
Alphabet considers Lyft investment of about $1B - coloneltcb
https://www.bloomberg.com/news/articles/2017-09-14/alphabet-is-said-to-consider-lyft-investment-of-about-1-billion
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Bahamut
It’s interesting to see Lyft doing well here - the news was quite bad for Lyft
it seemed just a year ago or so, with Uber dominating headlines and in users’
minds of those inclined to use ride sharing as well as such rumors circulating
such as Lyft failing to find a buyer. Fast forward after numerous gaffes on
Uber’s side including the former CEO, and there seems to be a lot of good will
that has shifted to Lyft. Doesn’t necessarily mean Lyft will thrive, but it
looks a lot more promising than a year ago.

~~~
ng12
The level of differentiation is so small I don't think much of that matters.
At the end of the day I care about getting from point A to be point B. Which
service I use just depends on which app I feel like opening.

~~~
dheera
I regularly find Lyft to be more than twice the price of Uber. That price
difference makes quite a difference to me, honestly.

~~~
truncate
On top of that I get a monthly Uber pass for $12. Gives me unlimited rides at
fixed price of $3.50 withing 20 miles radius or so.

~~~
dx034
How can that be profitable for uber? Never heard of that pass before but
sounds like an awful idea for them (and a great idea for commuters with a
15-20 mile commute). Having a private driver and no costs for a car for ~$160
per month is cheaper than just the car when you drive yourself.

Would love them to introduce that in London, the price would be the same as
for a tube season ticket.

~~~
brianwawok
I suspect to build a steady base of pool rides. Once the market stabilizes
they can dump the promo and keep the pool drivers busy.

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SilasX
To address the elephant in the room:

>Alphabet is also an Uber shareholder through its GV venture capital arm, but
Waymo, a unit of Alphabet, is currently suing Uber over self-driving car
technology. As the relationship has deteriorated, Waymo signed a partnership
with Lyft to work together on testing autonomous vehicles.

~~~
Fricken
>Uber is advancing on an investment from SoftBank Group Corp. and others of as
much as $12 billion, most of which would allow existing shareholders to cash
out.

These two events don't seem unrelated, there appears to be a big shuffle-up
going on. GV must be one of the shareholders looking to cash out of Uber.

Google ventures was part of a 258 million dollar investment round in Uber in
2013, and it's anybody's guess as to what that's worth today with the
complexities of Uber finances.

Alphabet subsidiary Waymo announced a partnership with Lyft in May, though the
particulars of that partnership were vague.

~~~
msoad
Interesting observation! It makes total sense!

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stanmancan
What's the game plan here? Burn investors money by offering cheap rides
until...self driving cars can take over? It seems Uber and Lyft are both
heavily subsidizing the actual cost of the ride and paying for that out of
pocket. I use both services (Lyft preferably) when travelling to a country
with drivers, and I'm not sure I've ever paid full price for a ride. "$25
credit" "50% off" "half price all weekend" promos seem to be coming in
constantly.

Is either company building a viable business? Or will usage sharply drop off
once they have to eventually charge a realistic rate for a ride? Or are the
drivers just a temporary casualty and the plan is to get rid of them
completely ASAP?

~~~
eganist
Uber subsidizes some rides even without discounts. Just a few nights ago I
paid ~$17 for a pool ride where 1) I was the only passenger the entire length
of the ride and 2) the driver was paid ~$21.

~~~
rb808
presumably that is balanced by the times when there are two riders paying $17
and the driver is paid $21.

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jondubois
It's strange when companies leak that kind of information before a deal has
been signed. It sounds desperate... Like if that will increase the pressure on
Google to follow through with the deal... Or maybe it's also to incentivize
prospective investors to sign over their funds to Lyft.

To me it reads like a warning sign that Lyft desperately needs money.

~~~
viridian
I think you've hit the nail on the head here. I don't think it's a surprise to
anyone that Lyft needs money. Both Lyft and Uber are operating at a big loss,
and Lyft has been bleeding drivers over to Uber for the last couple of months
if the user surveys from /r/lyft and /r/uber on reddit are any thing to go by.

