Lyft & Uber probably gonna cut driver pay

McCrank

Member
Jan 5, 2019
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Austin, Texas
What City & State do you work in?
New York, NY
Lyft just went public and Uber's supposed to sometime later this year. On the first day of trading Lyft's stock price rose almost 9% from their initial opening price.

On the second trading day, it dropped to below it's original IPO price of $72. Which means it lost a ton of money between the first and second days Like - a lot! It went from about $87 a share to $69 in one day. (If you bought 1,000 shares on the first day at $87 - you just lost $18,000). (Ok, let me put that more into our terms. If you bought 2 shares on the first day and spent $175, you lost $37). (And today they've dropped another $1 per share down to about $68).

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Anyhow, it's like the reality is setting in that THIS COMPANY HAS NEVER MADE ANY MONEY! But not only has it never made any money, even worse NO ONE CAN SEE HOW IT EVER COULD MAKE MONEY!

But how could this be possible. Well, now that all their financial info is public, analysts (not Lyft spokespeople) have looked at the numbers and come up with the following analysis.

“We see four paths to profitability: cut driver pay, turn off incentives, reduce insurance costs or shift to self-driving cars,” Guggenheim Partners analyst Jake Fuller wrote in a research note on Monday, initiating Lyft coverage with a “neutral” rating. “The first two would be tough in a highly competitive category, the third might not be enough by itself and the fourth is likely 10 years out.”
So, you get that? Here are the only four paths to profitability:
  1. CUT DRIVER PAY
  2. CUT DRIVER INCENTIVES
  3. Reduce insurance Costs
  4. Shift to self-driving cars
Half of the paths to profitability involve lowering driver pay. That's a enormous amount of pressure that Lyft will be under to do just that. And Uber will be under the exact same pressure when they go public. And by the way, #4 is never going to happen. They'll be long out of business before that happens. So that leaves them with only 3 options and the third option isn't enough to get the job done. So they're going to have to go for options 1 & 2 eventually. And when they do - that will be their doom.

They can't lower driver pay any more than they already have. Not because there won't still be idiots willing to drive, but because the drivers and the cars they drive will be so bad no one will want to use them anymore. Taxis will start to look appealing again!

Anyway, this does not bode well for us at all. Sorry to sound like a crank, but this story definitely deserves a little crankiness on our part.
 

Austin Bob

Member
Dec 15, 2018
137
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San Antonio
I won’t ride in driverless car
Haha! I know, right! Seriously, especially not after learning that Uber's driverless cars need a human intervention twice PER MILE!

If people really understand the neanderthal type technology that's going into these things - no one would ride in one. They're years away - even Dara K said they were at least 20 years away recently.
 

Graham

Member
Feb 4, 2019
141
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What City & State do you work in?
Glendale AZ
I don't know why companies keep trying to push driverless cars. The ONLY way they could ever work is if every single car on the road was driverless, and then we're one step closer to Terminator.
 
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