TexAgs investing gurus, I want y'alls take on this.

Lyft just got destroyed & put out weak guidance & they continue to lose market share to Uber.

Uber actually turned a profit in Q4 2022, but still lost $9b in 2022. They have roughly 75% of the market share if my research is correct.

My big question is.... Do these two both get absolutely crushed in a recession? When people can't afford anything, they do not need an Uber/ Lyft ride to a bar, restaurant, sports event, airport, etc because they are not going to any of these things. When people can't afford groceries, they are not going to use Uber eats and pay 20-100% in fees to have a cheeseburger that costs $8 dollars down the street to be delivered for $20 and be cold. Additionally, I keep hearing of more and more restaurants refusing to accept Ubereats, Grubhub, etc. because they essentially have zero margin & any delivery issue is taken out on the restaurant.

TexAgs, tell me why I shouldnt buy a ton of Puts on Uber....

Uber and Lyft's long play has always been to take losses now so that way they replace taxi companies and rake in the windfalls later. I don't know if Taxi companies took losses in past downturns. I would think a recession would hurt them if people have less disposable income. On the flip side, if people lose cars due to defaulting on payments then they will need to get around somehow and Uber and Lyft are there for that.

I might buy some puts, but I'm not sure I would buy a ton, unless you have a ton to burn and don't mind taking risk. I do they both are overvalued.

cajunaggie08 said:

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Uber and Lyft's long play has always been to take losses now so that way they replace taxi companies and rake in the windfalls later. I don't know if Taxi companies took losses in past downturns. I would think a recession would hurt them if people have less disposable income. On the flip side, if people lose cars due to defaulting on payments then they will need to get around somehow and Uber and Lyft are there for that.

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this.

and the LONG term play at that is them banking on the success of self-driving vehicles and the even longer term play is urban air mobility.

Serious question ... has either one ever made a profit? If so, when?

How is their bottom line affected by more people trying to drive (as supplementary income due to tough economy) and less people trying to use the service?

On a related note the premiums on DASH look juicy

I invested a little in Lyft, just hope for the best

Haven't followed those companies closely from an investment perspective.

I did drive Uber in grad school to make some money.

Uber did talk about that during the pandemic Uber drivers were making more money per hour ferrying Uber Eats compared to just driving.

Uber's probably the best positioned to offer consumer facing ferrying as a service, not just rideshares.

JSKolache said:

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Serious question ... has either one ever made a profit? If so, when?

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No. Uber is speculated to make money in '24.

Of course, everyone compares these two services. Uber has far more ride options than Lyft, giving drivers more earning potential. Riders can choose eco-friendly or luxury options on both apps, but Uber has a variety. They also offer more services. However, Lyft provides rental cars on its app and its customer service works better (it's only my opinion as I addressed it several times through this website). But Uber can be less expensive than Lyft for the average journey.

no matter how bad it gets, a person always can earn money if they have a car

if it gets to the point when they can't, we're all fcked

ea1060 said:

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As a former Uber/Uber Eats part-time driver, you would be shocked at how many low-income folks in Houston use uber to go back and forth to work (Mcdonalds), and to run errands. I once delivered an order of 2 large cherry limeades to a low income person in a very rough neighborhood, it cost her $20.

Another example, I used to wait tables in 2008-2009 during the height of the recession. The restaurant was packed every night, and we had a lot of tables that looked like they could barely afford rent. And it wasnt just my restaurant, but most restaurants in town were packed.

People are bad with money, I dont think a recession is going to change their usage of Uber or going out to eat.

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To add to this, there are a lot of people who use Uber / Lyft for much more than going out at night / on the weekends or when they are traveling and don't have a car. There are a lot of people who don't have reliable transportation that use these services to get back and forth to work, the grocery store, get their kids to school, etc. For many it is an alternative to mass public transit or sometimes the only option where mass transit is not present. I've done some driving for both in the past, and the majority of the rides were most often this.