger network from Lyft. Lyft was actually telling drivers to work with Amazon when the pandemic started (1).

Waymo could take Lyft’s aggregated rider demand. They already have a partnership to transfer autonomous rides from Waymo to Lyft during bad weather situations and refer Lyft riders to Waymo vehicles (2).

Edit - links below.

(1) Amazon - https://www.theverge.com/2020/3/27/21197699/lyft-amazon-coro...

(2) Waymo - https://www.fool.com/investing/2019/05/08/waymo-lyft-partner...

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a great time for Amazon or Google to buy Lyft

...What would they do with it? The business model (also uber) as-is makes a loss.

Uber/Lyft's initial proposition was that once ride sharing incumbents were established, they'd have a software-ish monopoly and margins. This did not work out. Now the proposition is "When driverless cars get invented..."

If google had a car that can drive itself, they can figure out an app. They can get to a customer base. The driverless car is the important part.

Amazon otoh... deliveries maybe? If they could figure out a way to do deliveries in a lyft/uber model... that's valuable to amazon.

Yes, it probably would be a valuable to Amazon. So valuable, in fact, that it already[1] exists.

[1]https://flex.amazon.com/

yea it's trivial for Amazon to create their own 'driver network'

Yes, this exists today, but what Amazon would be buying is faster time to expansion. If they need drivers now (which is an assumption, I don't know this to be a fact) Lyft gives them an established network incredibly fast.

So obviously the price would have to be right and of course Amazon wouldn't be paying a large premium.

An advertising campaign to attract drivers is probably a lot cheaper than buying Lyft.

A simple press release would do the trick.

True. Also, given the number of customers they have, a few banner ads on their own site might work, too.

There are wild differences between flex and ride sharing.

Amazon already had an internal project that was going to compete with Lyft and Uber. It was called Rides and it was abandoned. Rex Tibbens headed that project and subsequently left Amazon and went to join Lyft as their COO.

Sure, I'll switch between ride sharing apps based on cost alone. But I'll still want available drivers near me. I'm not willing to try multiple apps just to see if it's usable.

I think Uber/Lyft's customer bases are definitely valuable. There's a real business there post Covid-19. I'm not sure what the margins would look like though. I think an acquisition might be a good idea if it was cheap enough and it looked like competitors wouldn't be able to use vc money to offer rides below cost.

I could see value for self-driving/ride-sharing data collection for Google. Google wants to make a ride-sharing program, well has one now I guess, having all that data seems like a boon if Lyft is a cheap buy. They could also collect a lot of data for use with their self-driving research as well.

Exactly. Lyft doesn't have anything they can't create for a lot less money. And if they buy it, they get a lot of headaches: legacy code, legacy staff, legacy relationships to partner and drivers.

> The business model (also uber) as-is makes a loss.

Uber's ride-hailing business is profitable. They lose money because they subsidize Ubereats.

I really don't think Waymo needs Lyft or Uber to dominate the ride hailing market in the future.

If they can make a better self-driving car than anyone else, they will win the ride-hailing market. People have no loyalty to Lyft or Uber. They will use whatever is the cheapest/most convenient.

This seems like a great time for Amazon or Google to buy Lyft

Or maybe Apple.

Apple has been pouring millions into improving its street views in Apple Maps. It should buy Lyft. Pay the drivers an extra $x/mile to clamp the Apple Maps image gathering device to the roofs of their cars.

The drivers win because they get a bump in income in an industry that's already hurting.

Apple wins because it gets up-to-date information about the places where people go most.

Even better: Apple could pay them $x/mile to drive to specific areas where the data is stale or missing.

As a former Uber/Lyft driver, I'd be all over this like Oprah on a baked ham.

Apple seem to have already done the job without Lyft’s help.

Initial data acquisition and keeping the data updated are vastly different tasks.

This gives you high frequency data of common roads at an incredible cost. Street views only need very low frequency data of all roads, so you'd be paying a premium for data that isn't needed while still having a gap.

In boom towns there is a lot of construction. Having up to date data would be exceedingly valuable there. Downtown Springfield, maybe not so much.

you can cover easily with one car per town. there's no value in acquiring Lyft to get a few drivers.

Apple would only buy Lyft if they could control the brand experience to a level that just isn't possible at scale with humans as the primary service delivery (cough) vehicle.

Consider the Apple retail experience. Retail is relatively easy to train for, there's a big labor pool to pick from, and with Apple's revenue/sq.ft. they can afford to compete for good staff.

