Can a ridehailing business be profitable? If yes, how?
Uber, Lyft prices are through the roof making these services unaffordable for the average user paying out of pocket (corporate employees who get reimbursed by their companies may continue using on business trips). One survey says price of an average ride using these apps is up 92% from Jan 2018. I have seen many people prefer car rentals/public transport. To make matters worse, there is little to no trust with drivers due to huge cut these companies take, low transparency, safety, regulatory issues. Uber may be trying to improve driver utilization and hence attract more drivers using Eats, grocery/courier delivery, etc. but the same problem of unreasonably high prices persists with Uber Eats and grocery delivery leading customers to prefer picking up food/use alternatives like Instacart. How can these companies be profitable (Uber claims it will be profitable by end of 2021 but unclear how even in post Covid world if they are losing customers to high prices and incentives not attractive to drivers who are the lifeblood of this business model)? How did Didi/Ola become profitable; what did they do differently? Any thoughts are welcome, but especially Uber/Lyft employees how are your companies thinking about solutions to these problems? #uber #lyft #didi #ola
There are still use cases where Uber Lyft is better than public transportation like airport pickup, night clubs, short trips business travels etc. Uber is already profitable in the rideshare and it will persist in the future. Uber is unprofitable before because of self driving, spend on eats, freight etc. with the offloading and more reasonable spending, acquisition, Uber is well positioned in the post COVID world. Just my two cents
Ride hailing business will not be profitable anytime soon, no matter what optimistic speculations suggests. But most of these businesses will survive or consolidate because profit is not the only aspect in such complex businesses and lots of equity is involved for bidding on the future.
So you sayin Uber n Lyft are lyin?
It is not lying, showing P/L in bookkeeping is one thing and really making profit is another thing. All options are legitimate.
I think Uber/Lyft can be profitable if they figure out how to price signal and understand customer price sensitivity better. In many cities it's just the two of them. With a ruthless price war against any newcomers they can maintain a weak competitive moat and create profits. Will they ever be wildly profitable? Nope.
That wild profitability can only come from self driving, I would agree.
Taxi business was always profitable. Now they have a business free of unions. Do you see where it goes from here?
May I introduce you to the taxi business ? Some decade or so ago, a taxi medallion was worth $1m+ in certain metros. You can assume taxi cabs were profitable. And now - you don’t even know what a taxi cab is anymore. Or barely see them.
They can double prices and still be significantly less than a taxi. Business travel is returning. Autonomous will really unlock em.
Just look at the stocks, the market often corrects to real value eventually from sentiment.
Afaik ride sharing has been profitable for the past 2 years at both Lyft and Uber. The reason why the entire company wasn't profitable was because they were pouring money into other things. In past 1 year both have cut down on a lot of fat (esp true with autonomous). Lyft is already EBITDA profitable and Uber will probably be this Coming earnings. Also, no matter what the prices are for ride-sharing they will almost always be cheaper than a taxi and there will always be use cases for ride sharing.
Thank you, this is the correct answer lmao. Ridesharing has been profitable for years, especially on Ubers side. For Uber, it’s been eats + self driving + freight that’s been deeply unprofitable (understandably so).
I thought Lyft is profitable
Unit economics are actually pretty damn good but volume is not enough to cover overhead costs yet. We achieved adjusted ebitda profitability which excludes stock compensation (which is pretty big)
By Cutting down on marketing and another round of layoffs