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Home / Business / Analyze what Lyft's IPO means for Uber and the future of mobility – TechCrunch

Analyze what Lyft's IPO means for Uber and the future of mobility – TechCrunch



Extra Crunch offers members the ability to tune into teleconferences hosted and moderated by TechCrunch authors who read you daily. This week, TechCrunch's Kirsten Korosec and Kate Clark talked profoundly about Lyft's initial public offering and prospects for further business.

After Lyft's shares rallied nearly 10% on its first day, Lyft's share price declined again on the initial public offering, as some investors became increasingly concerned about the company's path to profitability (or lack thereof) and about the company's long-term fundamentals. However, the public listing of Lyft is larger than just the latest in increasingly frequent flotations for unicorn. As the first public transport-as-a-service company Lyft provides a first insight into the business model and its economy, and its development can ultimately serve as a canary in the colliery for the company's future of transportation.

"Lyft not only survived, they grew. 18.6 million people had driven at least once in the last quarter of 2018. This is an increase of 16.6 million at the end of 2016. This shows the growth of the company. They also said they have a 39% market share in the US Ride-Sharing market. That's an increase of 22% in 2016.

For me, the big question is, say, they had Uber share, what's 66%, could they make a profit? Is that the determination? And I'm not convinced that this is the case, which is why all these other aspects of the business model Transport-as-a-Service [micromobility, AVs, etc.] will be really important. "

Photo via Getty Images / Mario Tama [19659006] Kirsten and Kate go deeper into what Lyft's market reaction to Uber and the timeline for the upcoming IPO mean. The two also respond to their skepticism about the economics of driving and debate which innovative transport model will ultimately lead the way to profitability for Lyft, Uber and others.

To access full transcription and call audio, and to have the opportunity to attend future conference calls, join Extra Crunch. Find out more and try it for free.

Danny Crichton: Good morning and good morning, this is Danny Crichton, editor-in-chief of Extra Crunch. Thank you today for meeting TechCrunch reporters Kate and Kirsten.

I start today with a short introduction for our two authors. We have Kate Clark, our venture capital reporter. Kate has been with us for a while, covering everything in the startup and venture world. She is also a host of TechCrunch's Podcast Equity and also writes our newsletter, Startups Weekly.

Our other writer today is Kirsten, our intrepid automotive author who covers everything about Elon Musk, Tesla and everything else in the autonomous vehicle space. Kirsten has also been with us for a while and also writes a newsletter that she has presented in recent weeks around the transport. So I'll pass the call on to the two now.

Kirsten Korosec: Thank you Danny. This is Kirsten Korosec here. The newsletter is a little gentle, but it will be released on Fridays. We hope that an e-mail subscription will be available in the future. So keep an eye on it.

I should also mention that I also have a podcast with autonomous vehicles and future transport called "Autonocast", which appears weekly. Thank you for your participation and just a reminder, we would like to participate. Halfway we turn the line and answer questions. Let's go.

Before we dive into all the hot takes outside, I think it's worth delivering some kind of primer – a general timeline of events. We all know Lyft, of course, and most of us are thinking of the start date of 2012 when it came to San Francisco. But Lyft was actually built from the service of Zimride. Which is the ride-sharing company that John Zimmer and Logan Green founded in 2007?

In the year 2018, Lyft was given much attention to the IPO. But I think it's worth mentioning what intense activity and growth took place between 2014 and 2016. These are crucial years for Lyft, a busy activity at a time when the company was gaining ground, investors and partners. [19659002] To demonstrate the activities that have occurred; Lyft had two separate rounds of financing, one for $ 530 million, another for $ 150 million, just two months in 2015. You may also remember the partnership with GM and the $ 500 million auto makers' investment as part of the start of 2016 Series F $ 1 Billion Dollar Fundraising Efforts.

That was really interesting, because GM president at the time, as Dan Ammann took over his place on the board, which he has now left. As Lyft and GM realized they were competitors. Now Dan is CEO of GM Cruise, GM's self-propelled unit.

2017 and 2018 were also big years when Lyft launched its first international market in Toronto. They made big strides in the autonomous vehicle front that we will talk about today, and in micro-mobility. Their scooter business was founded in Denver in 2018. They bought Motivate, the oldest and largest electric bike company in North America. Then we finally get to the end of 2018, and then Lyft confidentially makes a statement to the FDC and we go to the races for the IPO.