Now consider the sum of your Uber/Lyft experiences and the scale of the problem. Is it reasonable to expect an Apple retail level experience in the ride app space? Even with a tolerable up-charge?

Retail experiences have always varied with some brands able to offer consistently stellar experiences. Tiffany comes to mind. In all my adult years hailing a car has always been a total shit show except at the most extreme price points. I won't speculate as to why, I'm just saying, the quality problem of mass small auto ride hailing has yet to be fixed by anyone.

>Is it reasonable to expect an Apple retail level experience in the ride app space? Even with a tolerable up-charge?

They're called limos. And Uber already does them. Most people won't pay the premium though and that means, in part, that I imagine they have a fairly limited network outside of some dense metros.

Of course black cars are available for many companies if you pre-book. It's what I use for my home airport--or at least did when I was flying.

> Pay the drivers an extra $x/mile to clamp the Apple Maps image gathering device to the roofs of their cars.

Scenario 1 (buy Lyft): So if Lyft has around 1 million drivers in USA [1], and Apple will pay them an average of $50/month to use the device + the cost of the device/installation (around $100) that would cost around $150,000,000 on top of the acquisition price. And you cant really be sure that they covered all roads.

Scenario 2 (hire drivers): US total road length is about 4 million miles, average driver can cover about 160 miles a day (8 hours * 20Mph). If you want to drive through all of the US in 30 days you would need around 800 drivers. If you pay them $5000/month to do that, that would cost you "just" $4 million.

[1] https://investor.lyft.com/news-releases/news-release-details...

Presumably there's more valuable data than just maps. I would imagine that Lyft could give valuable real-time data like areas of the city where there's traffic congestion and slower drive times. It's unclear how you'd value that, but it seems like an acquiring company would get more than just raw map data for all available streets.

Remember that Apple currently maintains its own fleet of such mapping vehicles, so there would be some savings, as well.

> Pay the drivers an extra $x/mile to clamp the Apple Maps image gathering device to the roofs of their cars.

Why bother paying them? If they own the company, just make it a condition of the contractor agreement.

Because it's Apple, not Google.

And because the drivers own their cars, and will want to be compensated for any alteration to the car. Just like they get compensated for hanging ads of their headrests.

Downvoted this for two reasons.

1) You don't explain how in monetary terms Apple having that better data would offset its additional costs since Lyft does not derive a profit.

2) This comment was mean-spirited and completely unnecessary:

> As a former Uber/Lyft driver, I'd be all over this like Oprah on a baked ham.

> Apple wins because it gets up-to-date information about the places where people go most.

Apple is already doing this - my iOS Maps has real time traffic in areas where I know that they're only getting this information from other iOS users, not from reporting devices.

> This seems like a great time for Amazon or Google to buy Lyft.

Why? It's a low-margin, money losing business. On top of that it's operating in a space with a lot of legal risks, regulations and competition.

I work for Lyft and was part of this cut. I truly worked toward fixing things, and I don't want to sound salty here even though will, there's not much going on with Lyft or Uber to save in terms of tech. It's shoddy and useless. For the most part if Amazon got into the game now, and with their flywheel, they could eat Lyft alive and wait for Uber to bleed dry.

I'm sorry for it. Just wondering and want to know your perspective, if teams like ML and Data Science are more of a luxury than a necessity? They're mostly not a revenue generating team and I constantly see them being part of such layoffs.

They are at Lyft which tries to solve hard problems like Pricing and Dispatch optimization.

For other, perhaps smaller, companies you still need a Data Analyst or someone who can read data and make sense of it, but not a Data Scientist who works in a silo and has a sexy job title.

Both Uber and Lyft have self-driving initiatives. Perhaps their regular ride-hailing business doesn't have much tech but they hired some famous people to do their self-driving tech.

Why does a tech company want to get into taxis?

They might as well buy a cheese company that is in financial trouble.

Google had (still has, I believe) a fair investment in Lyft. Perhaps they could expand that.

Agreed, though the stock went up after this news, Google and Amazon could have acted faster.

That's because there is at least 17% less share dilution than there was a day before, let alone the runway being marginally extended.

So speculators don't get dumped on by employees with RSUs all day every day, and the business prospects are not adversely impacted any more than they already were. Thats when you pay more for shares.

Layoffs are proactive for investors, not an omen for investors, don't get that confused.

