But now, they all want to scale down to be profitable.
A small scale Uber or Lyft is just a cab company with an automated dispatch agent. It should be valued like a cab company, not a tech company.
IMO the lines are a little fuzzy and the definition of "tech company" seems to be shifting pretty often to fit a specific narrative.
Like why is Netflix considered a tech company instead of a media company (like Disney or whoever owns Discovery +, AMC, or similar) when all they're doing is producing video content on a streaming service but Uber has to be valued as a taxi company when they produce an app that coordinates movement of people, products, and other things?
I guess part of the problem is everything is "tech" so the term is starting to lose meaning except when we want to No True Scotsman something (not that I'm accusing you of doing that here).
It’s funny that CBS and stuff was a tech company 100 years ago.
Similar is the morph of Google into just a clear channel or other ad company. Search and adtech was hard years ago so they were a tech company. Now they sell ads and data.
My great-grandfather came over from France to work as an "engineer" in the mines of Minnesota. I suspect that for him as for me, the novel technology created an opportunity for quick-on-the-uptake people to make a decent living figuring out the new thing and making it go. But eventually the technology becomes settled and boring, so it's a different thing both in terms of skill and economically.
If you're interested, you might look at Wardley mapping, one axis of which involves technology moving along this axis: Genesis -> Custom Built -> Product -> Utility/Commodity. Also relevant is the technology adoption lifecycle: https://en.wikipedia.org/wiki/Technology_adoption_life_cycle
Before they started making their own content, Netflix was a pure tech company. They pioneered a lot of the streaming technology we now take for granted, and they were the first to solve some very difficult challenges.
Recently the market re-priced Netflix stock to be more like a media company, so reality has caught up.
They were in the business of renting DVDs by mail.
Although, maybe not if all your money goes to AWS anyway...
No, to the best of my knowledge, the push towards autonomy came after they realized that they would struggle to get profitability through scale. Just look at their first pitch deck[1] from 2008, there's no mention of autonomy. They didn't really start pursuing autonomy until around 2015, when they finally started hiring researchers for that[2].
[1]https://techcrunch.com/gallery/here-is-ubers-first-pitch-dec...
Anyone who dared to suggest that the new ride share companies were actually just cab companies feeding off a pump of VC funding were down voted and shouted down into oblivion. Turns out those people were exactly right though...
> But now, they all want to scale down to be profitable.
I am a bit confused by these two statements. In the first, it sounds like you are using "scale" to describe the customer reach and sales volume of the company. In the second, it sounds like you are using "scale" to describe the number of employees.
I agree that Lyft and Uber should not be valued like Google or Meta. Wall Street agrees, as you have surely noticed. But both are much more valuable than a traditional cab company. It is the "automated dispatch agent" you mention which makes them that way and which also requires innovative use of silicon and development of software.
As an aside, were there ever nationwide, publicly traded cab companies in the United States of America? I cannot think of any.
Lyft's stock is down like 70-80%.
So you could argue Uber is actually on the path to achieving that vision and Lyft failed, not that neither should be "valued like a tech company".
> The entire promise of Uber and Lyft was profitability through scale.
Here "scale" means scaling to the entire country/planet. Which, as far as I know, they still are.
> But now, they all want to scale down to be profitable.
Here "scale down" means trimming on employee count where there are inefficiencies.
> A small scale Uber or Lyft is just a cab company with an automated dispatch agent. It should be valued like a cab company, not a tech company.
Here somehow you went back to your first meaning of "scale", but used the layoff = "scale down" to imply they want to scale down to a local cab company. I've yet to see a local cab company has an app that's usable in an entire country instead of just one city.
By the same logic, if Airbnb has layoffs, we should suddenly compare their market valuation to a small local vacation property group that only rents beach houses in Maui or something...
You, sir, are an absolute savage...and correct.
It also doesn't help that Lyft has not been profitable since going public, so if it were valued as a taxi cab company, it would probably have negative enterprise value.