For the past two or three months, Lyft has published his prospectus, meeting with investors, forgiving his IPO and making his public debut. So, Kate, what are the basics of the IPO and what is happening right now?

Kate Clark : Hello, this is Kate. Therefore, I will mention the timeline in the last few months in the run-up to Lyudes very historical IPO very quickly. So back in December. At that time, Lyft had confidently registered for the IPO. Later, we find that they go public on the NASDAQ when they finally unveiled their S1 in early March.

This is the case after Lyft raised $ 5 billion in debt and equity at a $ 15 billion valuation, so there are a lot of people on the first rideshare. Pay attention to IPO. At the beginning of March, let's take a closer look at Lyft S1, which tells us that the company has losses of $ 911 million and sales of $ 2.2 billion in 2018. After some data has been calculated and compiled, many people quickly realized that Lyft has some of the biggest losses ever made on an initial public offering. But even some of the biggest revenue ever for a pre-IPO company follows Google and Facebook in this category.

So this is a really interesting IPO for many people who have these high losses but also those huge, huge revenues. Next, we see that Lyft costs its IPO between $ 62 and $ 68 per share. Some people quickly said that this may have been a little undercut as this was a much-anticipated IPO with a ton of demand. On the second day of the Lyft Roadshow, the trial, it is said that their IPO was oversubscribed. The demand is obviously huge, their oversubscription, so they decide that we will raise the price of our stock.

Image via GettyImages / maybefalse

So Lyft says that they will ask for a maximum of $ 72 per dollar, and on the IPO they charge $ 72 per share, the next day $ 87 per share. So we see a huge IPO pop, which I do not think is particularly surprising, as he already spoke of this demand, and we already knew that there was a lot of demand on Wall Street. Not just for Lyft, but only for unicorn IPOs of this size, as there are so few of them. So Lyft started trading $ 87 a share if you followed the news that is not Lyft today.

Kirsten: Yeah, so I just wanted to ask – Kate giving I know, the latest numbers, you know that there's a lot of focus on that opening day, but things just did not hold up , So what happened in the last days?

Kate: Yes, it's really difficult to meet the expectations of an IPO. I mean, I think Lyft has been criticized a lot now and I think the price is below its original stock price. As I mentioned earlier, Lyft was opened at $ 87 per share. The price was 72 US dollars. So they ended trading on Tuesday at $ 68.96 per share. Still with a market capitalization of more than $ 19 billion. So you're still valued at more than $ 15 billion by more than one private company, but it does not look good to trade below price per share.

However, it is true that today I have reached the IPO price for a minute today, maybe we give it a few more hours and see where it closes. It is possible that it will jump towards the $ 72 mark, but it is still a significant price below the $ 87 mark.

Kirsten: With such IPOs and, above all, such high-profile, there is a lot of attention to the stock price and the volatility. And so I ask myself from your point of view, what did that first week or the first days of volatility tell you? What does it say about Lyft's future and certainly his presence?

Kate: Yes. I mean, it's hard to say. I think a lot of people asked if Wall Street was interested in a company like Lyft, which is extremely unprofitable at the time and has years to go before it becomes profitable, if it becomes profitable at all.

So, at this point, you had to wonder if some of these investors, who bought Lyft right away, were they really long on Lyft? Because it looks like many of these investors have already sold their shares and may not have been so invested in Luit's long-term viability plan that includes many very volatile things, as the future of autonomous vehicles we see will speak later. And there is a lot of uncertainty.

But with that statement, it's not uncommon for a stock to experience volatility right away, and you can not just assume the future of that stock price of early volatility.

We have collected some examples of initial public offerings that have experienced early volatility that has not determined the long-term future. For example, Carvana, an online used car dealer in the automotive sector, initially experienced volatility, with stock prices declining over the first few months and eventually trending higher.

Kate: So Carvana opened at $ 13.50 a share and fell under its IPO, so there was not even an initial public offering. And in 2018, it reached an all-time high of $ 65 per share. Today, it's around $ 58 a share, which is ultimately a positive story.

