
Lyft Files to Raise as Much as $1B - adoming3
http://techcrunch.com/2015/12/21/lyft-files-to-raise-as-much-as-1-billion/
======
tswartz
>Amid reports of Lyft’s financial struggles in its recently leaked financials,
it’s obvious why the company seeks to raise so much money — the on-demand
transportation market is a tough place to operate, especially with competition
like Uber. According to Bloomberg, the ridesharing startup took a net loss of
$127 million in the first half of this year while bringing in less than $47
million in revenue.

Does anybody know how this loss compares to Uber? I don't recall any of their
financials being leaked recently.

~~~
argonaut
Uber loses at least $470M / year, if not more (unsure if the number is per
quarter, half-year, or full year) [1].

Lyft's struggles have nothing to do with their losses, and all to do with the
fact that they're losing the market to Uber.

[1] [http://www.businessinsider.com/uber-reportedly-operating-
at-...](http://www.businessinsider.com/uber-reportedly-operating-
at-a-470-million-loss-2015-6)

~~~
HappyTypist
Uber _lost_ 470m/period. As the article mentions, these figures are outdated
by a number of years and completely irrelevant - Uber is hitting more than 2.5
billion in revenue (commission) this year.

According to public information, Lyft is losing approximately 3 to 5 times the
amount of money _per ride_.

~~~
argonaut
If those numbers are indeed out of date (I'm not taking an Uber spokesperson's
word for it), I would be inclined to believe they are losing _even more_ than
$470M/period, given their extremely aggressive expansion and extremely
aggressive fundraising.

~~~
HappyTypist
In China, yes, but recent Uber aggression has been anything but aggressive.
Just look at driver referral incentives been slashed from $750 to $200 (if
you're lucky).

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msoad
Taxi fare is something everyone wants to save on. Once Uber and Lyft start
making big margin on their service other low key and smaller companies can
compete with them. Pretty much like airfare. Price is the king and low cost
companies are doing a lot of business. I'm not sure how this Uber/Lyft story
will end but I'm pretty sure it's not going to end like Facebook or Google.

~~~
brianwawok
Unless one brings robot taxis. Lowest price and highest profits.

Right now it's just an app for taxis. But robots totally flip the market on
head.

~~~
raz32dust
I don't see how this will fly even with robot taxis. Not for too long at
least. I think self driving cars will be commoditized easily. Any new player
can simply leverage the technology. The economy of scale is simply not there
in this business, compared to the leverage Google and Facebook have. There is
hardly any network effect, and it is still highly capital intensive even with
robot cars. So while they may succeed in being and maintaining their status as
multi-billion dollar companies, I am not seeing how they can go much further
in the long run.

~~~
madebylaw
Completely disagree regarding the network effect of Uber vs. Lyft. The system
is highly network dependent. Most Uber drivers would prefer to drive for Lyft
because Lyft pays more (partially why they're losing more money than Uber),
but in most markets Lyft doesn't have as many riders that use the service. As
a driver, you want to maximize time spent with a fare vs. fare-hunting.
Similarly, as a rider, you are weighing price vs. time meaning most people
will pay more $ to wait less for their ride.

Most drivers I talk to drive for both and keep both on, but get more pings on
Uber than on Lyft. In SF Lyft has more mind-share and it's a more even split.

FWIW I've lived in both SF and NYC since the rise of these services.

~~~
raz32dust
But that type of network effect is easily undermined by a service that offers
cheaper fares. I saw this happen first-hand in India where Ola cabs, which was
being used by almost everyone, quickly started losing users to Uber once Uber
started their massive discounts and promotion series in India.

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danso
How big is the gap between Lyft and Uber in India and China and other large
Asian markets? In China, is there a state-favored rival [1] that could just
shut out both? From an American perspective, it's hard to imagine Lyft
overcoming Uber's lead...but maybe it's a sensible investment if Lyft has a
strong chance of being bought by an Asian company?

[1] edit: Found this Fortune article, which describes Didi-Kuaidi as the "Uber
of China" with 1 million drivers versus Uber's 100,000 drivers. Also, Didi is
an investor in Lyft: [http://fortune.com/2015/09/30/will-china-be-ubers-
waterloo/](http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/)

~~~
yueq
Uber has very little chance to win China market considering competition from
Didi which is backed by Tencent and Alibaba. Considering the insurmountable
dominance of Tencent's Wechat and Alibaba's AliPay on mobile phones in Chinese
market.

Some reports that Didi has 80+% market in China and Uber gets 10+%.

~~~
xiaoma
Baidu was a strategic investor in Uber, and they lead another $1.2B round a
couple of months ago. Both companies have local giants backing them, so
anything can happen. If I had to bet, though, I'd bet on Uber winning in China
if they can win enough of the rest of the world.

[http://techcrunch.com/2015/09/07/uber-confirms-its-
raised-1-...](http://techcrunch.com/2015/09/07/uber-confirms-its-
raised-1-2b-more-in-china-led-by-baidu-as-rival-didi-kuaidi-gets-3b/)

~~~
yueq
I know this but BIDU is leaving first tier internet companies in China. This
can be seen from its market cap which is almost a third of alibaba or tencent.

No matter what you bet -- you should always bet on something you can control
not others.

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danieltillett
If they actually manage to raise this amount of money then an amazing amount
of capital is going to be destroyed over the next couple of years. Uber and
Lyft going head to head to try and grab a monopoly is an extremely effective
way for investors to lose a truck load of money.

~~~
OmarIsmail
"Destroyed" is an unfortunate term to use. The drivers and riders will benefit
who are predominantly not rich, so its actually a kind of stimulus.

~~~
codyb
Maybe not rich but a lot of the lower income people in my neighborhood in
Brooklyn aren't using Uber or Lyft regardless of how cheap because they don't
have much money period. You have to have a phone and internet access for these
services so it's definitely not hitting the lowest brackets.

~~~
mrcrassic
Do you have data to support this? I too live in Brooklyn and have found the
opposite to be true.

~~~
jakeva
Brooklyn is a big place, and the person you're replying to did just say his
neighborhood… probably little data available on any scale let alone the scale
of one's neighborhood, aside from anecdotal.

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mdc2161
Well I guess that could explain the 50% off rides promo they've been running
in NYC for the past 6 weeks. Seems like every Sunday I get a push notification
that it is extended.

~~~
cballard
I wish Apple would actually ban APNS spammers. Yelp does it too ("Yelp Weekly"
or something).

~~~
tim333
Settings -> Notifications -> off?

~~~
cballard
No, that's not an acceptable solution. Spammers should be banned. But I
actually wasn't strong enough:

[https://developer.apple.com/app-
store/review/guidelines/#pus...](https://developer.apple.com/app-
store/review/guidelines/#push-notifications)

By section 5.6, Lyft should be removed from the App Store. I wish they'd do
it!

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tbrock
As an adult I don't want to get into a car with a huge pink mustache on it.

Get over myself? Sure, but the brand is terrible.

~~~
lucasmullens
They've backed away heavily from the mustache.

~~~
deelowe
Its a magnet now, but there's still a mustache on the car and it still looks
stupid as hell.

