Lyft CEO David Risher reportedly says company is 'open' to acquisition offers
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Also, I don't think "regard for drivers" can go much lower. I do agree that their pay would suffer post merger as they lost the need to be even remotely competitive but I think there is a lower limit where drivers won't drive for net $3/hour.
A merger would bolster the remaining enterprise's market power, and they're going to shed redundant jobs anyway in a merger ("efficiencies"). Better to let both continue to exist with razor thin margins, like supermarkets. The only stakeholder that benefits from consolidation is shareholders.
If Lyft dies, if anything it'll spook investors about Uber's prospects given that market forces would have led to the demise of a direct competitor. If the two merge, investors will instead be motivated to bolster the combined firm.
FTEs that work in the corporate office and have gone through a 25% and an unspecified "performance" reduction in force?
Merging the two companies would result in many redundancies that would be eliminated.
Uber has about 32,000 employees(?! https://stockanalysis.com/stocks/uber/employees/ ). Lyft has about 3000.
I doubt that any M&A of Lyft into Uber would result in Uber being 35,000 employees for long.
For the drivers, many work for both ("But even though Uber is the dominant player among drivers, that doesn’t mean there’s a whole lot of driver loyalty. Nearly 80% of drivers have actually signed up for 2 or more services with Lyft, Postmates, the DoorDash driver sign up bonus, UberEats and Amazon Flex, all siphoning drivers away from Uber." https://therideshareguy.com/uber-driver-survey/ ) and so removing Lyft as an option isn't as impactful to the market. If a given city has the demand for N drivers - it doesn't matter too much if that's split across multiple services or not other than passenger preference.
It probably would impact the cost for passengers since there would be less competition, but that happens in either case of Uber acquiring Lyft or Lyft folding.
Hey, then there's people like me who have relied on Lyft and Uber for years because we don't drive. Even in a city like SF, there are places that are hard to reach without a car.
What's fooled you here is that you've been on the receiving end of a subsidy for a long time. I promise that people got around SF before Uber appeared, and they'll be getting around after it's gone.
I think the end game for this industry is, as you say, self-driving cars, but I agree that's far away. In the meantime, I think the stage after this one, which is where companies burnt cheap money in hopes of market domination, is one where the tooling becomes available in a white-label fashion and we see plenty of people starting taxi-ish businesses.
If lyft died today I'd bet uber would capture most of its market.
The death of Lyft also provides more opportunity for small players to enter the market or expand, because more of the current riders and drivers will look for other options than if they're just folded into Uber.
Or they knew self-driving was probably a long shot but who cares as long as you can get investor dollars and pay yourself handsomely.
Uber‘a model basically revolves around people not being able to do the calculus of driving for ride share. And Lyft is just a smaller player.
I don’t see how they survive if they need to make dollars and not just valuation numbers.
I've no idea if Cruise could afford it, I think it's in the realm of possibility with a quick Google, but that's my pitch.
$100 says Amazon will snap them up. With the cloud expenses minimized, and Amazon's own expertise with logistics, it would be a good market for them.
After years of Lyft predicting profits quarter after quarter, we have given Lyft enough time and it seems they are on course to be either acquired by private equity or at worse case, filing for bankruptcy.
I mean, it wasn't really a surprise to see this go all the way down...[0]
So... They are a success story?
You basically described the whole startup grift.
I've already explained who's success story it is:
> The VCs and founders who cashed out on IPO day are the only winners in this failure.
For the rest of retail and new investors:
> ...anyone who bought at the IPO price has just been exit liquidity.
A business that has constantly raised VC cash before IPO and now still remains chronically unprofitable even after IPO and has being loaned more post-IPO debt doesn't seem to be a great business success story for the new investors holding the stock since it IPO'd.
> You basically described the whole startup grift.
Indeed. Let's see if any of these new startups will get access to VC cash whilst as easily as the old ones did, especially as most of them are still unprofitable.
Current market cap: $3 billion
This is true even if the selling of your holdings causes the market price to drop.
Who exactly do you think is hanging around with a half-billion in cash thinking "Gosh, Lyft would be a good buy if it were one cent lower, but it's not good enough for me to buy right now?"