And on the other hand, Snap is another example that has taken four months to the IPO price of 2017, and we all know that Snap was definitely not a success story and trading well below its offer price lies. But after all, Facebook fell short of its IPO on the second day of trading, and then the stock market had a tough first year before the stock finally gained momentum and became an obvious success. [19659002] Kirsten: So, Kate, I'm wondering why you think that this first attempt came on that first day. Was it excitement? Was there any material that drives up the price? What was the cause?

Kate: I think there was a lot of excitement and demand for this IPO, because it was very unique and there was a lot. It seemed that the number of investors who Lyft to this had made extremely profitable business, really long time seemed. And I think that was a big part of the fact that in S1 they really did see these really big losses – pretty big, just ridiculously big losses – they've seen that they shrank over time and that there is definitely a way Lyft could go there in the next five years, where it would be profitable.

And I think Wall Street really paid attention, and they did not pay attention to other metrics. Now they have taken off their pink glasses, and they consider Lyft as a public company, and it's just a bit different after they've actually completed their debut.

Kirsten: Well, I mean, I like watching IPOs often and especially in Lyft's case as a measure of investor confidence in the company's growth prospects, because this is a company Although it has a very good company, some revenue, it has significant losses and it is really planned not only for the present, but for the future. It has been called a disruptive business for a reason and is certainly very forward-looking. So I'm wondering if you think it was a good strategy for Lyft. They wanted to open it to "Everyman" when they actually went to the market. You have chosen a different approach and do you think that has had an impact? I mean, it's very good for them to do that, but I wonder if you think some investors are not that disciplined.

Kate: Do you mean by granting bonuses to your employees and drivers in order to actually participate in the IPO?

Kirsten: Absolutely. This is really a really good point that you can perhaps go into more detail. Lyft has made its IPO a bit more open. As a rule, IPOs can only be blocked for large institutional investors. Has this perhaps led to higher volatility?

Kate: Yes, Lyft supplied some of her drivers up to $ 10,000 to theoretically buy stocks the IPO Did I think that had a big impact? I dont know. I think that there are not enough comparisons, not enough data to really make a decision or take a hot look at whether this was really part of the volatility. I think given the uncertain future of Lyft and its huge losses, I think their volatility was quite unavoidable, and I think the people who are paying attention to this probably will not be particularly surprised at how the stock is developing in those early days Has.

And I would like to add that there is a six-month vesting period for the venture capital funds owned by Lyft and their employees. I think we are not sure what will happen if this vesting period ends and these holders can then sell their shares directly or how this will affect the stock price.

image via TechCrunch / MRD

Kirsten: So something to keep an eye on. It reminds me a lot about a company that I write a lot about, namely Tesla, and I have been dealing with them for years. And it's one of the most volatile stocks, and its investors certainly have big institutional investors, but the number of fanboys they have with smaller investors sometimes boosts the stock price or somehow increases that volatility curiously to see if that happens to Lyft. For example, going to a shareholder meeting in Tesla is filled with people who love the brand and its CEO, Elon Musk.

And Lyft and possibly Uber if they finally land If you go through the IPO, you may find that this is potentially happening because people are very concerned about the brand and the service it provides Hearts lie. So I'm curious how it all comes out. And I tend to argue that I personally invest in mutual funds and the like. I do not invest in one of these companies, but the long, patient view tends to be the better, and trying to catch a falling knife, as investors have told me, is never really a good idea. [19659002] So, I'm curious to see if Lyft's investors will grow up any more and learn if they'll be disciplined and simply wait until they can capitalize on the company's long-term growth prospects. So we talked about Lyft and so I can not talk about Uber. I wonder what you think might mean for Uber. The big story was first to beat Uber against the IPO, and I wonder what that means. Is that an indication of what Uber will experience?

Kate: I think this question is in everyone's mind right now, including my own. I'll say that I still think it was very beneficial for Lyft to come out first. Imagine if and when Uber also experiences volatility, which is likely to be the case if he had gone first, I think that would have scared Lyft more than Lyf's volatility shocked Uber or not. With these words, I think I have two views right now, with my thoughts on how this will affect Uber's IPO. I think that if the Lyft stock continues to be volatile and perhaps even falls below it, it has not fallen yet. I think there is a chance that Uber will eventually decide to strike back on its IPO.

