Tag: Lyft

Better results start with an independent, global view

Guest Post by Simon Black

Last week when Uber finally went public, the stock set a record for the largest first-day dollar loss in IPO history: over $6 billion vanished from the company’s valuation in a matter of minutes.

But that shouldn’t be surprising since Uber doesn’t actually make a profit.

And the company acknowledged in its IPO filing that it may, in fact, NEVER turn a profit, given that it expects operating costs to “increase significantly in the foreseeable future.”

As we’ve discussed before, Uber is far from alone. Most of the new, high-flying, popular tech companies lose money and burn through their investor’s cash faster than a California wildfire.

Snapchat, Lyft, Tesla, WeWork, etc.

And then there’s Netflix, which is actually in one of the worst financial positions imaginable.

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Is The LYFT IPO The Inflection Point In The Ponzi?

Submitted by AdventuresInCapitalism.com,

Over the past few quarters, I have become increasingly critical of the Profitless Prosperity Sector, known amongst my friends as the Ponzi Sector.

Why Ponzi Sector?

Because these companies have no profits yet continue to raise new capital by showing explosive revenue growth. Oddly, the more revenue they show, the more money they lose, because incremental revenue is at a negative gross margin. Many of these companies are in consumer facing sectors where the product is not particularly unique. Rather, they are using a tech interface to offer an existing product and effectively subsidizing the consumer to use more of the product. Nothing shows this better than the ridesharing duopoly of Uber and Lyft (LYFT – USA). Therefore, last week’s LYFT IPO was enlightening.

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At Least They Are Looking for Drivers

Guest Post by Eric Peters

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Lyft is looking for drivers – a tonic thing to discover at a time when it seems as though every effort is being expended to do away with them.

The ride-hailing company just announced it will be “partnering” with used car dealerships with the aim of helping prospective Lyft drivers find an acceptable car to drive.

Lyft will pay a finder’s fee to these dealerships for successful references – i.e., people who end up becoming Lyft drivers – and help them finance the car, too. This latter will be done via direct garnishing of the driver’s Lyft earnings, which will be transmuted into car payments.

Probably, this will be done on the Payday Loan model – which is based on the Vinnie-in-the-Alley model, which is the loanshark model. Exorbitant interest designed to keep the customer on the hook – and in hock – for as long as possible.

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