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U.S. Slowdown at Uber and Lyft - The Information

Discussion in 'News' started by jocker12, Sep 12, 2018.

  1. jocker12



    The once-hot ride-hailing business is cooling down—just as the two biggest players are thinking about going public.

    Revenue growth rates for the U.S. ride-hailing businesses of Uber and Lyft slowed this summer to their lowest point in years, according to research firm Second Measure, which tracks credit and debit card transactions. Growth in the number of rides also slowed, particularly at Lyft, possibly reflecting price increases instituted by the No. 2 ride-hailing firm.

    It makes sense that the ride-hailing business would eventually mature after several years of rapid growth. In anticipation of that, both Uber and Lyft are investing in scooters and electric bikes as a way of reaching people who want to go only a short distance or don’t want to pay for a car. For investors in both companies, which are expected to go public in 2019, the question is what the growth rate will look like going forward.

    The answer to that partly depends on whether the companies can find a way to eat into the broader transportation market. Otherwise their U.S. growth will hit a ceiling and may begin to mirror that of the overall economy. That means increases of a few percentage points a year.

    The chart above shows the trajectory for U.S. revenue growth in ride-hailing for both firms over the past two and a half years. Uber increased U.S. revenue from ride-hailing by about 12.5% in July from a year earlier, the data show. That was down from an annual growth rate of 33.3% in July 2017 and 63.5% in July 2016.

    Meanwhile, Lyft’s business grew at an annual rate of 46.6% in July, down from 127.7% in July 2017 and 204% in July 2016. These growth rates may fluctuate up or down in the coming quarters, but the overall trend seems clear. Spokespeople for the two companies did not have a comment. However, a person close to Lyft said Second Measure’s data understates the company’s recent growth rate. Second Measure says it tracks about 3% of all credit and debit card transactions.

    The slowdown may be more worrisome for Lyft, which is several times smaller than Uber in the U.S. Lyft’s market share in terms of sales rose to 28% in July versus 23% a year ago, with Uber grabbing the rest of that share, according to Second Measure data.

    Lyft was hoping to transcend the slowing growth in the market overall by gaining share against Uber and eventually surpassing it. But Lyft’s gains appear to be slowing down, based on the Second Measure data and prior private comments from executives at both companies. Lyft’s share has only ticked up by one percentage point during the first seven months of 2018, the data show. That said, Lyft calculates its market share at 35%, in terms of the number of rides, and such a figure is supported by some third-party data.

    Other third-party data also imply Lyft’s ride-hailing growth relative to Uber will flatline. Data from App Annie, a mobile app tracking firm, show that in terms of app downloads per month, Lyft has had a 40% market share versus Uber’s 60% for the past year or so. And App Annie data show the companies currently retain customers at a similar clip. Unless Lyft improves its ability to sign up more customers than Uber, or improve how well it turns new customers into consistent ones, also known as retention, it won’t make much headway.

    Without closing the market share gap, Lyft won’t be able to generate as much in profit. It won’t have as much scale as Uber to cover costs such as marketing, research and development of new technologies like self-driving cars, which are many years away from meaningfully impacting the business.

    Lyft also doesn’t have as many additional possible avenues of growth as Uber—namely, food delivery and a truck freight marketplace—to appeal to institutional investors in the public markets.

    More importantly, Uber operates, and dominates, markets in other parts of the world, including the U.K. and Latin America, and the company’s executives haven’t been expecting short term profits to come from the U.S., according to one person with knowledge of Uber performance. (See the global ride-hailing map here.) Lyft operates almost exclusively in the U.S.

    Uber CEO Dara Khosrowshahi has talked up food delivery, freight, and small electric vehicles like bikes and scooters as the next big growth engines for his company. In a decade, he predicted those business would be bigger in terms of transactions than the Uber car-based rides business. In terms of growth, “we’ve got three [non-core] businesses that kind of look like UberX [Uber’s core business],” Mr. Khosrowshahi said at TechCrunch Disrupt last week.

    The slowing growth could mean investors will pay more attention to the two companies’ losses than their revenue. Lyft generated $1 billion in net revenue in 2017, though it almost certainly lost more than $500 million overall, based on results in the first half.