I think that for some reasons, Uber is not in the public domain. You have the ability to wait. You have requested to go public. So it's likely to happen soon, but it may not happen in April, as it's supposedly planned.

On the other hand, Lyft went public with a market capitalization of $ 24 or $ 25 billion. Uber will debut with an initial market capitalization of perhaps $ 120 billion. Although these IPOs are both walk-in IPOs and are very similar in many ways, they are also very different and Uber works on a completely different scale, though it is still unprofitable. And has some of the same problems that investors probably know about Lyft.

I think it's either going to be that they might decide to push it back, or maybe Uber is like we're five times bigger, six times bigger. We have much larger statistics that we can show to investors. There is only one chance that it will work this way or that. I wish I had a better, more concrete answer, but I just do not think we still know.

Kirsten: Well, it's okay to not only take a few days off hot in this IPO. I think this is a good time to open it up for questions. While we wait for a question, I'll do a quick follow up with you, Kate. What does that mean for Uber? Is it delaying its IPO?

Kate: Right now, no, I do not think they'll go there. But it's like I said, it's hard to say, since it was only a few days after the IPO of Lyfts. But no, I think you have to imagine that they are ready to discuss the possibilities of an initial public offering by Lyfts and are already planned in advance in the event of volatility. You may have already assumed that this would happen as this is not uncommon. So I'm going to say no, I do not think they'll be delayed, but it's certainly a possibility.

Kirsten: Okay, great. I think another very interesting piece for Uber was the acquisition of Careem. This is a deal that was hit just before the IPO. So for a moment he shifted Lyft's attention.

Why did Uber do that? Is not this a signal that they are delaying their IPO? Is that just a preparation for it? What do you listen to? I wonder if this could just have been a strategy to show the world's investors, especially potential shareholders, what the future will look like. Or is it another reason – is it to justify their really big losses?

Picture on Careem / Facebook

Kate: I think the last two things you said. Just to give some background, Uber pays about $ 3.1 billion for the acquisition of Careem, a Middle Eastern company. So basically just the Uber of the Middle East. Uber has in the past acquired smaller competitors such as these in various markets in which it is not active, only to grow Uber quickly significantly.

I think it's a big deal just before the IPO I think we do not know if they will necessarily go public in April, but I think it was a step, public investors in preparation for an IPO to show "that we've just acquired this company, here's more evidence of future growth." As you've already mentioned, this is definitely a justification for these tremendous losses Uber knows.

Kirsten: Thank you for that.

Caller question: Hi everyone, so when we talk about looking ahead and profitability – what role if anything, do you think of acquiring a scooter or other mobility company for companies like Lyft and Uber?

Kir s ten: That's a great question I think it will be a big part of their two businesses. Many people describe this as the first IPO. We must stop calling this company a passenger. These are transport companies that make money. However, generating revenue as opposed to profits is a very different thing. When you start talking about ridesharing, it's a tough business. It's an easy business with these, right? They do not own the cars and then they do not employ these drivers technically.

But at the same time, as of 2016, only about 1% of US citizens use Rideshare. So you see this opportunity, but they are not pushing forward. There is still a ton of car ownership. Yes, sharing has gone up, but last year 17 million new cars were sold in the US. Scooters, bike-share and other companies are therefore the key to their path to profitability, since driving alone is difficult to achieve. It is not difficult to generate revenue. It is difficult to make a profit.

And I wonder how I talk about this path to profitability. I think it's worth noting how much they've grown. Lyft not only survived, they grew. 18.6 million people had driven at least once in the last quarter of 2018. That is more than 16.6 million at the end of 2016, which illustrates the growth of the company.

They also said they have a 39% market share in the US Ride-Sharing market. That's an increase of 22% in 2016. For me, the big question is, say, they had Uber share, which is 66%. Would you be able to make a profit? Is that the determination? And I'm not convinced this is the case, which is why all these other aspects of the business model of transport-as-a-service will be really important.

Kate: I think what you have pointed out is important. Lyft and Uber become both transport companies and not rides. I think their long-term visions include scooters, bicycles, autonomous vehicles and all sorts of transport models that go beyond car sharing.

