Lyft vs. Uber: A Tale of Two S-1’s
Looks like Uber is better on every metric, total volume, growth, revenue, the only area they are behind is margin where they are taking less from their drivers than Lyft is.While Uber looks healthier especially given it's size, Lyft's reception after the IPO was quite negative, with the stock falling 30% immediately in the days that followed.Even with better economics and larger scale the larger question looms, which is how do these businesses turn profitable.Are they subsidizing a market and creating it by charging less, or will they reach a certain scale and be able to cut back on certain expenses which will give them profitability.I don't think Amazon is a fair comparison here, because they were investing in infrastructure, building out global logistics, which is different from Uber and Lyft. They should be much more profitable because they don't have to invest in that. They don't know warehouses and logistics, and everything else that e-commerce required.Also in the case of Amazon the supposed profits would be reinvested in the business with large CapEx spend, here it seems that the negative margins are being spent on sales and marketing, which isn't the same as what Amazon was doing when it was treading in the negative for a decade.