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Do you think Uber/Lyft IPO's will lead to higher fares?
Posted 5 years ago
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george downs (george)
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Comments
Yes. Absolutely. The fake subsidized fares are over, folks. Just like Amazon and Twitter when they went IPO, is they have to start making profits. They now have to raise fees. Simple math.
It will soon be the prices of taxis of ten+ years ago. This was Uber’s plan all along.
No. Uber has already hinted that the cuts will come from driver pay cuts, not from customer fare cuts. Prices will continue to drop, driver pay will plummet, driver turnover will accelerate, and the companies will continue to bleed money until one goes bankrupt. When only one company remains standing, prices will skyrocket. (But drivers still won't get paid a fair wage)
I really do not understand how they will get away with lowering drivers wages even further. The driver turnover will be insane and the drivers that they do get will be terrible.
Driver earnings have plummeted over the past three years, but thousands of ants continue to sign up everyday. The rideshare companies already have a ~95% annual turnover rate. They don't care if you turnover as long as they can find a replacement.
Good point about competition. However, SEC won’t let there only be one company, so the Uber Lyft duopoly will continue to exist.
But I suspect both companies will inch up their rates together under investor pressure to show the numbers. Market share matters, but now that they will be public companies, the revenue matters as well now.
It's all about profitability. It will be a combination of raising the fares and reducing expenses (e.g. driver pay).
Looking at the taxi industry of the past, we also know the historical amount people are willing to pay. So we already know the ceiling, and I am sure these companies are ready to put the fares somewhere between what it is now and what it was before.
I jut saw this article on the Motley Fool today discussing why the IPO's WON'T increase fares.
https://www.fool.com/investing/2019/04/23/the-lyft-and-uber-ipos-wont-make-your-rides-more-e.aspx