Uber Rival Lyft Raises $530M, Will Beef Up IT

jfruh writes "Uber may seem like an unstoppable juggernaut, but its main carhailing service rival Lyft isn't giving up. The company just raised half a billion dollars in funding, much of it from Japanese investors. From the article: "Lyft has raised US$530 million in its latest funding round, and plans to use the money to beef up its IT staff, expand its footprint and boost existing services. Japanese e-commerce company Rakuten led the round. With the latest cash infusion, Lyft has raised a total of $862 million from investors. The ride-hailing company is now reportedly valued at $2.5 billion."

Comments

The next big bubble?

[pbjones]

I can't see that these companies can be so valuable.

Re:The next big bubble?

[mjwx]

I can't see that these companies can be so valuable.

Its because they aren't.

The numbers quoted are what some analyst thinks that someone might theoretically pay.

The reality is once the "ride sharing" scam falls into a heap, these companies will be picked up for pennies on the dollar.

Re:The next big bubble?

[Paradise Pete]

The numbers quoted are what some analyst thinks that someone might theoretically pay.

There's nothing theoretical about it. They raised a bit over $500M in return for a bit over 20% of the company. 500M / 0.2 = $2.5B.
Like all companies, they are worth what someone is willing to pay.

Re: The next big bubble?

[Anonymous Coward]

Paying for a ride != sharing.

Re:The next big bubble?

[DroolTwist]

I live in a fairly large city. Called for a cab to take me to pick up my truck as I was alone when I got my new car, so I had to go pick up my old one. First cab decided not to show, apparently. Called another; after 45 minutes the driver calls and says he won't be able to make it as his shift is ending. So I wasted 2+ hours, and still no truck.

I signed up for Uber, and had a car picking me up in less than five minutes. Got me to the dealership at almost 1/3 the cost of what the taxi would have been. I hope these services stick around, and put the overpriced and for me at least, useless cab companies out of business. I'll never call a cab again as long as Uber and Lyft are around. I also signed up as a driver, and on the weekends if I'm bored I'll give a few rides and make some extra cash.

Re:The next big bubble?

[MrVictor]

The plutocrats are so enamored with these companies because they basically eliminate the concept of traditional employment.

All these "sharing economy" app companies make you fill out a 1099-MISC if you want to work for them so you can be considered a contractor. Classifying workers as contractors is the real reason why these companies are able to drive out traditional competition. It prevents workers from forming unions and frees the companies from having to pay various taxes, workers compensation, unemployment, and health insurance. If the monied interests are able to buy enough congress critters to get this crap fully legalized, then you can bet your ass this style of labor abuse will be coming to a workplace near you.

Re:The next big bubble?

[tlhIngan]

Uber is just forcing free market economics on governments that don't want it, and surprise surprise, prices plummet while service improves greatly. Get rid of the damn medallions and be done with it.

The problem is the free market sucks for utilities.

Uber works, but it's only working on cherry-picked routes and times. Taxis are heavily regulated not just in the drivers and licensing, but also in what they can do. For example, most taxis are required to pick up drunks and take them home, and dealing with a drunk is not an easy thing (think having to clean up your car afterwards). Likewise, most taxis must pick up their fares regardless of color, creed, or other discriminatory factor. And they have to cover the whole city - they may not want to go into a low-rent district, but if they accept the call they have to.

Uber drivers, though, are free to not do any of those things. If you don't wan to pick up some guy because he's black, just drive along. (In many places, a taxi driver doing this would be forced to call another taxi AND wait for that cab to arrive - they're not allowed to drive off).

Then again, taxi companies are evil. But I suppose it's OK when you find yourself partying on a Friday night and unable to get home because there's no taxis and uber isn't willing to pick up people who might throw up in the vehicle.

Re:The next big bubble?

[gorzek]

It's interesting how, in a lot of ways, it's reversing worker specialization. In an economy where it's difficult to pick a field and stick with it because the job prospects are unreliable, enterprising workers are left with little choice but to sign up for various services that, essentially, offer them odd jobs of various kinds. Maybe you'll work as a Lyft driver for 3 hours today, do some freelance plumbing for an hour or so, write some website articles with the time between jobs, rent out part of your apartment on AirBnB so you can make the payment this month, etc. I suppose it's possible some people thrive on this sort of chaotic life, and more power to them if they do, but let's not pretend that eroding the work culture and especially the worker/employer relationship model that we developed over the 20th century is somehow a good thing for everyone. It overwhelmingly benefits employers who want to get paid and don't care one whit for what happens to the people doing the work.

Re: The next big bubble?

[HairyReptile]

Except the Lyft driver isn't going to the same place as the person paying for the ride. She's servicing the rider. And I don't have figures, but I'm confident in saying that most of these drivers are getting a majority of their income from this.

These guys are bigger than Uber/Lyft

[Roblimo]

http://en.wikipedia.org/wiki/T...

HQ in France, tentacles all over the place. Taxis, limos, buses, light rail, catamaran ferries, etc. When this bunch starts noticing Uber, all we can hope is that they give Uber a dignified burial service.

Didn't they already beef it up enough?

[bluefoxlucid]

We just barely avoided a hamburger shortage after the last time the giant cow smashing machine got all beefed up.