20% of Uber's revenue with 50% in losses.[0]

I want to see Lyft succeed just to counter Uber, but yeah, those numbers need to be healthier

[0] https://www.reuters.com/article/us-uber-results/uber-posts-5...

That fully depends on what the losses are. I haven't read their financials, but if the losses are from expansion and other investment but their unit profitability is good, then it's not a problem. They can always pull back on investing in growth just to reap profits.

But this is where their one-trick pony hurts them. Where will growth come from if they stop growing in the one market they're currently in?

It really feels like a game of who can lose money the longest.

Right, but is this "selling $2 bills for $1" or is it "selling $1 bills for $1.10 and spending $1 billion to tell people about the offer"?

People have mistakenly accused both Uber and Amazon of doing the former when they were doing the latter.

In terms of scale, these numbers appear to be similar in scale to Uber's quarterly numbers [0] of $2.95B and a loss of $1.07B. (Yes I know I'm off by several hundred million in revenue!)

[0] https://www.bloomberg.com/news/articles/2018-11-14/uber-reve...

Looks like they skewed their charts to make their growth look bigger. Seems pretty disingenuous, especially for an official filing: https://imgur.com/a/NaroN6P

2017 Compared to 2018

* As a percentage of revenue, cost of revenue decreased from 62% to 58%.

* As a percentage of revenue, sales and marketing expenses decreased from 54% to 37%.

These seem to be positive signs.

That's like saying "The cancer ravaging your body is down from 62% to 58%" It's a positive trajectory but don't confuse trajectory with absolute value.

Thats how companies work though... no one expects Lyft to be immediately profitable. The company will be rewarded by public markets if its able to keep up that trajectory

No, most companies do not work this way. Most companies that lose this staggering amount of money go out of business quickly.

We are living in a time of "eventual profitability" where some companies have immense privilege to lose an immense amount of money, are encouraged to lose it to build a large company in hopes of creating a sustainable model.

Right now there's not even profitability on the horizon. Losses increase with more revenues which is horrible. All we saw was a negative 2nd derivative of cash loss but there's no telling whether the delta will be fast enough to produce an actually profitable company.

No offense but Amazon did exactly this for nearly 2 decades. I don't know why you think Lyft is somehow an exception to the rule. They aren't. Hyper Growth is not the stage you start looking at P/L statements. If they were generating big profits, there would be little point in going public at all.

No offense, but you're exceptionally wrong.

Go through their financial statements. They were barely profitable on a GAAP basis for a long time. Barely profitable is entirely different from massively bleeding money. Barely profitable means they were making profits but reinvested them into their business.

The stories are entirely different.

Amazon went public in 1997 and posted it's first quarterly profit in 2002. So while it wasn't for 2 decades they were absolutely bleeding money until then.

Their stories are not entirely different, they are extraordinarily similar. Both nascent markets, both money losers at IPO, both needed cash to continue their growth story.

Do you understand the purpose of an IPO? It's a funding round. If you have a ton of cash on hand, or your profitable but don't have a growth area that requires large capital, there's literally no reason to go public.

That's why Lyft is going public now and nobody is talking about Airbnb. The former needs cash to continue it's massive growth in new markets, the latter is a profitable company with low capex that doesn't need a funding round.

This also implies that the vast majority (if not all of their) loss is sales and marketing.

From their S-1:

Cost of revenue primarily consists of insurance costs that are generally required under TNC and city regulations for ridesharing and bike and scooter rentals, respectively, payment processing charges, including merchant fees and chargebacks, hosting and platform-related technology costs, amortization of technology related intangible assets, certain direct costs related to bikes, scooters and the Select Express Drive Partner program, and personnel-related compensation costs.

Yes, when you don't count expenses it sure is a lot easier to make a profit!

As a passenger I've found my Lyft prices to be steadily increasing. In the beginning they were cheaper and more reliable than Uber; then I stopped comparing prices until one day I found that Lyft charges much more than Uber. There was a time when both my friend and I were trying to use Lyft to book the same trip with the same destination, and yet my price was 20% higher than hers.

I’ve noticed the same. I rarely ever see Lyft as the cheaper option now.

The fact this might IPO at $20b is insane...that is the same as United Airlines which made $38b in revenue in 2017 and is profitable.

I dunno, they’re just as expensive to get to JFK from Manhattan as a yellow cab. Maybe they’re loss leading in small markets

Time to short Lyft once it goes public.

Depends on how you look at it. $1.24B profit sounds pretty good to me.

Not a correct reading. They had negative nine figures of "profit".

> They had negative nine figures of (profit).

FTFY

I don't understand. How could they make more revenue than what they lost for the year, but have a negative profit? The loss doesn't subtract enough from the revenue to go less than 0.

Revenue is how much people have paid them. Since costs > revenue, their profit is negative. The loss already takes into account their revenue.

They received $2B in revenue but spent close to $3B.