Leaked Lyft Document Reveals a Costly Battle with Uber(bloomberg.com) |
Leaked Lyft Document Reveals a Costly Battle with Uber(bloomberg.com) |
Many times I call for an Uber and a cab comes first and then they lose my business to the cab, which kind of highlights the commodity nature of rides--especially in the unregulated environment they themselves advocate. Maybe the long-term plan is de-regulate and re-regulate in favor of Uber?
Just thinking out loud because I'm genuinely curious what the strategy is.
Anyway! I see Uber going the way of webvan. Great proof of concept that VC money is going to burn through, followed up by some combination competitors, self-driving cars, and local/state government transportation agencies putting together federated/open APIs to perform the same services but in a regulated manner (or governments contracting with smaller players to perform the same services).
No amount of VC is going to remove a government's ability to regulate transportation (Montreal, Canada impounded 40 Uber drivers' vehicles the other day [2]). Then again, it shouldn't. Transportation should be regulated, but not for monopolistic reasons.
Anyone want to make a cheap long bet for funsies?
[1] http://www.andresmh.com/nyctaxitrips/
[2] http://www.cbc.ca/news/canada/montreal/montreal-taxi-bureau-...
And BTW, according to some uncofirmed twit[1], more than 50% of lyft rides in sf are done through lyft-line, which is a pretty new service.
To a lesser extent, user density is also related(in theory) to driver ride time, both in reducing wait time, and reducing time from call to passenger.
Also there might be a possibility they can subtly incentivize drivers to only drive for them by giving complying drivers a bit more work, or better work.
And as for your risks lists,you can paraphrase it as: the hand of god(government), a darpa scale technology(self driving cars), very well resourced competitor.
But every company is under risk from the first 2, even for businesses with a strong competitive advantage.
Try building one.
I think you can be legitimately critical of Uber's poor business ethics [1], but the sustainability of their current business model looks excellent, at least for each city in which they are established as the first mover.
[0] http://en.wikipedia.org/wiki/Two-sided_market [1] http://en.wikipedia.org/wiki/Uber_(company)#Sabotage_against...
Also, drivers are a commodity market which is much easier to displace. Amazon marketplace vs eBay's auctions.
But for eBay, the products people want vary vastly from each other. I want to buy something fairly niche, so to save time it helps if there's one massive site where all of the people on the other side of the market are all located.
* Blacklane - cheaper than Uber Black, but the rides have to be pre-arranged (essentially a car service with UI)
* Wingz - cheaper than UberX, but only to/from airports
* Sidecar - cheaper than UberX, but with implied wait of up to an hour
* Leap buses - cheaper than UberX, but with set routes
If drivers are utilized at 100%, they will have very little reason to look around. But most of the services don't utilize (and hence don't pay) drivers for 100% of their time. Hence a myriad of phones with a bunch of identical apps on drivers' dashboards, and frantic search for 100% utilization (food delivery? shopping delivery? help with moving?) among the dispatcher services.
In that scenario, Uber should be charging you a penalty for the cancelled ride.
> Right now, Uber can beat everybody on price and quality because they don't have to be profitable for a long time.
I certainly hope they're not losing money on each ride right now.
Which would drive users to Lyft or other ridesharing services.
That's one option. Grow until they are dominant, then support greater regulation. They can afford it, new competitors can't. Similar to Amazon and sales tax.
I've heard they're beta testing package delivering over at reddit iirc.
An example would be Netflix, they had cheap license for old tv shows and dvd rentals. Now that production studios have squeezing Netflix in licensing deal with higher prices, they've pivot to becoming HBO like, with a smaller selection of tv shows and movies license.
> Lyft projects $796 million for 2015, a slowdown in growth but still an impressive 512 percent jump from 2014
What is this sentence supposed to mean?
Also did Lyft Line even exist in 2013?
> in 2014, it was 51,000 drivers and 2.2 million monthly rides, according to the document
> A ride booked in San Francisco through the Classic service generates a 92-cent profit for Lyft, including marketing costs but excluding corporate expenses, such as software developers and office space.
and assuming that all these 26.4 rides where Lyft Classic(which is of course foolish, but good for now), they would have around $24.28M for corporate expenses. Well and office in SF with ~500 people and all these perks in the heart of Mission district, makes me wonder if they are even profitable...
Though currently unprofitable, Lyft's ride economics appear to be going in the right direction.And there is always differentiation based on customer service.
I guess I'm saying that there are plenty of niches to fill.
http://blog.uber.com/2012/05/01/updated-cancellation-policy/
There is zero friction to install a new app and accept fares via that app, except perhaps how many ridesharing apps you can run at once on your device for accepting passengers.
The linked article says Lyft now have an average pickup time in SF of 2.5 minutes. Good luck bootstrapping to that kind of performance with a brand new ride share company starting from scratch.
Based on what I've seen, Hailo tried to buy their way into this market, albeit with the twist of using licensed cabs. Seems like they had little trouble signing up drivers (who were predisposed to distrust the UberTAXI) but my assumption is that they gave up in North America because they couldn't afford to keep giving away the free rides and discounts needed to build up a customer base.
Drivers using both Lyft and Uber is a perfect demonstration that they care most about the size and liquidity of the demand side of the market. They are using both in order to increase demand side liquidity from their perspective.