Why bother buying Lyft stock?

New / Sales LadyCloser
Mar 29 246 Comments

There’s a conversation across Blind and the internet about the Lyft IPO and whether it’s worthwhile to invest in their stock. The obvious risk is that this is a company that is losing a ton of money, is not the category leader and may never be in profitable. It is not inherently clear that Lyft’s business will survive a recession NOR some key legislation circulating in the US and abroad. Why bother?
Here’s my perspective: an investment in Lyft is buying into the future of mobility. Lyft has grown steadily and intelligently- going deep instead of wide in its expertise. Making a bet on Lyft is betting on its founders, leadership team, brand and potential to continue to dominate the category, and innovate strategically in new markets and categories to eventual profitability.
As for the Lyft vs Uber debate... I think this same bet makes sense in the Uber IPO, and I’m particularly interested in Uber’s investment in food, freight and flights. I see Uber’s business as much more sprawling and diversified and its mere scale and determination to expand as riskier to its survivability and possibility of profiting in the next decade. But the brand and reach are also massive strengths.
I’m not going to put a lot into either company but I’m excited to make the bet. I’m eager to see how mobility is transformed as a result of the money both companies will receive from their public offering.
Why are you going to invest? (I’ve heard plenty of the reasons against it)

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TOP 246 Comments
  • Oscar 🐨koala
    I will tell you why Lyft is not going to beat Uber. Uber pricing is always cheaper than Lyft in NYC, despite the price hike since the stupid new law has passed. And don’t get me wrong - they both enjoy the price hike.
    Mar 29 36
    • Pinterest pikypoke
      Looks like my small amount of focus on social intelligence equates to trillions of dollars aligned with investors in companies. Good of you to assume I'm wealthy and good of you to assume I don't give that wealth to social inequities, but I'll take the small step of using one product over another because of what I believe. And clearly I have a trillion people who think. Just. Like. Me. 🐑

      https://www.cnbc.com/2019/03/30/lyft-is-a-silicon-valley-change-the-world-ipo-moment-so-was-facebook.html
      Mar 30
    • Oscar 🐨koala
      Lol you can trash me all you want. But the reality is you are taking “lyft is doing socially good” way too far. That’s dumb. It’s just yet another company on Earth.
      Mar 30
    • Facebook / Other
      Janitorque

      Facebook Other

      BIO
      Data scientist
      Janitorquemore
      I'm with Oscar. Most of the tech bros and sisters are about the right cause and the zeitgeist, and don't sacrifice meaningfully enough for it to be anything more than mere posturing. I respect people that make substantial sacrifices rather than those that take the easy road to the high road.
      Mar 30
    • Kaspersky Lab / Other
      aye daisy

      Kaspersky Lab Other

      BIO
      Hwe
      aye daisymore
      At my experience Lyft drivers are generally better for some reasons in Boston area. I wouldn’t recommend any woman take an Uber at a night time, but Lyft might work.
      Also I think any of them should make a functionality to match female drivers with female riders in a night time.
      Mar 31
    • Apple toooooo
      But posture is so important. Without it you get insta-kill. 🥴
      Mar 31
  • Microsoft LordFarqud
    Pump and dump.
    Mar 29 4
    • Google 747max8
      classic.
      Mar 29
    • Nvidia MqGt75
      Is that an innuendo?
      Mar 29
    • Intel pioneer
      If it was Uber IPO, then yes, it is an innuendo!
      Mar 29
    • Microsoft LordFarqud
      Update: Time to dump.
      Apr 1
  • VMware arteezy
    the argument against Lyft because of Uber is stupid, Pepsi is still doing well with Coca.
    Mar 29 21
    • Yahoo mDli26
      Decide based on Verb test! Do you “Uber” or “Lyft” to work?
      Mar 30
    • Facebook jetclass
      ^but actually tho
      Mar 30
    • Pinterest PJqy52
      I Lyft to work. Idgi
      Mar 30
    • LinkedIn mtndew💚
      Lol this Pinterest chick definitely tried
      Mar 30
    • Nielsen nqED75
      I always "get a Lyft".
      Mar 30
  • Salesforce Sadforce
    I see Lyft as one of the pure autonomous bets out there...you can't just buy waymo stock, you have to buy the entirety of Alphabet, the good and the bad; uber is close, but they are also diversified across freight and food delivery.

