I would pay a 30% premium to never have to use a regular taxi service again. Surely they can find a way to make this profitable with a reasonable premium.
Might be better if they cannot make it work and pay back all the investments then bankrupt. Another company can replace them with the correct expectations. I would also pay 30% + fair wage. Albeit less frequently. There was no functional taxi service in my metro before Uber and Lyft.
Would you rather them go out of business? Or downsize to only be available in high density, high income areas? I honestly don't see an end game, do you? The hope was that self driving was close and they just needed to capture market until then and then remove their largest line up and print money. Obviously, self-driving is very far away, especially in poor weather.
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.
Yes, these companies should go out of business. They have been losing billions of dollars every year. They have actively subverted the laws. They should not exist in any sane world.
I have already filed a preemptive complaint with the FTC and DOJ requesting they block any merger attempt between Uber and Lyft. I encourage you to do the same.
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.
The point is, if Lyft goes out of business, it has the same effect on the market for rideshare prices as an acquisition does, so why not allow the merger so it's less disruptive and more employees get to keep their jobs?
If Lyft is allowed to go out of business, it doesn't mean Uber necessarily takes over; it means there'll be opportunities for others (including legacy cab associations) to fill the void.
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.
No actually, it doesn't have the same effect, because lyft can simply downsize itself, to only being in profitable areas, which still has positive competitive effects.
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.
The notion that money-losing companies should go out of business isn't extreme. That's mainstream chamber-of-commerce thinking. And that's before we even get to the criminal stuff.
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.
What is probably true is that Uber/Lyft (plus short-term rentals for those willing/able to drive but wanting to forgo car ownership) have made going carless more doable at the margins in some places without incurring huge costs. It's probable in the coming years some people will probably be forced to rethink their lifestyle choices.
If it's a choice between an Uber acquisition and Lyft going out of business, then yes, I definitely would rather Lyft goes out of business. Monopolies are bad for society, so if we're going to end up with one for a while, it should be as small as possible.
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.
Sure. But it will end up a smaller monopoly if it doesn't acquire Lyft. An easy way to check: if Uber offers money for Lyft, that means Uber thinks they'd be better off with Lyft's assets.
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.
I don't think self-driving car companies need users so badly they'd want to acquire Lyft at a premium, because I don't think they could scale their fleet to Lyft's customer base that quickly. However, if the price is right, I could see one doing it.
Isn't that the idea? The ride-share co distinguishes itself by offering (some) driverless rides, and the self-driving company can say it has real passengers. Synergy!
Self driving taxis are the domain of cash-rich and time-rich people. Like an uber it just takes 30% longer to get there on account of the law-abiding nature of the "driver"
Cruise is owned by General Motors which was rumored to be considereding acquiring Lyft late last year. I think given the history between Lyft and GM, it's very possible at this point.
I have taken hundreds of Ubers and Lyfts. They’re both pretty essential to my mobility because I live in a city and don’t own a car. I’m so furious that neither of them really had a plan all along. They were just selling $1.00 for $0.50 and hoping something would change (self driving? monopoly?)
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.
Yup. In DC can companies would refuse to take you home if the destination want in a profitable area and would out right lie about things such as their credit card machine (which they were legally required to have) not working. Uber and to a lesser degree Lyft are slimy companies with no apparent business plan, but what came before was often terrible. +
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.
> Not in Las Vegas, cabs still reign. Sure you can call an uber/lift and wait ten to 15 minutes or hop in a cab that's already there and be on your way.
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.)
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.
It's logical. Better/cheaper taxi-like services are almost certainly not going to lead to more investment in and use of public transit. And while they may be one of a number of factors that let people more easily forgo private car ownership at the margins, it's hard to see it being a huge factor.
“Traffic congestion since the companies' introductions in urban areas is up by 0.9% and the duration of a jam increased 4.5%” less than 1% increase hardly seems significant when compared to other things that are increasing traffic.
> They made public transit a non-option for the affluent.
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).
So were you willing to pay $1 or $2 for your ride? And, more importantly, were all your friends? Thtat's the thing with all these services. People need to be willing to pay what they cost to deliver.
Ultimately these aren't tech businesses, it (should be) a pretty low margin commodity business of basically taxi dispatch and if we had functional cities most of that wouldn't be needed because of public transportation.
I can't think of a city with functional public transportation that doesn't have a taxi service. (I'm sure someone will come along and post one, which will be an interesting bit of trivia, but every city I can think of with good public transport also has some kind of taxi/close-equivalent service.)
Sure, but it’s a question of relative size and importance. There’s probably always a use for some taxis, but you’re going to need more the worse the public transport system is.
It's not clear as a general statement. Manhattan has a pretty decent public transit system but there are also a huge number of taxis because the combination of the density and the subway system means relatively fewer residents own cars relative to more spread out cities without decent public transit.
Just looking at the stock price graph over the last few years, where it has fallen nearly 90%, they might be glad to have their misery put to an end. Remember that market price is what you can get for selling a small number of shares. But the companies that own large blocks may not be able to exit their positions in the normal market without taking a further loss.
It’s a liquid stock. You can sell it right now. There’s no world where you hope for it to get bought at less than the current market price but don’t think it makes sense to sell your holdings at the current price.
This is true even if the selling of your holdings causes the market price to drop.
The top 10 Lyft shareholders between them own 38.2% of the company. The single largest shareholder alone has 13.3%. Is your serious belief that the top shareholder can just go out and sell their 49,198,218 shares and get the current market price for each one?
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?"
Is your serious belief that people can only buy or sell their entire collection of shares as one unit? Because that’s the only way your post makes any sense.
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.
That's not the case at all. You're presuming a level of liquidity that just isn't there. You're also presuming that nobody pays attention to a large shareholder selling lots of stock. But these number are public. If a major Twitter shareholder starts selling things off, even if they do it slow enough that the price doesn't fall too far right way, people will notice, taking at a signal that the major shareholder has a good reason to sell, thus causing the price to drop.
These large shareholders might be quite happy to have a way out without taking further losses, even if it doesn't mean further gains.
I don’t know what to say other than that you’re wrong. you can easily sell lyft shares. The public generally does not know who holds lyft shares or when they’re sold or care when they do. The only exception to this is those with insider information. But even then most people don’t care.
You can easily sell a few Lyft shares. You cannot easily sell a billion dollars worth of Lyft shares because the market is not liquid enough for that. If you seriously think there's somebody out there with that kind of money just waiting to buy at current market price, please say who you think they are, because I believe they don't exist.
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.
You’re doing that thing again where you imply there is no middle ground between a few shares and a billion dollars worth of shares. It’s a dumb straw man.
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.
Somebody who owns a large percentage of a company is not "a random shareholder".
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 do not care what happens to the rideshare business, but I am worried about Motivate and all of the systems that they operate. Capital Bikeshare is one of the reasons why my monthly transportation costs are less than $50.
This is a chronically unprofitable company and anyone who bought at the IPO price has just been exit liquidity. The VCs and founders who cashed out on IPO day are the only winners in this failure.
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]
> This is a chronically unprofitable company and anyone who bought at the IPO price has just been exit liquidity. The VCs and founders who cashed out on IPO day are the only winners in this failure.
> 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.
74 comments
[ 4.3 ms ] story [ 151 ms ] threadUber‘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.
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.
https://www.ftc.gov/enforcement/report-antitrust-violation
https://www.justice.gov/atr/citizen-complaint-center
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.
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.
Current market cap: $3 billion
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).
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.
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]
[0] https://news.ycombinator.com/item?id=21328967
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.
$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.