For Uber and Lyft, the Rideshare Bubble Bursts

https://www.nytimes.com/2021/10/17/opinion/uber-lyft.html

by aarghh • 5 years ago

16 26 5 years ago

paulpauper• 5 years ago

lol Uber stock at $48, still well above the IPO. Journalists have been calling for the demise of Uber forever. They need to find a new hobby. Forecasting is not for them.

skinnymuch• 5 years ago

Look at Doordash’s stock. It’s remarkably close in market cap to Uber. Right now it’s around 3/4.

smt884• 5 years ago

Forecasting is not for them.

If you'd read the article, you'd know it was a review of all the forecasts made by Uber and Lyft. The journalist didn't forecast anything.

So I guess your comment should say:

Uber and Lyft need to find a new hobby. Forecasting is not for them.

nuerow3• 5 years ago

lol Uber stock at $48, still well above the IPO. Journalists have been calling for the demise of Uber forever. They need to find a new hobby. Forecasting is not for them.

The article mentions that so far Uber has burned through over $20 billion since 2009 and still hasn't turned a profit.

The article also points out that Uber and Lyft's own projections didn't showed a profit this year.

Unless you expect a company to be perpetually kept afloat by generous millionaire investment rounds, either the cash flow adds up or the current trajectory points to bankruptcy.

bko4• 5 years ago

Piece by piece, the mythology around ridesharing is falling apart. Uber and Lyft promised ubiquitous self-driving cars by as soon as this year. They promised an end to private car ownership. They promised to reduce congestion in the largest cities. They promised consistently affordable rides. They promised to boost public transit use. They promised profitable business models. They promised a surfeit of well-paying jobs. Heck, they even promised flying cars.

What other company needs to justify its existence this much besides "our customers find us useful"? I know Uber and Lyft has made my life better, otherwise I wouldn't have used them. I imagine the same is true for the millions that have used their product.

Let's be honest what attacks on ride sharing is about. It's the remnants of grievances regional taxi companies had over facing competition. And it was strangely picked up by large newspapers. I'm old enough to remember taxi cartels pre-Uber. I remember being unable to find a taxi in a bad neighborhood, or going to a less populated area or when its raining. I remember the inefficient routes, the dangerous unaccountable driving, the "broken" credit card machines. Others remember not being able to get a cab because their skin is the wrong color or not being able to drive a cab without renting out a medallion from a medallion hoarder or having to take a second mortgage out on their house to afford a medallion.

Taxis existed since the invent of cars. I don't see why an app to book taxi rides should draw such scrutiny.

apahwa• 5 years ago

they don't need to justify there existence, they need to justify their market cap. they attained that market cap via the dreams outlined in your article quote - it is reasonable to then question the value of the stock.

all companies have to justify their value - some have less clear justifications and that means more discussion. this isn't the conspiracy you make it out to be.

coralreef• 5 years ago

Technically they don't need to justify their market cap, the market assigns their value for them by trading their stock.

There's no need to "argue" a companies value, you speak best by shorting/longing.

dartharva• 5 years ago

they need to justify their market cap

Why? It's market forces controlling the price, they aren't driving the hands of players.

smt884• 5 years ago

You seem to have completely glossed over the part where they promised to be a viable business with actual profits.

bko4• 5 years ago

They're viable in a lot of cities, at least pre-pandemic. They could likely just dump all non-profitable cities and be in the green very soon. They just spent a lot of money getting a foothold in future markets. You know... investing... like a business is supposed to do

throwaway9843932• 5 years ago

Let's be honest what attacks on ride sharing is about.

Sure, let's.

Ride sharing is only profitable if Uber and Lyft don't pay the drivers as much as taxi drivers. The fares are cheaper than taxi fares, so they can't be making as much income as Taxi companies do. So they have to take more of a cut of the fare, and pay the driver less, or the business just doesn't work. Their revenue is going to the overhead of an app, a swarm of lawyers, and some remote workers who set new drivers up. They don't even pay for fleet maintenance. All of this is backed up by the fact that they've never made a profit.

It is an unsustainable public service funded by VC dollars and supported by underpaid drivers. So the attacks are mainly about the exploitation of drivers - both the Uber/Lyft drivers, and the Taxi drivers nobody cares about. (Granted, there are plenty more things to attack them over, like increased traffic congestion and pollution, and reduced public transit)

aeternum2• 5 years ago

Taxi companies in conjunction with city governments created a monopoly. Prices were artificially high in almost all cities. Check the prices of how much those medallions were going for at auction in NY & Chicago prior to uber/lyft. It is also possible for a driver to make more money with lower fares by increasing the percentage of time that passengers are in the car.

Uber and Lyft were profitable in many cities pre-covid.

bko4• 5 years ago

So the attacks are mainly about the exploitation of drivers

Did you miss the part about taxis not picking up minorities or going to poor parts of town? The drivers aren't the ones being exploited...

nuerow3• 5 years ago

Ride sharing is only profitable if Uber and Lyft don't pay the drivers as much as taxi drivers.

If that was true then how do you explain that there are countries where Uber rides are actually provided by taxi cabs?

mikysco• 5 years ago

Ride sharing’s empty promises can be chalked up to corporate PR… I don’t imagine most riders or investors consider those when calling a car or investing.

Wrt the measurable externalities (traffic, pollution, etc) - don’t these exist due to the stronger data capture (app based) and public scrutiny? I have a difficult time believing Uber/Lyft are worse on these metrics relative to traditional taxis

nuerow3• 5 years ago

Ride sharing’s empty promises can be chalked up to corporate PR… I don’t imagine most riders or investors consider those when calling a car or investing.

I disagree. Ridesharing promised sharing a car. That is the whole concept: anyone with a car could pick up passengers and be rewarded by it. See also carpooling.

This is not what Uber or Lyft do, because that business was regulated out of existence by the taxicab lobby. We're talking about an established monopoly which fought any ride hailing service that was presenting any competition to their business.

What Uber and Lyft ended up getting away with was ride hailing services. They got away with it by leveraging existing legislation on vehicle rentals with their own driver. Still, that business is only available to licensed companies, not the regular public.

Getting back to ridesharing, the underlying thesis and the main value proposition of carsharing is that the service provided a way for everyone with a car to monetize their ride by picking up a passenger in exchange for a small fee. Instead of going through your commute with your car empty, you could pick a passenger willing to pay you for your trouble. That would take cars from the street, lessen traffic congestions, and change the way public transportation was used.

yuppie_scum• 5 years ago

We are not going back to shitty old medallion cans. Ever.

neonate• 5 years ago

https://archive.is/cOT1A

For Uber and Lyft, the Rideshare Bubble Bursts

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