If someone in Lyft management thinks that this leak will help twist Alphabet's
arm even a little, of course they are going to leak it.

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danblick
I've been thinking a little about the economics of self driving cars and it
seems to make sense that they'd seek a partnership with a ride sharing
service. While I guess the eventual goal could be "a self driving car in every
garage", you'd probably pay for more for one if (1) you're using it all the
time (high utilization), and (2) it introduces some other kind of savings
(like not having to pay a driver). Consumers have neither really but
taxi/trucking companies would have both. I guess it's a question of how much
the hardware is really going to cost. Does anybody know of publications that
talk about the economics here?

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reilly3000
I think the end game is more like the end of individual car ownership in
cities. Company-owned or ideally(!!!) municiple fleets would be much more
efficient in that idle time and parking would fade away.

~~~
simonh
I agree that's the end-game but recently I've revised my expected timetable.

I fully expected that my daughters, now 12 and 13, might never need to own
cars. My wife even thinks they may never need to learn to drive. I now think
that's unrealistic. It's true that for 95%+ of most journeys, self driving
cars would be fine, but that last 5% or less really matters even if for only a
minority of journeys. Finding a parking space can be very hard and our current
streets, curbs and driveways aren't designed for self-driving vehicles. Rural
settings can also be highly challenging.

I think the big changes initially will be road haulage because companies can
re-engineer pickup and drop-off points to be highly autonomous friendly and
automated. Next will be companies like Uber and Lyft providing driverless cabs
from and to designated points. Then a gradual demographic trend to less car
ownership, but driverless cars for the masses are going to take at least a
decade to come IMHO. The last 10m is really tough in too many common
scenarios.

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elguyosupremo
I agree that the last 10 meters is going to be one of the harder things to
solve, but i think you'll see people building calibrated parking spots into
their driveways (some way of teaching the car how to get there from the road)
and perhaps even companies doing the same with their parking lots and then
publishing the details online. As self driving cars become more ubiquitous
there will be companies that spring up to precision map places and feed that
data into whatever databases the cars use.

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KKKKkkkk1
To my knowledge, the background check that Lyft has for its drivers is so lax
that people can drive without having a social security number. I'm wondering
how many undocumented drivers are working for Lyft as opposed to Uber, and how
this squares with their squeaky-clean image.

~~~
ballenf
Seriously, you're worried about whether they might be undocumented? If Lyft
has Lax background checks that would have me worried more about my safety and
less about immigration issues.

Are these lax checks something you know firsthand or have read somewhere?

~~~
KKKKkkkk1
I'm not worried about them being undocumented. What bothers me is that a
company that claims to follow the law to a T and uses that as a marketing
point contributes to violations of US immigration law.

(I know a guy who has driven for Lyft for months while he had a tourist visa.
He entered an all-zeros SSN when he registered, and they never followed up.)

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nsoldiac
the "L" in the alphabet puzzle?

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elvirs
Glad to hear this, I hope lyft uses the funds to get more drivers on board and
advertise to more passengers. Lyft is transparent about its cut which is flat
25% while uber is being a total scam sometimes keeping up to 55% of the fare
to itself.

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whataretensors
I hope someone will combine decentralized currency with ride-sharing, such
that the car owner gets a much higher percentage of the profits and the rider
pays less. A small amount can also go to the app writer, who would be using
the shared decentralized backend(such that multiple apps could share the same
decentralized data store).

Once self-driving arrives each transaction could be a barter based on source
and destination locations, along with the self-driving car's specific
schedule. An intelligent network may emerge, where specific rides are cheaper
for a car that needs to go to the specified area of town.

You could further augment costs by allowing the self-driving car to manage
it's own energy supply.

I realize there are downsides to be thought through and the technology is
nowhere near ready for this idea.

