Re:Lyft Loses $600M in 2016 as Revenue Rises to $700M
by Someone on Sunday January 15, 2017 @08:59AM
(#13403965)
”Uber and Lyft don't make money until they're able to replace their drivers with autonomous cars”
”with an autonomous car, there's no reason why competition between the two companies would not drive fare prices down.”
So, what is it, will they become profitable because they will be able to decrease their costs, or will they have to cut prices because their competitors are able to do so because they will be able to decrease their* costs? Or do you think they will be able to split that between the two?
I think the only benefits that burning money at tremendous rate buys these companies are scale and mindshare. I doubt either will be worth enough in the long term to warrant the current expenses; for scale, I even doubt whether having scale at the level they aim for is worth having at all. If it were advantageous, I think we already would have had international taxi companies.
I see two possible cop-outs, but don’t think they are worth their current expenses.
The first is if either of them managed to effectively become a monopoly. I don’t see that happen, and if it does, I expect quite a few governments across the globe to take action to correct that.
The second is that lower prices that autonomous cars will afford them would grow the market (if their margin per ride halves, but the number of rides quadruples, their revenue will double). That might be possible, but I fear they need unrealistically high market growth to have that make them a winner.
”with an autonomous car, there's no reason why competition between the two companies would not drive fare prices down.”
So, what is it, will they become profitable because they will be able to decrease their costs, or will they have to cut prices because their competitors are able to do so because they will be able to decrease their* costs? Or do you think they will be able to split that between the two?
I think the only benefits that burning money at tremendous rate buys these companies are scale and mindshare. I doubt either will be worth enough in the long term to warrant the current expenses; for scale, I even doubt whether having scale at the level they aim for is worth having at all. If it were advantageous, I think we already would have had international taxi companies.
I see two possible cop-outs, but don’t think they are worth their current expenses.
The first is if either of them managed to effectively become a monopoly. I don’t see that happen, and if it does, I expect quite a few governments across the globe to take action to correct that.
The second is that lower prices that autonomous cars will afford them would grow the market (if their margin per ride halves, but the number of rides quadruples, their revenue will double). That might be possible, but I fear they need unrealistically high market growth to have that make them a winner.