    I see autonomous as what does it take to get drivers out of the loop...get people to use more bikes and scooters and build safe cars or vans that'll drive themselves. What is a purer bet than Lyft? They have a fleet of cars, bikes, scooters and have their L5 moonshot.
    Mar 29 10
    • Nielsen nqED75
      Autonomous at this level is still a way out. Lyft don't need to solve it themselves, but I think building that experience and talent in house will pay dividends as autonomous becomes mainstream in the medium term (10+ years).

      Edit: or buying it
      Mar 29
    • General Motors QEmN10
      IMHO they sealed their fate when they continued to pursue autonomous after we bought a piece. They should have focused on market growth and branding while Cruise did that work. GM and Cruise have the synergies and scale to roll that out on their business model. Now they’re constantly treading the burning cash waters which freezes the rest of the business from expanding.
      Mar 29
    • Nielsen nqED75
      How much do they spend on it? You think this is one of their biggest costs?

      Of course Google owns Lyft too. Enough big players think it's worth betting on. That's doesn't convince my, but does make me feel good about my opinion.
      Mar 29
    • Uber / Eng Trigger
      My friend in Lyft autonomous tells me they don't have the technology for another 10 years. Should be same with uber
      Mar 29
    • Tesla AutopiIot
      Bet autonomous on us
      Mar 30
  • Uber / Eng Unofficial
    Today creating a clone of Lyft or Uber App is not hard. Without autonomous they are simply “operational” heavy companies.
    Pretty much the hierarchy looks like City GM > regionale > state > country

    Margins are razor thin.

    If Lyft and Uber spends 1$ on a user or on new tech, the value of 1$ is much higher for Uber bcoz, they try to attract same user to eats, bikes, transit etc. tech $ can be used outside of US and CA.
    Mar 29 7
    • LinkedIn Rr333
      Google search is relatively easy to copy. Just set up an elastic search cluster, scrape some pages and boom, a trillion dollar company in the making. /s
      Mar 29
    • Uber ihnfhijj
      Ya wtf are you taking about. Eventually investor money will dry up there if we keep beating out competition.
      Mar 29
    • Google LyLs67
      If you believe web search and driver search are equally complex you are quite the idiot
      Mar 30
    • New / Eng
      TechLeed

      New Eng

      PRE
      Amazon
      TechLeedmore
      I knew that was false before you told me, do I get a job at Google now?
      Mar 31
    • Uber Luber
      Rr333 is correct. Unofficial is probably an engineer, not considering the operational expertise and advantage that Uber/Lyft has. In a way, yes, Uber is operational heavy company, and the operation efficiency is what will beat the newcomers.

      Try get people at bus stop to use a new app. Try it and report back how efficient you are at onboarding riders.

      Then try getting drivers.
      Mar 31
  • Uber Tổng
    If you work at a tech company then you’re already heavily invested in tech. You shouldn’t buy LYFT or any other tech stocks; you should diversify instead.
    Mar 29 13
    • Salesforce zqwy71
      Not necessarily if they invested those elsewhere and got similar or higher returns . If you invest heavily in your company you are going by the assumption that this company will perform better than all the other investment opportunities in the market . Putting your eggs in one basket . That’s a flawed assumption.
      Mar 29
    • Microsoft
      tech.ladki

      Microsoft

      PRE
      Google
      tech.ladkimore
      No, I just don't want to discount my company because I worj there
      Otherwise I agree with diversification
      Mar 29
    • Salesforce zqwy71
      🙄you can choose what you want to think but it doesn’t change facts . It’s like saying I choose to believe the sun rises in the west - the same as working in the company doesn’t count as investment . it’s upto you but it doesn’t change the principles of investment . It’s a foolish remark .
      Mar 29
    • Google LyLs67
      Lyft is not a tech company
      Mar 30
    • Microsoft pJcW86
      ^^^^^ yes, lyft, uber, groupon are companies that utilitze tech for their business but aren't a tech company like Salesforce, Google, Amazon (AWS). The value is in the IP which doesn't exist for lyft, uber, and groupon. Uber is trying to become a true tech company though, they just need to learn to monetize it.
      Mar 30
  • I see lyft drivers more refined than uber.
    Mar 29 8
    • Nvidia tc?
      Most drivers use both apps depending on what bonuses they offer that week or day.
      Mar 29
    • Palo Alto Networks ERmi65
      From my experience with uber & lyft, I'd definitely prefer lyft... Lyft drivers and user experience are much better...well, uber express pool is the exception, if you don't mind wasting time matching rides and finding drivers' location...
      Mar 29
    • Google LyLs67
      It's the same drivers
      Mar 30
    • Kaspersky Lab / Other
      aye daisy