If you own $1B shares of Lyft, and you think it would be great to sell them for less than X, you’d be pretty dumb for not selling whatever you can at X. The fact that they are not doing this suggests they would not be happy to sell for less than X.
These large shareholders might be quite happy to have a way out without taking further losses, even if it doesn't mean further gains.
The major shareholders of Lyft are absolutely known, and that's because federal law requires disclosure from everybody over 5%. And I promise you that people who have or who are thinking about taking a serious position in Lyft pay attention to what they're doing.
An obvious example here is Musk's shenanigans with the Twitter acquisition. He was required to declare his stake publicly, which bumped the stock price. When things weren't going his way, he threatened to dump his whole stake at once, the implication being that the stock price would drop precipitously as he burned through the order book, causing much sadness among remaining investors.
Elon musk saying he would sell his shares because he was backing out of an agreement to purchase those shares at an inflated price is obviously going to drop the price. This is not the same thing as a random shareholder who happens to own stocks and wants to divest some.
If you want to sell all your shares for X, you’d be an idiot for not selling some of them for more than X. This is not difficult to understand.
Acquisition offers for less than market value are extremely rare, absent non public information. They are called takeunders. They generally only happen when a company is on deaths door. Which lyft is not. It would be seen as really dumb to offer less than market value in an acquisition bid. Stop making up rhetoric as if this were a normal reasonable thing to do. It’s not.
Your simple-minded models work for random shareholders, but not for people who own significant fractions. They're playing a different game. They can't exit without moving the market. Their actions are tracked by other players, who will treat it as material information. Liquidity is not some magic reservoir; it's composed of individuals with fixed sums of money making trading decisions.
I will take your continued inability to name anybody who would buy a major stake in Lyft at market price as an admission that you agree there's nobody like that.
Since you claim to be concerned about straw men, I'll point out that I never suggested "this were a normal reasonable thing to do". You asked why somebody might take an offer that didn't have a premium, one that "won’t be higher than the current stock price". I explained why Lyft's current shareholders might do that. That's all.
I’ve started trying to avoid ride share whenever possible but it’s too late. They put the cabs out of business. They snarled our cities in traffic. They made public transit a non-option for the affluent. And maybe worst of all they changed how we plan our days. People expect you can always just “hop in an Uber” to get across the city at a moments notice, there’s no patience anymore.
And now they’re both charging more and more for rides and still failing to make enough money to cover their corporate overhead. Which is pathetic, since they don’t own the cars or employ the drivers. Meanwhile the drivers name make less and less and the smarter/luckier ones find something better to do.
When we look back and write the history of this time, I hope we see them as city destroyers.
That was inevitable. The taxi companies had a horrible experience for arranging a ride, ride quality, agreeing on price, and paying.
The last time I decided to take a taxi instead of Uber I was reminded that not only was this option much more expensive, but all of the same issues I listed still exist.
Sometimes it really is a cartel.
which, when I said “oh sorry I don’t have cash. Since you are required to take cards you come see me later when it’s working” miraculously fixed themselves
+ Not every where. Taxis in some cities offered and offer a fine experience, but I’d say 70+% were pretty annoying to deal with.
Only at strip casinos and the airport. If you're the slightest bit off-strip, Uber/Lyft is dominant. (Source: I live in Henderson, and use Uber constantly.)
Would like to see the data backing this claim up.
But intuitively it's not surprising. Imagine a world without rideshare, but where the taxi companies just got way better, dropping prices and improving service. Use would go up. People who were driving before were either going to keep driving or user rideshare. Some transit trips would switch. A bunch of new trips would happen because the bar is lower. More trips means more traffic, and the areas where rideshare is most popular were not exactly known for low traffic before.
Well, first off, I’m in the US occasionally (SF and Seattle) and no-one has ever demanded proof of non-affluence to get on a bus :)
But also, most of Europe has Uber (it’s effectively banned in a couple of countries, including here) and yet the upper-middle-class use public transport. Any reluctance in the US is probably based on other factors (my limited experience with US public transport is that it is rarely great, and doesn’t seem to believe in schedules at all, so I can see why people who can might avoid it).