Investors Sue Lyft, Alleging IPO ‘Overhyped’

By | April 18, 2019

  • April 18, 2019 at 12:52 pm
    Craig Cornell says:
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    I’m no expert on Lyft or Uber but when I read that both have been suffering losses in the 30% of revenue range, I simply wonder how they can be successful if they have to raise rates in the future by 35% or more.

    Seems like the end of the taxi cab was oversold by the tech geniuses after all. Who would have guessed Silicon Valley could mislead us?

    • April 18, 2019 at 3:47 pm
      CO_yeti says:
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      They aren’t losing 30% on each ride. The rides no doubt are priced correctly and able to make money or else no one (VC or investors) would have put money in. They are losing money because they have huge costs in tech, marketing, etc. The idea would be those costs diminish as the company matures and then the foundation has been laid to be very profitable in the near future. Reality could pan out different but that is the basic risk investors take with these IPOs.

      • April 18, 2019 at 4:27 pm
        Craig Cornell says:
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        Marketing? Are you kidding me? Everyone knows about Uber and Lyft.

        Tech? Say what? The technology to connect drivers with riders isn’t that complicated, once the GPS connection is established with car and rider’s phone, and that technology is already built.

        The pricing is low in order to grow. The question is this: what happens when investors demand profits? Uber and Lyft hope that scale and familiarity will cause riders to keep using their services despite the coming price increases. It worked for Amazon, but Amazon wasn’t pricing products at 30% below cost.

  • April 18, 2019 at 2:41 pm
    bob fishman says:
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    Rates could be raised by large margins and the experience would still be 100 times better and worth the cost compared to the average ride in a dirty taxi.

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