Lyft Files to Raise as Much as $1B

Lyft Files to Raise as Much as $1B(techcrunch.com)

69 points by adoming3 10 years ago | 46 comments

tswartz 10 years ago |

>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.

rtpg 10 years ago | |

I don't remember the details, but I think Uber showed a similar revenue/loss ratio...

There was HN discussion about it and the main thing people were saying is there's an opportunity cost in not spending the money (mainly in expansion).

I kind of feel like Uber is in a bit of a "monopoly or bust" position though, using similar 4X techniques to our former favorite tech boogieman (subsidizing driver rates then removing subsidies once growth stops...).

Not quite sure what Lyft is using its money for, though. My impression is there strategy is to not be jerks and focus on US only for now. Guess this is a "good guys lose" situation...

argonaut 10 years ago | |

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-...

HappyTypist 10 years ago | | |

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 As the article mentions, these figures are outdated by a number of years and completely irrelevant - Uber is hitting more than 2.5 billion in revenue (commission) this year.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

Dwolb 10 years ago | |

As both a Lyft and Uber user, it feels as though Lyft is spending a lot more money to "drive loyalty" than Uber via $50 free promos. But I feel their targeting is off because loyalty doesn't appear to increase with more rides for rider nor driver.

msoad 10 years ago |

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 10 years ago | |

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 10 years ago | | |

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.

jacquesm 10 years ago | | |

Too early. They'll run out of cash long before 'robot taxis' will save their asses.

iiiggglll 10 years ago | | |

> But robots totally flip the market on head.

Yeah, as in people will be able to mod their existing cars to be self-driving and then rent them out AirBnB-style when they aren't using them. There's even a distributed storage system already built to handle that ... people's driveways and garages.

peterwwillis 10 years ago | |

Is it weird to say i'd almost start paying Taxi-level fares again if the drivers would stop sucking at driving so much? This is mainly aimed at Lyft; Uber drivers are much more professional.

danso 10 years ago |

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/

yueq 10 years ago | |

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 10 years ago | | |

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-...

tim333 10 years ago | | |

Yeah but Didi's offering is a ride hailing app for regular taxis while Uber is doing the 'black car' thing. So they are kind of differentiated. Also Uber are partnered with Baidu, the Google of China so they can have Uber fares pop up when people google stuff. Or should that be baidu stuff? Dunno.

mayukh 10 years ago | |

http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-...

It's all one big fu to uber

Apocryphon 10 years ago | | |

Perhaps they should name this alliance G.O.L.D.

eva1984 10 years ago | |

Lyft is like non-exist in China. Uber is currently second to Didi with about one third of its market share.

danieltillett 10 years ago |

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 10 years ago | |

"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.

danieltillett 10 years ago | | |

It probably is closer to destroy rather than transfer. Yes there will be a shift of capital from investors pockets (pension funds ultimately) to drivers and consumers, but a lot of this capital will be squandered on drivers driving at less than full capacity and consumers not paying the true economic price. Neither of these is a very productive use of capital - there is of course the environmental cost of half-empty cars driving around too.

codyb 10 years ago | | |

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.

mdc2161 10 years ago |

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.

HappyTypist 10 years ago | |

Lyft is running cash-burning (not merely unsustainable) promotions in a select number of cities, most likely to try and impress prospective investors that "We have 40% marketshare in NYC!".

Pretty meaningless when that's the result of a 50% off. Meanwhile Uber has been cutting back on promotions and incentives.

cballard 10 years ago | |

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

tim333 10 years ago | | |

Settings -> Notifications -> off?

tbrock 10 years ago |

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 10 years ago | |

They've backed away heavily from the mustache.

deelowe 10 years ago | | |

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