      Kaspersky Lab Other

      BIO
      Hwe
      aye daisymore
      Same for Boston. I think Lyft vets drivers a bit better.
      Usually Lyft drivers drive Uber too, but many Uber drivers don’t drive Lyft.
      Mar 31
    • Oracle BMWM5
      It's a taxi company with an app. I think it has a way to post-IPO correct before it'd be a viable buy-in option.
      Apr 4
  • Lyft is less efficient due to their smaller scale as compared to Uber, and they will eventually be driven to bankruptcy due to Uber’s larger war chest.

    Only reason to buy the IPO is if you think that this will be far enough down the line that a white knight like Waymo or Tesla can justify an acquisition.

    Too risky a bet this will be above IPO price.

    Yes, I work at Uber, but if you ask Lyft people this is their exact weakness.
    Mar 29 18
    • New / Eng |l|l||l|l|
      The world is more than this country. And Uber is killing it out there while Lyft isn't.
      Mar 30
    • Google LyLs67
      World is very different from us where.taxis don't suck so much and margins are very different. Let's focus on Lyft for now
      Mar 30
    • Google AynRand
      Ppl live in this bubble!! Everywhere around the world there are multiple ride hailing networks. The stickiness is so little. I always check lyft vs uber prices before i take a ride, in other countries ppl have 3-4 providers.

      Also other than ny and sf which have outrageous property prices ppl like to drive. The only way ride hailing will pick up is self driving, uber and lyft are no where close. Waymo will lead there. I am just surprised the brightest minds working for these companies cannot see it. Why are they effin racing to IPO if they are so great why??? Infact if uber/lyft had great futures.. PE firms would hold onto to their investments and list these companies when the hockey stick growth wasclose to peaking out
      Mar 30
    • Google AynRand
      But nooo.. the PEs are selling their stake because they want the general public to benefit from this wonderful investment???
      Mar 30
    • Google AynRand
      And here is a glimpse of your future
      Didi Chuxing is a case in point. Once touted as a national champion that drove Uber out of China in 2016, the company is now cutting 15% of its workforce, or about 2,000 employees. Also gone are the free snacks and complimentary yoga sessions that employees had once enjoyed, as the company reportedly seeks to stem mounting losses
      Mar 30
  • Amazon / Data binancemas
    Everyone here is taunting Uber’s diversity into food and other areas. I hope I am wrong but Uber will never make any money delivering food for the simple reason that people won’t be willing to pay as much money to have their meals delivered as they would for a ride. The only way this ‘diversification’ pays off is when the cost of delivery gets so low because Uber has been able to kick drivers out of the loop by using driverless cars
    Mar 29 6
    • Amazon / Data binancemas
      People will spend money to get their food delivered, but not as much as they would pay for a ride
      Mar 29
    • Uber
      Thumper

      Uber

      PRE
      Google
      Thumpermore
      Uber gets a cut from the restaurant. The restaurant usually has about 70-80% margin on each food item. By delivering the meal to the driver, the restaurant saves space that would have been occupied for an hour. A good restaurant generally has a few minutes wait time. Food delivery cuts that time. So the restaurant can serve more customers much more efficiently. So the restaurants are willing to give some cut from their profits to food delivery services. The customer pays a bit for the convenience. In fact it's cheaper to order than sit at a restaurant because it saves time not just in the restaurant, but also all the hassle associated with getting everyone ready and get to the restaurant. You can also get away with a smaller tip.

      Everyone wins. (Sometimes some drivers even win free meals😜).
      Mar 29
    • Salesforce zqwy71
      I don’t think diversification is only about adding revenue streams . It’s about having customer data . Uber has better understanding of their customers through these diversified offerings and can compete better . Same reason as google getting into our lives at every level ..
      Mar 29
    • Google LyLs67
      The data argument is pretty weak..
      Mar 30
    • Microsoft pJcW86
      Agreed that food delivery is low margin business and lowering but there is growth as people are getting lazier and lazier.
      Mar 30
  • Facebook public2
    You seem to care a lot that others know you don't care.
    Mar 29 5
    • Microsoft looooooool
      Try again.
      Mar 29
    • Facebook brTf85
      Has anyone really been far even as decided to use even go want to do look more like?
      Mar 29
    • Facebook public2
      What?
      Mar 29
    • Facebook brTf85
      @public2 That's what your original comment looked like to everyone else*

      Edit: *various other people
      Mar 29
    • Facebook dYqW70
      I understood it
      Mar 29
  • Uber bjugf
    I’ll give you a great reason not to:

    They are grossly misrepresenting their marketshare gains.