    That compared to Uber’s $7.5 billion in net revenue in 2017 and a net loss of $4.5 billion. Uber doesn’t break out its U.S. numbers, but the company is believed to generate most of its revenue there, so the overall slowdown will have an impact.

  2. But
  3. jocker12


    The "Potential" is shrinking as we speak. The investors are constipated. Soon they will invest in sharing their underwear.

    We need to give them mirrors to see how their shared stupidity looks like.
    Bro Olomide, Lee239, GT500KR and 2 others like this.
  4. Vampires cant see themselves in mirrors.

    Blood Sucking Parasites on Humanity !

    Attached Files:

  5. KevinH


    San Francisco
    Another hail Mary pass gone wrong?
  6. Exactly Back where it started.

    New Fad !

    We pay You to deliver !

    We pay to show Market Share

    Ponzi . ..

    Coming Soon


    Attached Files:

  7. "Why is uber Snow plow available nation wide?"

    "Because people want an affordable snow plow service all across the US"

    "But why places like Miami?"

    "Shut up, quit stiffing our innovation"

    Uhh... hand me back those safety scissors... i'm suddenly not trusting you...

    2 weeks later...

    Work for uber Snow-plow in Orlando, make up to $40 per hour!
  8. Somewhere
    A Snow plow is getting Sand off the sidewalk . . .

    Attached Files:

    Roadrunner 750 likes this.
  9. FormerTaxiDriver♧


    The overall business gets slow during late summer as I experienced this driving a taxi. This slow down trend predates Uber and Lyft.
    GT500KR likes this.
  10. jocker12


    That graph shows 2 years of decline. Their pitch they kept hypnotizing investors with was “growth potential” which is slowly but steadily vanishing.

    Anybody wondering why both companies want to go public and sale shares to the general public?
    Jo3030 and Bro Olomide like this.
  11. no wonder gryft has completely turned off prime time. they must be shaking in their little pink shoes.
    Jo3030 and GT500KR like this.
  12. HotUberMess


    I said it yesterday: it’s easier to lie to small investors
  13. goneubering


    LA/Orange Counties
    I don’t see Lyft ever catching up to and surpassing Uber.
  14. jocker12


    At this point, most of the media is being used to intoxicate the public, because the public simply believes what is being told.

    If and after the initial investors will recover their initial investment with a nice profit ($17 billion initial investment at a $110 billion estimated value for Uber is 6.4 times their money), they will wash their hands, and when the “new” company will face the real market realities (company not being able to use free cash anymore to subsidize insane ideas or stupid projects) no original investor will be to be blamed because the present lie is that both companies are doing great, pursuing new and challenging ways to grow, in many transportation related fields, with an enormous technological “potential” regarding advanced technologies like flying or self driving vehicles.

    Actually what they are doing is adding more useless junk on cities streets.

    Lyft is like the little brother doing whatever the big brother does, when the performance and possibility of success in any field will come from doing exactly the opposite of what your competitor does.

    But these are pathetic millennial nerds thinking they’ve already conquered the world, made few bucks and disrupted the pathetic reptile that the cab industry used to be.
    Last edited: Sep 13, 2018
    Rickshaw and HotUberMess like this.
  15. hanging in there

    hanging in there

    Orange County and LA County
    Uber Lunar Rover: complimentary water, mints and green cheese wedges. Perk for drivers: less gravity= higher MPG or more miles per charge.
    tohunt4me, Bro Olomide and mrpjfresh like this.
  16. GT500KR


    Perrinville Wa.
    Mommy mommy the driver is shutting off my oxygen!!
  17. UberLaLa


    LaLa Land
    Best news I've heard this week!
    Jo3030, tohunt4me and Rickshaw like this.
  18. Lee239


    Lee county fl
    Uber is going to want to start monetizing walking too.

    No what they are saying is that this summer it has slowed down more than previous years summers meaning it seems to have reached it's grown peak.
    tohunt4me and Bro Olomide like this.
  19. LoveBC


    Orange County
    Really?? Did anyone get a piece of these increases?
  20. Paxs who cannot use bikes/scooters:
    -those going long distance,
    -with luggages,
    -with disabilities,
    -more than 1 pax,
    -seniors and minors,
    -those who do not want to,

    Bikes and scooters may supplement X in downtown but will not be bigger than car-sharing.
    Wonkytonk, HotUberMess and tohunt4me like this.

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