
Lyft raises $500M - smb06
http://www.cnbc.com/2017/04/06/lyft-funding-round-valuation-update-500-million-round-amid-turmoil-at-uber.html
======
brentm
The valuation difference between Uber & Lyft is staggering. Based only on
brand recognition and valuation Lyft seems like the better investment today.
Lyft's biggest risk is probably Uber's ability to withstand losses that would
kill almost any other company but Lyft has refused to die. They might be the
surprise leader out of those two companies 10 years from now. Unless Uber has
made great gains in their profitability they seem likely to be messy on the
public markets which will lead to all kinds of problems.

~~~
pisarzp
You can't forget the difference in scale. Lyft is only in USA, while Uber is a
global company. For them to enter Europe/Asia now, would mean tremendous
investment.

~~~
aetherson
Tremendous investment towards very uncertain results. Asia in particular --
what exactly is the point of investing in Asia? Uber got kicked out of China,
and besides Japan, what other market is really worth investing in there for a
company that constantly struggles with unit margins?

I think I agree that Lyft is the better opportunity right now to Uber based on
valuations -- while Lyft is clearly the less valuable company, it's hard for
me to believe that it's _10x_ less valuable. 5x? Sure. But that makes Lyft
twice as good an opportunity as Uber.

Unfortunately, I think that both companies are most likely doomed. Uber almost
certainly, Lyft maybe a little less certainly. There really isn't much sign
that there's a $7B business in ride sharing, much less a $70B business.

~~~
tuna-piano
I did some quick math on GDP numbers by country, just making the very rough
(and I'm sure incorrect) assumption that Uber will take a similar percent of
each countries total spending.

I originally wanted to argue against you, by saying that Asia has some very
large and fast growing non-China/Japan countries... but I'm not sure the data
shows that. US+EU is $35T total GDP. The largest non-China/Japan Asian
economies, India+Indonesia+South Korea+Taiwan+Thailand+Hong
Kong+Phillipines+Malaysia is ~$7T[1]. Is it worth all the risk and effort to
add only 20% of your potential business?

Maybe, and those countries do have higher GDP growth rates[2]. But given the
small market sizes, difference in laws, and substantial local competitors
(especially Grab), it doesn't seem like being in Asia should increase Uber's
worth by a large multiple, relative to Lyft. That said, if being in Asia is
responsible for 20% of Uber's valuation, that is still a gigantic $14B, larger
than many fortune 500 companies.

[1]-[https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_\(nominal\))

[2]
[https://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_...](https://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_growth_rate)

~~~
edwinnathaniel
There are probably a few large markets in Asia: China, India, and Indonesia.
The rest don't have as many human beings as these 3 countries.

Both Go-Jek (Indonesia) and Grab have raised huge capital in the last 5 years
or so.

Go-Jek seems to be the leader in Indonesia as they've also expanded their
capability to food delivery, document delivery, payment gateway, etc (they're
becoming more like WeChat minus the chatting/social network aspect)

I have my doubt that Uber in Indonesian will provide significant return to HQ.
Uber currently is in 3rd place after Go-Jek and Grab.

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lacampbell
A good time for lyft to take advantage of all of ubers bad press. It seems
pretty clear that ride-sharing is here to stay but uber may not be.

~~~
aantix
Uber vs Lyft sort of reminds me of the old Digg vs Reddit rivalry.

Digg had all of the attention (and marketshare), got courted with a few
acquisition offers and ends up flaming out...

And in the background is Reddit, just plugging away, doing what it does best
and long term, ends up being more influential.

~~~
JimboOmega
Uber hasn't had any scandals that really impact the rider experience, though.
They certainly always could ruin their product with useless features, but so
far they haven't.

~~~
patrickthebold
It's so easy to switch apps, and most drivers have both, so some people (at
least me) will switch just because of the bad press, on principle.

~~~
nojvek
I already did that. Wait time is same and Lyft sometimes comes out to be
cheaper. Uber doesn't have any competitive advantage in my view. Also their
recent sexual discrimination, Waymo vs Uber case and not applying licence in
California speaks volumes that playing dirty is in the DNA.