    - the numbers in their S-1 was from a survey done by their largest shareholder Rakuten
    - it only measures one point in December 2018 after Lyft spent aggressively on buying marketshare to pump their figures

    If you want better marketshare numbers, look at the figures from Second Measure.

    Furthermore, they don’t report a real userbase number like MAU, WAU or DAU. Their usage of Quarterly Average Users is intended to mislead.

    I would also take a look at their float size, which was tiny as a percent of their total amount of stock. You only float that little stock if you’re trying to pump your stock price through scarcity.
    Mar 29 2
    • eBay / IT
      manorama

      eBay IT

      BIO
      Coder
      manoramamore
      How much percentage of float did they ask from market . Some percentage of 22b
      Mar 30
    • Uber bjugf
      32.5M out of 291M outstanding

      This comment on HN gets the basic idea right but I don’t know where they got the 273M outstanding shares figure for Lyft. News articles I found said 291M.

      https://news.ycombinator.com/item?id=19523877
      Mar 30
  • Expedia Ytdj51
    It’s a terrible investment but obviously the bubble can get bigger. A couple yrs ago the consensus was that they needed to be acquired or go bankrupt, now they’re valued at $27 billion. They don’t make money, period
    Mar 29 2
    • Amazon LkKy44
      they do make money though. They just lost more.
      Mar 29
    • Uber Luber
      Same argument can be made about Amazon
      Mar 31
  • Uber bjugf
    Finally some people are figuring out that the marketshare gains touted in the S-1 are bullshit fabricated by Lyft’s largest investor:

    https://www.fastcompany.com/90326608/lyft-goes-public-at-86-per-share-will-the-hype-last
    Mar 31 5
    • Google LyLs67
      In the us Lyft and Uber are identical products, think Pepsi VA Coke and not Google search vs bing search. So the stable market share is 50 : 50
      Mar 31
    • Uber bjugf
      Except for coke and Pepsi are part of the larger drinks market and coke has more than twice the marketshare of Pepsi.
      Mar 31
    • Google LyLs67
      Ok whatever.. in terms of mindshare they are the same
      Mar 31
    • Uber bjugf
      Maybe in some woke bubbles. In the rest of the country Uber has way more mindshare.
      Mar 31
    • Google LyLs67
      Both Uber and Lyft are woke bubble. Phenomenon. Most of the country just drives their cars.. or takes the occasional ride. When they need to get to the airport or when they see drunk
      Mar 31
  • Google AynRand
    Classic pump and dump. Nobody asks this simple question : Why are they racing into IPO?” Why list together

    Because once the cat is out of the bag.. you cant put it back in. Once lyft’s earnings go public and ppl can see the disaster.. there is no way uber gets 100B
    Mar 29 4
    • Uber ihnfhijj
      Uh. Uber has been releasing public financials for a long time
      Mar 29
    • Google AynRand
      Sir SEC disclosures are more detailed.
      Mar 29
    • Uber bjugf
      Lol, our detailed financials are actually better than our public ones. We haven’t released them while private because it would contain information that is useful to competitors.
      Mar 29
    • New / Eng
      TechLeed

      New Eng

      PRE
      Amazon
      TechLeedmore
      Likely story
      Mar 31
  • Oracle
    •••••••

    Oracle

    PRE
    Google, Facebook, Instacart, Twitter, Uber, Air Asia, IBM, Cisco
    •••••••more
    FWIW Warren Buffet is not buying.
    Mar 29 13
    • Oracle
      W. Buffet

      Oracle

      PRE
      Google, Facebook, Instacart, Twitter, Uber, Air Asia, IBM, Cisco
      W. Buffetmore
      I've sold my ORCL holdings too.
      Mar 29
    • Oracle
      W. Buffet

      Oracle

      PRE
      Google, Facebook, Instacart, Twitter, Uber, Air Asia, IBM, Cisco
      W. Buffetmore
      Soo, Buffet didn't get the price for Lyft he cosidered worth it during pre-IPO, but some investing geniuses on Blind think that post-IPO price is a good deal? A-ok.
      Mar 29
    • Microsoft
      Tier 1

      Microsoft

      BIO
      #1 in Prestige
      Tier 1more
      Apple isn’t a tech company. It’s a fashion company that sells other people’s tech (eg Samsung displays, Qualcomm modems, etc) with a shiny Apple logo.