Kirsten: I hate washing here and say, I do not know, but I really believe that it matters that different things come together. It is simply not enough for Lyft to expand the business with the ride. And I should point out that Uber should be treated in the same way, but there are some differences. But it is important for us to understand Lyft as a transport company. I mean, they say in their brochure that transportation is a huge market opportunity. The hard part, of course, is to make a profit from it. There may be an opportunity there.

So there's this asset-light business they have right now, Knights, but then they make acquisitions in the micro-mobility space, and that will be more capital-intensive. And that forces her to change her business. And then there is the autonomous vehicle piece. And finally, I do believe that one of the parts of your S1 that has not really received much attention at all is what they are pursuing in terms of public transport. And they said that she and Uber intend to be part of the public transport ecosystem.

That does not mean they will necessarily drive buses, but there are people I've talked to in the industry who actually feel they want to control all means of transport in Uber's case , For Lyft, I see that they will see the opportunity with the data piece financially better and become a platform and become a one-stop-shop, where you can use an app to find out if you want to use a scooter or a bicycle or drive -hailing or buy this ticket for the L in Chicago or the beard system.

I really think that public transport is often ignored and the cities now have so much more control and balance. We see it in New York City with jam calculations. Lyft and Uber will be forced to take advantage of these opportunities and use their platform in a way that may accelerate faster than intended.

Kate: I'm very interested in the public transport part, but I'm also very skeptical about what Lyft will do with scooters and motorcycles in the future. I do not think that given the economic unity of unity, I would not rely on it being Lyft's path to profitability. I think autonomous vehicles are a much more interesting way to profitability. Many companies, Uber, Lyft, Waymo and others, focus on autonomous vehicles and their development, be it with hardware or software. How is Lybst's strategy with autonomous vehicles different from other competitors or is it different?

Kirsten: It differs, and the funny thing is that you do not do that I see micromovement as necessarily the oath of profitability and I'm interested in AVs and I write about AVs, but me see AVs as a harder path to profitability because of the bolts and nuts it takes to develop them.

So, just to really weigh in on the micro-mobility piece, and then I switch to AVs; To show the chance, but also the volatility, in a real example of micromobility, I was in Austin for South by Southwest. I think you were there too and you probably saw scooters everywhere, right? Eighteen months ago, there were no scooters or motorcycles in town. Then the bicycle share came first.

Bild via Flickr / Austin Transportation / https://www.flickr.com/photos/austinmobility/41536051644/in/album-72157669223418248/[19659006?BürgermeistervonAustinundeinerderLeuteausSpineinemGeschäftdasFordgehörtundsieerzähltenmiretwasdaswirklichbemerkenswertwarworüberichnichtnachgedachthattenämlichdassRollerdasGeschäftmitFahrradaktienstörtenAlsokamenFahrräderzumEinsatzunddannkamenMotorrollerundplötzlichzerrensieFahrrädervonderStraßeweilniemandsiebenutzteodernichtaufdemgleichenNiveauwieMotorrollerverwendete

Lyft wird genau diese Wachstumsschmerzen durchmachen und die Leute erfahren, was funktioniert. Und wie Sie schon erwähnt haben, die Wirtschaftlichkeit der Einheiten ist ein Thema, die Abnutzung der Roller allein führt zu hohen Kosten und Einnahmen, was die Gewinnbeteiligung ziemlich erschwert.

Aber das ist ein kurzfristiges Geschäft, richtig? So generiert es zumindest jetzt Einnahmen. Auf der anderen Seite haben Sie dieses andere Stück, das AV-Stück. Lyft macht ein paar wirklich interessante Dinge mit dem AV-Stück – sie haben einen zweigleisigen Ansatz.

Sie schufen im Grunde eine Menge Partnerschaften, um ihre Plattform zu nutzen. Dies begann vor ein paar Jahren und Unternehmen wie Aptiv, drive.ai, sogar Waymo und nuTtonomy, die Aptiv vor etwa einem Jahr und GM gekauft hat, und Lyft erlaubt Entwicklern grundsätzlich, ihre Plattform zu nutzen und eine Verbindung zu ihrem autonomen Fahrzeug herzustellen Diese Fahrgeschäfte anbieten.

