Topic: Ride sharing
Lyft to launch in 100 new US cities, including 40 on Thursday – Business Insider (Jan 25, 2017)
Lyft is perennially in second place in the US ride sharing market, in terms of cities served, rides taken, and any other metric you might care to check. But it’s also been losing far less money at its smaller scale, and has looked like hitting profitability rather sooner than Uber. However, a massive expansion like this is likely to set that effort back somewhat, given that the main reason for the losses is customer acquisition costs, which are always highest in a brand new market. I’ve yet so see any commentary on that point from any of the coverage on this news today, but it should be a major focus here for anyone watching the company.
via Business Insider
When Their Shifts End, Uber Drivers Set Up Camp in Parking Lots Across the U.S. – Bloomberg (Jan 23, 2017)
Along with its distaste for regulation, the other big narrative that dogs Uber is its treatment of its drivers. This piece stops short of saying that Uber mistreats its drivers, but provides quite a bit of detail on those drivers and their habits, including the fact that a number sleep in their cars at night, while others regularly sleep in hostels and motels rather than traveling home between shifts. The article also says that half of its driving gets done by full-time drivers, despite Uber’s marketing to those who are looking for a “side hustle”. The pressure for Uber to treat at least these full-time drivers as employees with better benefits isn’t likely to go away anytime soon, and one of the biggest questions around Uber is whether it will ever be able to afford to give them what they want as it reaches the point where it drives towards profitability.
via When Their Shifts End, Uber Drivers Set Up Camp in Parking Lots Across the U.S. – Bloomberg
Uber to Pay $20 Million to Settle FTC Charges on Earnings Claims for Drivers – WSJ (Jan 19, 2017)
Uber has often been willing to flout regulation in order to stake a foothold in a market, at which point it typically turns its customers into advocates and makes arguments about the contribution it’s making to the local economy in a bid to win formal approval from local authorities. This case brought by the FTC alleged that Uber had exaggerated those benefits significantly – it claimed NYC Uber drivers earned a median income of over $90,000, but the FTC found that under 10% of drivers earned that much, for example. Because Uber settled the case without admitting formal wrongdoing, there is no legal confirmation here that Uber lied, but that almost doesn’t matter. To the extent that Uber gets a reputation (accurate or otherwise) for lying about its economic benefits, its whole “better to ask for forgiveness than permission” strategy starts to break down.
via Uber to Pay $20 Million to Settle FTC Charges on Earnings Claims for Drivers – WSJ
Lyft Co-Founder John Zimmer Drives And Dishes On Automation, Car Subscriptions, And Cash – BuzzFeed News (Jan 6, 2017)
An interesting tidbit in here – Lyft is already profitable on a per-ride basis, and the $150m or less it aims to lose each quarter is down to customer acquisition costs – free rides and so on. In that sense, it’s like many enterprise SaaS companies, and the burn rate is a factor of the rate of growth versus the base of customers. Lyft is much smaller than Uber, but also losing a lot less money. The key question therefore is whether it can at some point shift that balance between growth and profitability despite its smaller scale.
Lyft’s Ridership Reaches 52.6 Million in Fourth Quarter – WSJ (Jan 4, 2017)
This article highlights two things: first, Uber still dwarfs Lyft, with 78 million rides in December to the latter’s 18.7 million. Secondly, both companies are still growing ridership at a rapid pace. That’s important because although this sometimes feels like a zero sum game, it clearly isn’t, at least not yet. The overall pie is still growing, and even though Lyft’s slice is far smaller, that’s growing too. The question is how long both the overall growth and individual companies’ growth will continue.
via Lyft’s Ridership Reaches 52.6 Million in Fourth Quarter – WSJ
Uber expects to give 15 million rides this New Year’s Eve – Recode (Dec 29, 2016)
Three times growth from 2015 to 2016 is remarkable, and a useful indication of how fast this industry is still changing and growing. And yet peaks like this are still one of the biggest challenges for companies like Uber (and even Amazon, in a completely different way) – build your infrastructure for normal operation, and it’s tough to handle massive spikes in demand. Surge pricing helps a little, but you still can’t get out any more than your total number of drivers at any given time.
via Uber expects to give 15 million rides this New Year’s Eve – Recode
New Data Reveals Uber’s Economic Impact in France – Uber Under the Hood – Medium (Dec 28, 2016)
Part of Uber’s PR push to counter the narrative that’s developed about its antipathy towards regulation is this kind of stuff, designed to showcase the positive impact Uber has on local economies. This Uber blog post cites a Boston Consulting Group study, and highlights the positive contribution made by Uber and other transportation platforms. Apple has successfully used a similar strategy – citing app developer jobs, for example – in arguing for its own positive economic impact.
via New Data Reveals Uber’s Economic Impact in France – Uber Under the Hood – Medium
Uber moves self-driving cars to Arizona after SF setback – Financial Times (Dec 22, 2016)
Once San Francisco shut the Uber self-driving experiment down for flouting regulations, it was inevitable that it would move elsewhere. Arizona’s governor has courted autonomous driving trials, and is using the incident as a way to score points against neighbor California. But it’s worth remembering these are just 16 cars, and California was merely seeking oversight, not to block Uber here.
via Uber moves self-driving cars to Arizona after SF setback
The Third Transportation Revolution – Lyft CEO (Sep 18, 2016)
Lyft CEO John Zimmer makes two strong claims in this piece: autonomous vehicles will account for the majority of Lyft rides within 5 years (i.e. by 2021), and private car ownership will all but end in major US cities by 2025. Both of these claims are directionally correct – autonomous cars are absolutely coming, and thanks to ride sharing, many city dwellers will eventually abandon car ownership. But the timelines for both are likely dramatically over-optimistic. Most major car manufacturers aren’t talking about having production autonomous cars on the road until the early 2020s, and car ownership trends will shift much more slowly too. We therefore have to ask to what extent Lyft’s business plans are based on these over-optimistic goals.
via The Third Transportation Revolution – Medium
Master Plan, Part Deux | Tesla (Jul 20, 2016)
This is Tesla’s four-part new master plan for the next few years: “Create stunning solar roofs with seamlessly integrated battery storage; Expand the electric vehicle product line to address all major segments; Develop a self-driving capability that is 10X safer than manual via massive fleet learning; Enable your car to make money for you when you aren’t using it.” Autonomy and sharing – the last two bullets – are the key ones from a broader tech perspective, and this is the first hint we’ve had that Tesla will participate in sharing, though its vision is more aligned to the future vision of the Ubers and Lifts of the world than their current business model – autonomy + sharing. Given how effective Musk and Tesla have been at achieving the broad strokes of the first “master plan”, they seem likely to succeed again, and there are few concrete timelines here to miss.
via Master Plan, Part Deux | Tesla
Uber Could Be First to Test Completely Driverless Cars in Public – IEEE Spectrum (Sep 14, 2015)
This article is from when it first became apparent that Uber might end up being one of the first companies to put autonomous vehicles on real roads with real passengers, back in September 2015. Even then, Arizona governor Doug Ducey was attempting to entice technology companies to do their testing in his state, a strategy that paid off in December 2016 when Uber moved its second self-driving trial from San Francisco to Arizona.
via Uber Could Be First to Test Completely Driverless Cars in Public – IEEE Spectrum