# Losses From Uber, Lyft Suggest the Current Ride-Hailing Model Doesn't Work



## Michael - Cleveland (Jan 1, 2015)

https://www.fool.com/amp/investing/2021/05/10/quarterly-losses-uber-lyft-confirm-ride-hailing/

*Quarterly Losses From Uber, Lyft Suggest the Current Ride-Hailing Model Just Doesn't Work*
James Brumley
May 10, 2021 at 10:39AM

Both companies are looking for operating profitability in the near future, but questions about how that will happen remain unanswered.

The business premise seems sound enough, at least on the surface. The problem: Owning a vehicle is more trouble than it's worth, but taxi cabs are costly and so yesterday. The solution: Just use a mobile app to summon a contracted driver who will ferry you from one place to another at a more efficient (i.e. cheaper) price. Everyone wins.

Except not everyone is winning with this modern-day business model. Shareholders of ride-hailing powerhouses Lyft (NASDAQ:LYFT) and Uber Technologies (NYSE:UBER) just saw another quarter of steep losses.

It's past time for investors to ask what the plausible path to profitability looks like for these companies.


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## SHalester (Aug 25, 2019)

lost me at 'powerhouses'.....

but yes Uber will need to address its cash burn rate pretty darn soon or their cash and near cash balances will reach near zero balance in a few quarters.


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## Michael - Cleveland (Jan 1, 2015)

I've been saying that for about 5 years now!


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## The Gift of Fish (Mar 17, 2017)

Michael - Cleveland said:


> Quarterly Losses From Uber, Lyft Suggest the Current Ride-Hailing Model Just Doesn't Work


 🤣 
In other breaking news, scientists discover that fire is hot and water is wet.


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## 25rides7daysaweek (Nov 20, 2017)

This company has made 25k 
per year profit just on my work. 
Its not the business model
Its the businessmen...


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## The Entomologist (Sep 23, 2018)

I bet they are doing something shady to show losses, maybe siphoning the cash in some other way?

No one is this incompetent, not even Uber.


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## Aw Jeez (Jul 13, 2015)

One of the advantages of early Uber was that it was cheaper than a taxi. Obviously...OBVIOUSLY!...that is going to have to change. I don't know why Uber has not already raised their rates to _at least_ what legacy cabs are charging. People (customers) will NEVER go back to riding in taxicabs. Not to mention that taxi companies cannot do what we do. If Uber wants to be profitable, they should raise their rates to $2.00/mile (or maybe $2.50) everywhere. Problem solved?


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## Bojingles (Sep 18, 2015)

Can't re event the wheel,you can make it better or worse. Gimmicks don't work if you're seeking longevity.


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## Bojingles (Sep 18, 2015)

Cost of doing business is increasing and they decided to resort to the old BS


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## kenyarc (Aug 18, 2020)

Michael - Cleveland said:


> https://www.fool.com/amp/investing/2021/05/10/quarterly-losses-uber-lyft-confirm-ride-hailing/
> 
> *Quarterly Losses From Uber, Lyft Suggest the Current Ride-Hailing Model Just Doesn't Work*
> James Brumley
> ...



I drove Empower for a month and made really good money. Being able to set my own rates and my own surge was awesome. I even included my own tips in the fare.
Empower has a lot of riders but not enough. Uber and Lyft have All the riders.
To be profitable Lyft and Uber should end their business model and use the Empower business model. Just charge drivers a monthly subscription fee for use of the app. $200 MONTH is fair since they have so many riders. Problem solved. Win win for everyone.


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## HPRohit (Apr 9, 2018)

Michael - Cleveland said:


> Except not everyone is winning with this modern-day business model. Shareholders of ride-hailing powerhouses Lyft (NASDAQ:LYFT) and Uber Technologies (NYSE:UBER) just saw another quarter of steep losses.


"Uber UBER, +0.61% Chief Executive Dara Khosrowshahi’s compensation last year was $12.2 million, a 71% decrease from the previous year, according to the company proxy released Friday. The CEO-to-employee pay ratio, disclosed as required by law, was 123 to 1, with the annual median pay for Uber employees working out to $99,382.
...
Chief Financial Officer Nelson Chai’s total 2020 compensation was $11.64 million, while that of Jill Hazelbaker, senior vice president of marketing and public affairs, was $12.61 million. Tony West, chief legal officer, took home $12.3 million, while Nikki Krishnamurthy, chief people officer, had $5.18 million in compensation. The compensation for former Chief Technology Officer Thuan Pham, who left the company last May, was $5.49 million."

The average "employee" earns $100K/yr. Why make a profit for the shareholders? These executives are stacking benjamins flying around the world having meetings and throwing parties. Who cares about profitability? They are crushing competition (mass-transit, car sales, etc). And when Uber/Gryft got ****-up, they'll move on to the next disrupter app or retire in Costa Rica. Sure, their compensation is largely stock options, but guess who is going to know the end is near before anyone else....if they sell HALF of their holdings at HALF of market value, they're still driving Bentleys and Aston Martins.

And nobody is going to puke in their back seat or slam their door, ever. Those salaries and compensations were during the worst pandemic in 100 years. Nobody cares about Uber surviving reality. The ones riding it into the ground are getting theirs. They have a plan and it is going fine.

Every driver on this forum knows (or should) what Uber and Lyfts fate will be (unless they survive to fully-automated cars). But how many have a plan in action to walk away from it?


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## Buckiemohawk (Jun 23, 2015)

We knew this years ago. They are burning through the money and even when they try to save all the lawsuits and lawyers keep getting stacked onto it.


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## ocman01 (Apr 16, 2021)

Uber financial statements are tax strategies. Its CEO still making at least $45 millions a year. Uber founders keep buying Bel Air mansions. And those institutional investors are very smart and they keep pouring money into Uber. Uber executives are outsmart most people and know how to use media for their purposes. AB5 for example, they know how to swing public votes. While most people discuss about Uber’s nonprofitable business, Uber CEO has moved to another mansion in Pacific Heights.


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## Buckiemohawk (Jun 23, 2015)

Aw Jeez said:


> One of the advantages of early Uber was that it was cheaper than a taxi. Obviously...OBVIOUSLY!...that is going to have to change. I don't know why Uber has not already raised their rates to _at least_ what legacy cabs are charging. People (customers) will NEVER go back to riding in taxicabs. Not to mention that taxi companies cannot do what we do. If Uber wants to be profitable, they should raise their rates to $2.00/mile (or maybe $2.50) everywhere. Problem solved?


People have already complained about Rideshare costing more than a taxi at some point. They will lose the bus people


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## bone-aching-work (Jul 12, 2020)

Lyft spent more on advertising than they brought in as revenue in 2016.

Uber has the same strategy of dumping hundreds of millions into advertising. It's all so stupid and wasteful. Everyone already knows about these apps.


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## Diamondraider (Mar 13, 2017)

bone-aching-work said:


> View attachment 601714
> 
> 
> Lyft spent more on advertising than they brought in as revenue in 2016.
> ...


Sales and Marketing is where they book all the ride discounts, hence the massive number.
They went out and “purchased” pax. Neither company can get away from that model.


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