Can I still make money with Lyft?
$ 8.5 billion. That is the total loss of the driving service broker Uber in 2019, which as a private company had been able to market a growth story for years. After a few scandals, legal problems such as the "Gig Economy" law in California or the loss of a license in London and a disastrous IPO last year, investors want to know: Will this company become profitable at some point, and it will be for the future set up? The profit zone was actually planned for mid-2021, but now boss Dara Khosrowshahi said in an interview with analysts that he had asked his employees to do everything to achieve this goal by the end of 2020. The company had already laid off 1,000 employees last year.
This increases the pressure on competitor Lyft. Its IPO a few weeks before Uber's was no less disastrous. Lyft is releasing quarterly results this Tuesday (not known at press time). In the previous three quarters, Lyft had suffered a total loss of $ 2.25 billion, announced layoffs and admitted that it would only be profitable at the end of 2021 if it continued to save.
At the technology fair CES in Las Vegas, self-driving Lyft cars were once again on display, and with it the company's long-term strategy: Soon there should no longer be drivers in the cars, thus eliminating immense cost and uncertainty factors. In addition to ambitious competitors such as Ola, Hopskipdrive, Kabu, Via or Juno, this is the main problem facing the two top dogs. They have completely changed the taxi industry, a disruption that we still do not know whether it has really improved conditions on the roads: Numerous companies are experimenting with autonomous vehicles, which is why the concept with drivers - whether they are now permanently employed or not - is already considered a relic from the past.
Uber and Lyft must therefore manage the balancing act of positioning themselves for the long term, even with expensive investments, but making profits as quickly as possible.
Companies that shake up an industry are not always those that benefit in the long term - or does anyone still remember Tivo, Palm, Lycos, Friendster, Webvan or Everquest? No? Just. There were companies that were strategically better positioned afterwards.
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