Lyft attempted sale to Apple, Didi Chuxing, Uber, GM, others
Lyft, the second-largest ride-hailing firm in the U.S., in recent months made overtures to sell itself to tech companies, automotive manufacturers and competitors, but failed to hook a buyer.
Citing sources familiar with the situation, The New York Times reports Lyft held talks with or approached Apple, Amazon, General Motors, Google, Uber and Didi Chuxing over a potential sale. The ride-hailing service was unable to find a suitable buyer.
GM, which recently boosted Lyft's valuation to $5.5 billion with a $500 million infusion, showed the most interest in an acquisition, but ultimately passed without tendering a formal written offer. A separate report from The Information last week said Lyft was propositioned by GM, but rejected the takeover bid in favor of a new funding round.
Further confusing the situation is Uber China's sale to Apple partner Didi Chuxing. Lyft previously struck an accord with Didi, among other services, to stave off an aggressive international push from Uber. It is unclear how Didi's acquisition of Uber China's assets will affect the deal with Lyft.
The Times says that while Lyft is not yet profitable, the company has some $1.4 billion in cash to keep it afloat.
Citing sources familiar with the situation, The New York Times reports Lyft held talks with or approached Apple, Amazon, General Motors, Google, Uber and Didi Chuxing over a potential sale. The ride-hailing service was unable to find a suitable buyer.
GM, which recently boosted Lyft's valuation to $5.5 billion with a $500 million infusion, showed the most interest in an acquisition, but ultimately passed without tendering a formal written offer. A separate report from The Information last week said Lyft was propositioned by GM, but rejected the takeover bid in favor of a new funding round.
Further confusing the situation is Uber China's sale to Apple partner Didi Chuxing. Lyft previously struck an accord with Didi, among other services, to stave off an aggressive international push from Uber. It is unclear how Didi's acquisition of Uber China's assets will affect the deal with Lyft.
The Times says that while Lyft is not yet profitable, the company has some $1.4 billion in cash to keep it afloat.
Comments
What is the valuation of your company?
5.5 Billion.
How much profit did you make?
Nothing.
Errrrr.....
Oddly, in some cases Wall Street really likes that:
Salesforce.com
Market cap: $52B
Earnings: negative (losing money)
I'm not slamming Salesforce, just using them as an example of odd behavior on Wall Street (IMHO). In certain growth industries, Wall Street seems to focus more on revenue than on profit.
...and I think it will become more and more difficult to make money let alone profits using this scheme.
Security is non-existent in the states when using these rides for the driver nor the passenger.
They also have serious lawsuits pilling up against them in various countries.
The way they expect to make money and profits is by bi-passing standard taxi laws and security protocols.
In the long term this will not be good for the drivers nor the passengers.
Can't compare Uber & Lift with Google or FaceBook or Microsoft because the way they make money is completely different.
That's why the later are very profitable.
Granted execution is important in any business but the business model and go to market strategy are even more important.
When you look at it this way you see that Uber and Lyft have very little software and not very much to stand on.
An example:
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Uber is illegally doing business New York City by bi-passing the required medallion license, fees and regulations that the Yellow Taxi cabs have to endure for the right to do business in New York City (Manhattan). Other cabs are not allowed to pick-up passengers in Manhattan but crooked mayor Bloomberg allowed Uber to do this so the Yellow Cab owners and their banks are suing. A New York City medallion license use to sell for a million dollars, they are now worth about half as much hence leaving the owners and their lenders holding the bag but hoping for the day of reckoning. Losing this lawsuit and paying the penalties alone could wipeout Uber. Not to mention that there are similar issue in other countries around the world.
Lets use a very simplistic example, you need an army, a moat and a wall to protect your castle. With these companies, you are defending with just an army because the moat and the wall can be bypassed with almost no effort.
On the topic of Facebook, in the early days it was as vulnerable as everyone of those before it but it has now grown to be something more than software and a business plan and it is constantly evolving.
As for the likes of Uber/Lyft, Uber got beaten in China and had to leave with some face saving deal, they are losing money in other markets where there are local competition. Local competition that only showed up because of Uber.
I mentioned Friendster and MySpace and local competition for Uber not because the market works. It is because what Friendster/MySpace and Lyft/Uber does can be so easily replicated by being "just software and a business plan" and when done by others either more familiar with local markets or with better execution they fail to compete even though they are earlier to market.
This is my personal opinion and it's pointless to further the discussion as you seem intent to disagree for the sake of disagreeing to the point that you can't tell separate posters apart.
Welcome to the 4th Industrial Revolution I call "yeti". Software will disrupt most traditional industries in the near future. Indeed, Uber is seemingly just a software tool and as such they don't own any cars, "yet" they are now the biggest taxi company in the world. Similarly, Airbnb is now the biggest hotel company in the world, "yet" they don't own any properties. ;-)
I personally starting to think this business model may not work as well as they all think.
I just read NYC remove the requirement for license cab drive to speak English or have a working understanding of English, Last year they dropped the requirement to be able to navigate in the city. They city said that those requirement are discriminatory, and Uber does not require it so it puts License Cab driver at a disadvantage. Also with GPS people do not need to know how to navigate. I personally do not use a cab, but I have used them outside the US in places where they do not speak English and trying to tell them how to get you where you need to be is not easy. I learned to grab the hotel address business card and Get someone to send me information in the local language to hand to the cab driver. Even then I was in China going to a supplier and the supplier hired a driver and gave him direction and he still could not find his way and was stopping along the way to ask people. You do not want someone driving you around who you can not communicate with.
All these changes because the Cab Companies need to compete with Uber, I feel bad for people in NYC.