~~~
CydeWeys
What does the decentralized currency add to it? Why/how would drivers get a
larger percentage of the fare, in combination with the rider paying less?
Right now ridesharing is cheap because it's partially subsidized; prices would
go up if you stop doing that.

~~~
quickthrower2
Centralised currency requires a bank like entity to transfer money from
customer to driver. That forces the app to be centralised and one run by a
unicorn. Small players will get fleeced on txn charges.

A decentralised app (or apps) could work on a protocol and use bitcoin and the
margins can be squeezed to almost zero as there are lots of competing apps,
providers and aggregators etc.

Think: like airlines. Only _without_ the luxury/economy differentiation that
exists in that industry.

Ridesharing is subsidized right now but that can't last forever, right?

~~~
CydeWeys
Transaction costs are an insignificantly small part of what it costs to run an
Uber or a Lyft. Most of their costs go to employee salaries (including
developers and customer support) and hosting fees.

I don't understand what using a decentralized currency would really change.
Uber or Lyft could very easily add decentralized currencies as payment options
in their apps now. It wouldn't change anything about the fundamental nature of
the business other than you'd have another payment option. They still have to
pay their software engineers, etc.

As for this theoretical decentralized app, who writes it? Who pays to run the
servers? If I have a problem with my ride, who is the arbiter?

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piyushpr134
Lyft will be the first taxi company with self driving cars at scale. With this
investment, they won’t bother with other markets till they have US sorted out.

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pishpash
Enemy of my enemy ...

~~~
quickthrower2
Is non-commutitivity.

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ulfw
After having invested $300MM in Uber, this is an interesting diversification
strategy.

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Kiro
How is Lyft any better than Uber?

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sschueller
[http://www.uberscandals.org](http://www.uberscandals.org)

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SN76477
Uber seem like such dickheads, I uninstalled it and used Lyft exclusively.

Good for them.

~~~
dogruck
Certainly your prerogative. But you're in coalition with the tiny minority who
stopped flying United after the Chicago PD yanked the guy off a flight.

~~~
freyir
Regardless of Uber or United, what's your point? If everybody else turns a
blind eye to bad behavior, we might as well abandon our own principles out of
convenience?

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noncoml
Alphabet by putting its fingers in every possible pie is begging for split-up.

~~~
malandrew
I can't wait for them to be split them up. It could be the EU or the
Republican party that succeeds in making this happen.

~~~
rifung
Why the Republican party? Isn't the Republican party pro free market and
business generally?

~~~
andybak
Interesting that you don't regard breaking up monopolies (if we call Alphabet
that for the sake of argument) as being "pro free market and business".

That's assuming "pro free market" and "pro business" aren't in contradiction
with each other. It rather depends which business one is being "pro" towards.

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grizzles
Alphabet has too much money syndrome. It's a nice problem to have; they
obviously don't have enough good stuff to invest in. Lyft/Uber have no special
sauce. They have a quickly growing revenue stream with dubious profit
potential. That's it. Consumer internet is AlphaGoogle's bread and butter.
They could easily put these guys out of business.

Regulatory concern and Wall Street accounting image management would be the
justification for this kind of deal.

~~~
sumedh
> Lyft/Uber have no special sauce.

So are you saying a new player can easily beat them?

~~~
grizzles
With Google's warchest? Without a doubt. Google could run these guys over with
their unsold inventory alone. Though I imagine that's probably used to prop up
the CPAs of their big buyers. They could also snap their fingers and add a
taxi app to all devices with Google Play Services.

~~~
cjhanks
Not sure why you're being down-voted so harshly. Google already has its own
credit processing, mapping, routing, business management, and it's in nearly
60% of consumer pockets. A built-in (default installed) Android app which
integrated with those services seems poised to make a serious run at market
share. Drivers have no loyalty - better pay always wins. And Google doesn't
need a profit, it needs only break even.

Though, it wouldn't really make sense given their business model. They want to
know where you are, not get you there. If you have an Android phone, they
already have that information. So it seems like an unlikely play.

~~~
mnx
Well... I think the case of google+ shows that it's not that easy to transfer
marketshare between products. Or at least that google is not that great at it.