Und das beste Beispiel dafür, wenn Sie auf der CES waren oder wenn Sie in Las Vegas waren, sollte ich genauer sagen, ist diese Partnerschaft, die Lyft mit Aptiv hat – und Aptiv als Tier-1-Lieferant, sie wurden früher Delphi genannt, sie drehten sich heraus, sie kauften nuTonomy, und jetzt sind sie Aptiv. Und dazu braucht Aptiv automatisierte BMW, die sich im Lyft-Netzwerk befinden. Wenn Sie eine Fahrt begrüßen, werden Sie möglicherweise gefragt, ob Sie ein selbstfahrendes Auto wollen, oder "sind Sie mit einem selbstfahrenden Auto in Ordnung?". Sie haben einen Sicherheitsfahrer, es wurden noch keine Menschen davon abgezogen. Aber sie haben ungefähr 35.000 Fahrten zur Verfügung gestellt, seit ich den Januar 2018 sagen möchte.

Dann machen sie auch Level 5, eine dedizierte selbstfahrende Fahrzeugsparte, die 2017 gegründet wurde Erstellen eines offenen selbstfahrenden Systems oder eines offenen Sicherheitsdatenblatts. Darüber hinaus haben sie sich mit Magna, einem Hersteller von Autoteilen, zusammengetan, um diese selbstfahrenden Systeme zu entwickeln, die im Maßstab hergestellt werden können.

Und so sehen Sie nur einen Ansturm von Partnerschaften und Sorten von zwei Ansätzen und all das kostet viel Geld. And I can’t emphasize the amount of money that it costs or will cost to develop these systems and deploy them commercially. And I hear from other companies figures like $5 billion to get self-driving vehicles. So developing the full stack, doing fleet management, maintenance, all of that — that’s a lot of money. And, I’m not sure where Lyft, will get that capital, will they get it from the open market or will they have to go and ask for more capital.

Kate: So when do you think then that Lyft will be able to commercialize autonomous vehicles?

Kirsten: The timeline? So depending on who you talk to, you can hear from any of these developers between five years and 30 years. I think it’s important to talk about language and how we talk about autonomous vehicles. So to be clear, there is currently not a single commercial autonomous vehicle deployment where a human being or safety driver has been pulled away from the wheel. It just doesn’t exist.

There are plenty of pilots and Waymo is probably considered the leader in that list, though it is a bit of a confusing one for me because they have so many partnerships and they’ve become competitors to some of those partnerships. The analogy I use is “Survivor,” the reality show. Everyone wants to make these alliances so they don’t get voted off the island.

And now we’re at that point where autonomous vehicle development has entered what we call the trough of disillusionment, which is heads down, “let’s get away from the hype, let’s do the hard work.” And I think we’re going to see a lot of those partnerships and headwinds really come up in the next year, 18 months. So to put a target date on Lyft, it’s really going to depend on which one of those partnerships really play out and are real. I think the one with Aptiv seems the most real to me based on what I know the company is doing and I can see them doing a lot more pilots in the next 18 months.

Does that mean commercial deployment without a human safety driver behind the wheel? I’m not sure I can see a lot more these pilots with a human safety driver expanding beyond Las Vegas. I see pilots happening absolutely in the next year to 18 months. The issue is going to be when is that human safety driver going to be pulled out and with which partner.

Kate: So should we open it up to questions again?

Caller Question: Hi, I was just wondering how we should think about the regulatory risks that might exist as these companies expand to new cities, new markets, or even the public transport use case you mentioned. Thanks.

Kirsten: The regulatory piece is an interesting one. Let’s talk about ride-hailing first. We’ve already seen the regulatory environment, in cities, push back against companies like Uber and Lyft. I think the congestion pricing model that just launched in New York City is going to be one to watch and could be something that will put pressure on, on businesses like Lyft.

Kate: I agree and just to speak, quickly on the scooters; I think the narrative around scooters has been pretty dominated by how cities have forced them out or cities push these strict regulatory barriers on them. And I think that’s still playing out very much. There are even some scooter providers that have had to pull out of cities that they worked very hard to get into in the first place. So I think that has slowed down some of the growth there. And given that Lyft has micromobility as such a key part of their road to profitability, I think that’s partially why I am a little bit skeptical of how that’s gonna play out.