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askafriend
How pronounced do y'all think the capital vacuum effect is? Do these constant
and large raises by Uber/Lyft have a meaningful effect on other ventures
getting funded?

~~~
hkmurakami
I'd think of it from the inverse perspective. If they weren't continuing to be
funded, with the preponderance of opinion pieces on their questionable unit
economics, then we'd certainly have a negative effect on overall fundraising
sentiment.

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euske
There's a recent NPR podcast interviewing John Zimmer, one of the Lyft
founders: [http://www.npr.org/series/490248027/how-i-built-
this](http://www.npr.org/series/490248027/how-i-built-this)

Sounded like he's a pretty straight person. I liked it.

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iblaine
Uber has raised $2B and is valued at $7.5B. I guess that is ok. At such a low
multiple, does that imply employees are getting diluted more than normal?

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hobonumber1
You mean Lyft.

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MegaButts
What does this make the runway for Lyft?

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shaohua
[http://www.cnbc.com/2017/04/06/lyft-funding-round-
valuation-...](http://www.cnbc.com/2017/04/06/lyft-funding-round-valuation-
update-500-million-round-amid-turmoil-at-uber.html)

~~~
dang
Thanks. We changed the URL from
[https://www.ft.com/content/c5a5eb26-ab85-39c7-9dcf-2bf825c2f...](https://www.ft.com/content/c5a5eb26-ab85-39c7-9dcf-2bf825c2f87c).

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rodionos
To mods: it would be great if paywalled content was marked as such as part of
the title, similar to [video] etc. It would have saved users a bunch clicks.

~~~
ridruejo
Click on the "Web" link next to the story. Will take you to Google and from
there is free

~~~
devy
No it still didn't work for me. I think I burst out their free article quota
for the month.

~~~
frgtpsswrdlame
Try the google cache version. It usually works for me on ft.

[https://webcache.googleusercontent.com/search?q=cache:XCaMdJ...](https://webcache.googleusercontent.com/search?q=cache:XCaMdJeVUagJ:https://www.ft.com/content/c5a5eb26-ab85-39c7-9dcf-2bf825c2f87c+&cd=2&hl=en&ct=clnk&gl=us)

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sebleon
Uber has made some tremendous progress towards offering self-driving cars,
which completely changes the economics of ride sharing.

Lyft might be quietly making moves in this direction too, but I'd worry about
their ability to stay competitive without an aggressive self-driving
initiative.

~~~
aetherson
A ton of companies are working on self-driving cars, including many companies
that are:

a. Bigger than Uber.

b. Have actual profitable businesses that they can use to fund their research.

I have never seen any kind of evidence that Uber will either be the first to
market with true self-driving cars, or that their self-driving cars will be
superior in kind to their competitors. The closest thing to evidence that I've
ever seen anyone provide that Uber self-driving cars are going to have any
advantages to their many rivals is "this is an existential issue to Uber."

Companies fail all the time. This is pretty strong evidence that "existential
problems" are not guaranteed to be solvable ones.

~~~
sebleon
Evidence: Uber is already deploying self driving cars in multiple cities as
part of the car sharing network.

~~~
aetherson
And Tesla is already deploying self driving cars in far larger numbers of
cities as part of the "own a goddamn Tesla" network.

We have ample evidence that Uber's self-driving cars require human
intervention orders of magnitude more frequently than Waymo's. The fact that
they're using human-driven cars with self-driving assist in a vaguely
commercial manner is a marketing tactic, not a statement of technological
proficiency.

~~~
sebleon
Could you link me to that ample evidence you speak of?

On-demand car sharing is the future, making Tesla's consumer car ownership
model outdated. Uber is 5-7 years ahead of Tesla on the operations side of
managing and deploying a fleet.

~~~
nojvek
It's way easier for Tesla to start an self driving fleet with an App than Uber
to get into car manufacturing.

Lyft partners with GM that acquired Cruise and their tech is solid. They are
making cars will all the sensors built in, not add-ons like Uber.

Also Uber is losing a shit ton of money. Tesla is not profitable but doesn't
bleed that much money.

Depending on how Waymo vs Uber goes, Uber may have to shut down their self
driving car program temporarily. Stealing 40,000 files is ridiculous.

Add that to fact that they didn't get a proper licence so they don't have to
report crashes and their self driving car crashed pretty bad.

Uber is a risky bet.

~~~
sebleon
Those are interesting points! Regarding autonomous car technology, since
there's so many people working on it, it seems like it may get commoditized
soon. If that's the case, being an OEM that supplies the car sharing networks
seems like a low margin business, owning the customer relationship is likely
to be more profitable. the operational chops to run an efficient fleet might
be in shorter supply...

right, uber might have to shutdown its autonomous car program, or it may just
settle with google and move on with life...

Uber has a proper license to run in sf again

Uber is absolutely a risky bet. But if they succeed, they may eclipse the car
ownership market and get 10x bigger