      Apple once managed to convince even those on food stamps to go out of their way and pay for their premium “luxury” products. And even though the poor had the products, the upper middle class still valued them.

      Buffet understands that model. It worked great.

      Then Tim Apple started ruining the brand. I’m not at all surprised that Buffet is selling.
      Mar 29
    • Oath OPnd70
      Did I just read that Apple is a lifestyle company not a tech company? Then Microsoft Is a business company. When did being a tech company go out of style?
      Mar 30
    • Microsoft
      Tier 1

      Microsoft

      BIO
      #1 in Prestige
      Tier 1more
      Microsoft is a tech company. We make tech platforms that are used by 3rd parties to build solutions for businesses.
      Mar 30
  • Square AjlUz7
    Lyft is just so one dimensional. They do one job and if you fire them they’re done. Uber has an ecosystem attacking transportation from different angles.
    Mar 29 6
    • Google LyLs67
      Some BS.. what do you mean by ecosystem
      Mar 30
    • Do a google search for the word ecosystem lol!
      Mar 30
    • Google LyLs67
      It's some jargon... Has zero impact on how ppl thin when the want a taxi. They just chose the cheapest option
      Mar 30
    • Square AjlUz7
      Taxi, freight, food delivery, flight, logistics... ecosystem.

      Lyft does only one of those things.
      Mar 30
    • Google LyLs67
      That is like saying Google does Ads and cloud. No one cares about the cloud
      Mar 30
  • Tesla 100thieves
    Ooo another Lyft thread. Where are my Uber bros and blind financial analysts at 👀 🍿
    Mar 29 1
  • Charles Schwab EGjV76
    The whole self-driving thing is vaporware. If you're wondering what the .com bubble was like, now you know.
    Mar 29 0
  • I can tell why not to bother about Lyft! Uber has ridesharing, eats, freight, jump and ATG. Each of them are internationally multi billion dollar businesses on it’s own! Lyft is genius at branding but not a market leader in any of the markets!
    Mar 29 1
    • Google LyLs67
      You talk as though these are legitimate businesses lol
      Mar 30
  • Google LyLs67
    Don't buy some BS theories. Lyft or Uber is not an alternative to car ownership. World is always nothing in the direction of ppl doing more of their work, be it writing your own emails or managing your own calendar etc. Works well not move in the other direction and have you be moved sound by some random Lyft driver. It's prohitovely expensive for a second person to drive you around when your can do it yourself.

    This is done bs theory
    Mar 29 8
    • Uber bjugf
      Uber is not nearly as subsidized as Lyft.

      Just divide the losses over either gross receipts or net revenue and you’ll see that there is a huge difference between both companies.

      If Uber were to stop investing in immature markets and new lines of business it would be profitable. Right now all it needs to do is finish amortizing SG&A and R&D over more markets. There’s a huge difference between subsidizing those two line items (Uber) until you can amortize them across the volume of goods and services sold and subsidizing both those two line items and each good or service sold, which is what Lyft does.
      Mar 30
    • Google LyLs67
      That's not true. Uber has claimed they are not profitable in us. A few years back they said they were close but then they stopped talking about it
      Mar 30
    • Uber glendale
      that’s when lyft started burning new pile of vc dollars to gain market share
      Mar 30
    • Lyft lipstic
      That's when delete Uber happened. Didn't need to burn piles of money
      Mar 30
    • Uber bjugf
      I’m talking about the Q4 2018 burn.

      Delete Uber was early 2017, by 2018 we were done shooting ourselves in the foot, which is why Lyft’s 2018 market share gains were a residual 3% at best. Now that the 2018 hangover is over, you’ve flatlined on marketshare growth and resorted to shenanigans to mislead investors into thinking Lyft was still growing relative to Uber. The truth is going to come out before the lockup expires. It’s a classic pump and dump that won’t last.

      A recent article with details on the misleading marketshare numbers:

      https://www.fastcompany.com/90326608/lyft-goes-public-at-86-per-share-will-the-hype-last
      Mar 31