Kirsten: One thing we’ve found, and something to consider for Uber as well, in the future, if any of these AV developers end up, filing for IPOs on their own — there’s been chit chat about Waymo someday doing that or GM cruise someday— the implications for all of these companies and their relationship with cities should not be ignored or undervalued.

And I think you see a bit of that playing out with the present day track we have, which is the ride-hailing scooters and bike share cities and transit agencies or the DOT of different counties finding that they are in a more powerful position than they’ve ever been before. And they are exerting that power.

And so you will see instances like Los Angeles where they have put forth a mandatory data sharing component if you want to operate in their city. This raises some privacy concerns by the way, but it also adds another cost to a company or certainly forces them to look at their business a little bit differently.

Then you start talking about AVs and where are they will operate, how they will operate, where are they will park, what type of vehicle will be allowed in the urban center. In places like Europe, there are strict emissions rules, so that’s going to go to an AV or hybrid profile. And it’s important to think about what that regulatory framework might be and acknowledge the fact that it’s really a mishmash.

There are voluntary guidelines on the federal level right now, but there were no mandates. And so it’s really left up to the cities, counties and states to decide how an AV might be deployed. It’s going to mean probably more lobbyists in DC working with federal folks to ensure that their business doesn’t get hamstrung as a result as well as more of a presence in those cities and states and counties.

But Kate, I’m wondering what is your view from a startup perspective? Do you think of Lyft as a startup anymore are they acting like a startup or are they acting like a company that could handle all of these different complicated, various challenges? I mean, we’ve got pricing pressure, regulatory pressure or you’ve got AV development, opportunities with scooters and all this other stuff. So are they acting like a company that is able to handle this?

Image via Getty Images / Jeff Swensen

Kate: That’s an interesting question. I mean, they’re definitely not a startup anymore by, by anybody’s definition. You maybe could have still used that word, if they were still private, but even then, I know many people would yell at you for using that term for a company worth $15 billion. But now it’s a public company. It’s not a startup. I don’t think they’re acting like a startup, no. I think that they are mature in the way that they’re handling all of these different, so-called paths to profitability.

But we need to wait and see. Let’s see how this year goes, let’s see how they handle all the criticism that they’re going to undoubtedly take from Wall Street or from everyone who’s either interested in buying or just taking a seat and watching how the stock favors and then we’ll know what kind of lessons they took from all those years as a private company. Then we can decide if their behavior is really that of a mature public company.

Kirsten: I do want to make one point that I think is an interesting one on Lyft’s strategy versus Uber is in terms of AVs. Let’s all put a big asterisk that says no, AVs are still a ways out. It is important to note the Lyft and Uber’s strategies for AVs are wildly different and Uber does not take this dual approach. Uber is throwing a ton of capital towards developing their own, self-driving stack and also they’ve done, some acquisitions as well.

They’ve also had quite a bit of trouble. Last year Uber had the first self-driving vehicle fatality that happened in Tempe, Arizona, which looked like it was going to derail their self-driving unit, but it did not. They’re back, testing in a very limited way, but Lyft’s is all about what they call the democratization of autonomous vehicles.

And we can look at that as marketing speech, but I do think that it’s important to look at those words because it shows what their business model is. Their business model is partnerships, alliances, opening up the platform and casting the widest net possible. What I’m very interested to find out is which approach will end up being the winner. It’s going to be a very long game. It’s not going to be anything that’s going to be determined in the next year. I think what Lyft’s proven is that when they look like they’re down and out, they come back.

We’ll see what the better approach is. Do you do everything in-house and launch your own robo-taxi service? Or take capital partners on or do the Lyft approach, with multiple partners? Are partnerships actually too complicated? As someone who covers the startup world, do you have a thought on which one might work or not?

Kate: I have no idea which will work better and I’m sort of excited to see where this all goes, especially as Uber and Lyft are now going to be public.

That’s a good spot to end the call on.

Kirsten: Thanks so much for joining. Thanks again for being Extra Crunch subscribers, we really appreciate it. Bye everyone.


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