Specialist
Former Director at Lyft Inc
Agenda
- Ride-sharing industry operating environment, examining ways to expand contribution margin
- Comparative dynamics between Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT) generating user growth and ride growth
- Unit economics of a rider and potential expansion opportunities
- Outlook for 2019-20 and beyond – alternative revenue stream opportunities and regulatory outlook
Questions
1.
What are your thoughts on the ride-sharing industry? What key trends or drivers should investors pay attention to?
2.
You mentioned the total market’s growing, but market growth has been saturating. What do you think is the TAM for companies such as Uber and Lyft? Given the penetration barriers to this market, how should we reconcile the difference between the TAM and what’s currently serviceable?
3.
Of the car retail, car rental and enterprise vehicle markets, which do you think is most easily penetrated by companies such as Uber and Lyft?
4.
There are a few factors in play, from tariffs on car manufacturers to the potential for a recession to a decrease in drivers’ licences for the younger generation. Do you foresee those factors bolstering Uber and Lyft’s growth?
5.
Do you think the potential rental market penetration will be driven by the split between on-airport and off-airport rental services? Do you think Uber or Lyft is better positioned to penetrate the rental market?
6.
Industry regulations are changing, most notably the change to contractor status in California. What headwinds do you think are in place, and how can ride-sharing services mitigate them?
7.
Comparing Lyft, Uber and other players, the market seems highly competitive – what are the main differentiators? Is it customer profile, the underlying platform, or some other competitive advantage?
8.
What do you think of Via? What sort of market share could it attain? What do you think of its growth potential? How does its business model differ?
9.
Companies such as Uber have different penetration levels for metropolitan areas vs suburban and rural ones. Do you think that plays a role in the market growth saturation these companies are experiencing in the US? How under-penetrated do you expect non-metropolitan markets to remain long-term? Do you think those gaps can be bridged?
10.
What do you think of Uber and Lyft’s market positions?
11.
How important are user engagement and rider growth? How could Uber and Lyft drive those metrics up, and which is better-positioned to do so?
12.
Are there any potential benefits to increasing trips per active rider? Could it create operating leverage, or reducing customer acquisition costs?
13.
Do you think tapping into the share war is largely a factor of price? How price-sensitive would you say the industry is? How might that affect potential fare increases in future?
14.
Uber and Lyft have gradually raised fares over the past few years. Do you expect that to continue? Could regulation lead to greater increases as these companies pass on their increased costs to the consumer? Would that be a smart move?
15.
How viable do you think loyalty programmes are for companies such as Uber and Lyft? Are they a meaningful way to drive ride growth?
16.
What factors affect contribution margin for the ride-sharing industry, and how have they changed over the past few years?
17.
You mentioned as Uber and Lyft have scaled, their efficiency has increased. Are there any optimisation options you feel they haven’t yet tapped into?
18.
How might Uber and Lyft optimise insurance? What do you think of things like self-insurance options? As bookings grow, does actuarial data improve?
19.
What are your thoughts on take rates? Do you foresee Uber or Lyft being able to increase them, or is there a ceiling they can’t go beyond without upsetting drivers?
20.
Do you think operating leverage can be increased as these companies scale up, in terms of their sales and marketing costs?
21.
Uber is investing in R&D around freight and autonomous vehicles. Do you see Lyft investing in food delivery? What is the potential of vehicles such as bikes and scoots? What do you see as the most positive ancillary business revenue streams?
22.
What do you think is a likely timeline for profitability for these ride-sharing companies? Should it be a focus now? I’ve heard estimates it might be achievable by 2023.
23.
What sort of EBITDA margin do you think this industry can achieve long-term, once cash burn slows and the market’s saturated?
24.
Do you think it’s important to strive for near-term market share or long-term growth?
25.
What do you think is driving partnerships and M&A in the industry?
26.
Several enterprise businesses such as food delivery companies are partnering successfully with ride- sharing companies. What further developments do you foresee in that area? Could these companies work with governments?
27.
How do you expect the ride-sharing industry to change over the next 3-5 years? Who are the potential winners and losers? Are there any potential wildcards to keep an eye on?
28.
What best- and worst-case scenarios do you predict for Lyft over the next 12-24 months, and do they differ from your best- and worst-case scenarios for Uber?
29.
You mentioned Via is looking into public transport. What do you think of Uber’s expansion into public transport in Mexico City?
30.
Are there any industry assumptions you think we should be challenging, or anything investors frequently misunderstand about ride sharing or mobility?
31.
Do you have any closing remarks about anything we haven’t covered?
