Pricing them at 12X net revenue out the gate is pretty aggressive to say the least. Especially when their margins were -60% back in 2016 and in late 2018, and if anything they've gotten worse with the recent price drops. [1, 2] It's not fair to compare them to the negative margins enjoyed by other tech companies as most software companies are zero-marginal-cost businesses. It's far from clear to me that people would pay the double price per ride it would take to break even.
A few years ago, if I'm not mistaken, they even switched to counting the entire value of an Uber Pool/Express Pool ride as net revenue (something they don't do with their core product offerings) muddying the water. Does anyone know if that's changed? [3]
$120B would price them at the same net revenue multiple as Square ($2.21B/yr @ 25B market cap) while Square has much, much better margins (0% vs -60%) - and is itself widely regarded as not being a cheap buy.
>It's why places like Planet Fitness are able to offer $10/month unlimited memberships.
That model is far different though
For each Planet Fitness, much of the cost is upfront. That is, they have to buy the property, renovate (or build), and then buy all the machines. Yes there are increased maintenance costs as more people join the gym, but cost per user should decrease with each additional membership.
For MoviePass, for each user they have to pay for the price of each movie ticket they go to. Thus their costs increase proportionally to the number of subscribers. Unless each additional user they sign up goes to the movies less than the average MoviePass user, Cost per user doesn't decrease.
> For each Planet Fitness, much of the cost is upfront. That is, they have to buy the property, renovate (or build), and then buy all the machines.
As said before, this is not remotely accurate. Firstly, nearly all of these franchises rent their building space. Secondly, as with any B&M business, fully loaded employee costs comprise a majority of operating expenses. Thirdly, gym equipment maintenance is a non-trivial ongoing factor. Certainly the initial equipment purchase is a bubble, but the idea that PF is only fiscally viable due to equipment longevity is specious at best.
Note fitness equipment estimates range from $35,930 to $944,800; re-equip costs are estimated at $359,900 to $944,800. (that low estimate on re-equip may be a typo, it is likely re-equip costs are estimated in the same range)
Yes Lyft has gained some marketshare in the past 6 months. But Uber still dominates the US rideshare market (Uber by public accounts still has greater than 70% Market Share). Uber dominates in several other regions (Western Europe, Latin America) and is competing in several other huge markets (India and SouthEast Asia). Uber also has significant stakes in the dominant ride hailing companies in China and Russia.
This is not to diminish what Lyft has done. They're successful company. But they are in no way seeing more long term success compared to Uber as of today
Any pointer to "Uber dominating in Western Europe?" Only in a two horses race with Lyft, but as you know there are many other racers, including traditional taxies which are well organized in Western Europe, not only a vested interest.
While I don't doubt the rest of the article, I will say as a former Uber intern (this past summer) the vast majority of us were not overworked. I (and most of my fellow Uber interns) worked between 40-50 hours a week, and we were paid hourly (with overtime being paid at 1.5x base pay).
One issue with HN that I constantly run into is that I might miss an interesting article because each submission (30 on each page) look so similar. Your approach (where at most 4 articles appear within my browser at once) allows me to take more time to consider whether I should read each article.
Entry level offers made to students are really an entirely different ballgame. They're usually made months in advance of the expected start date, often as far out as 8-10 months.
That number is quarterly revenue (and as you say does not include the share the driver takes)