The distribution of RSUs at all major tech companies is very uneven. Most job titles don't get any, or just a token amount. Only executives and software engineers can negotiate for the large grants.

I'd guess less than 10% of employees probably hold more than 90% of RSUs everywhere (not that different from the stock market as a whole, where 10% of Americans own over 80% of the market).

So a 17% layoff might not touch the RSU-rich employees very much at all.

Won't this create more share dilution in the short term? Don't layoffs trigger options/RSUs to be executed some time window after the layoff?

The other thing I would add is that new employees usually get some cash value for their level divided by the current stock price. Many laid off employees were hired when the stock price was higher. If they have to replace these employees with new ones in a timeframe before the stock price has recovered then they suffer more dilution.

LYFT and many recently IPO'd tech companies have been doing monthly vesting, with no cliff. So basically with all their massive hiring, employees have already been dumping shares.

The conditions on the unvested portions typically are destroyed. With options are available to purchase for exercise. That's pretty exclusive to startup life, but the same concept in RSUs at big tech where only the vested portion is sellable and the rest is destroyed.

That being said, a contract can say anything.

Lyft unfortunately does not do monthly vesting. There are strict trading windows as well.

If this is really a factor in the stock price, then that company is toast.

When an employee is hired, the assumption is that that employee's all-in hiring cost is less than the increase in value for all shareholders. That means if you pay an employee $250K a year, including stock, the shareholders better be getting more than $250K back in value.

By your reasoning, the shareholders are losing more by dilution than they gain back by enterprise value. If that's the case they should fire everyone and close their doors, since there's no RSU dilution at all with zero employees.

On the other hand, if employees were hired with the assumption that they were worth the price, then any layoffs should rationally reduce the stock value - because even though you get the RSUs back, the employees must have been worth more than those RSUs or it was a mistake to hire them in the first place.

Nice logic, the only reality is that wall street tolerated being dumped on by employees in the theoretically high growth tech sector.

no voting rights, no dividends, create shares, dump on investors

the limits of this tolerance was pushed and pushed in the macro environment of there being nothing else to invest in

if share price goes up, profitability "just a few quarters away", the employee value proposition or executive handcuffs are not factored in

for a long time the "share price" trend of tech companies has not been important because a steady share price means that it is amazing that wall street tolerates being dumped on and keeps placing large enough bids to absorb the constant sell pressure from an open spigot of unlimited authorized shares to create. even a moderate down trend is okay since the employees are dumping shares monthly instead of stuck a long for the ride for at least a year. rising share prices just being icing on the cake.

That still means the company is toast. You're basically arguing that companies were way overpaying for their employees, and their stock price was inflated to begin with. The stock should still go down in that case.

I'm not arguing that at all. I am recognizing the psychology in the macroeconomic environment and helping you understand why you are on the wrong side of the market today.

Acquisitions by large tech companies could [0] be put on hold for now. Even if it's not, there could be a stronger push by antitrust.

[0] https://techcrunch.com/2020/04/28/warren-ocasio-cortez-pande...

I've also heard that large investors are much more cautious about doing large deals right now. I think with all the uncertainty with Covid-19 would mean a major acquisition would be unpredictable.

> This seems like a great time for Amazon or Google to buy Lyft.

and buy what exactly? Uber and Lyft aren't very valuable businesses, especially as their mythical ability to corner the supply (drivers) hasn't materialized at all.

IMHO both of those companies are destined to shut down or survive in a much more limited fashion, as unicorns they make no sense.

The last thing I want to see come out of this pandemic is more consolidation that just makes the strong stronger.

love that this is the top comment on HN and not the fact that 1k people just lost their ability to pay their rent/mortgages, take care of their families, deal with medical costs.

Business value (or lack thereof) of Lyft now is an unknown, worthy of discussion. The things you mentioned are basic facts everyone is acutely aware about, hard to see what does it help restating them.

That way they'd know "We're in this Together" (cue dramatic piano)

Also known as virtue signaling. I am sure it is helpful to all those laid off people to know there are readers on Hacker News talking about them.

I was just laid off so I can appreciate both sides. On one side I like to discuss tech-business topics, on the other I really feel like the crowd here is a little more callous than it should be. I don't have solutions, just offering an observation.

In fact the top comment is now some partisan bickering! All these smart people and not 10% of them enough foresight to think beyond "the enemy of my enemy is my friend".

Not in the US, but I'm not sure someone unemployed and out of medical insurance can tell much of a difference between "red" and "blue" right now.

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