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Comment by mrnobody_67 | Hacker News Reader

Why in the world would someone doing self driving cars want to acquire them?

Self driving car companies be able to offer competing service for 70% cheaper per mile. Riders will migrate for the drastically better price.

There's no long-term defensible asset in the Lyft driver network, and switching costs for riders are minimal.

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A customer base has value. Consider that Google bought YouTube for $1.65bn. There is little doubt that Google could build the necessary video streaming tech, but they still bought YouTube, and it was their best acquisition to-date.

Only after Google Video has been around and failed to reach the critical mass that Google hoped for.

Customer acquisition in ride sharing space is a fairly well-trodden path - start with a high promotional credit for signups/referrals, gradually lower those as desired metrics are met.

I guess in that sense an acquisition makes sense when the target is priced below the cost of customer acquisition, but I doubt that is the valuation Lyft/Uber are hoping for.

Lyft, Uber, and Taxis aren't as sticky as YouTube though, the majority of both drivers and riders readily use all 3 varying only on convenience.

Google even promotes this by having the ride hailing part of maps.

The scooter business amplifies this even further, very few users or charges have a strong preference to a single brand.

While YouTube had advantage in content, Vimeo had targeted commercial content, but very low stickiness.

They bought youtube because their video service was a big flop.

Google might have smart engineers, but their user experience leaves a ton to be desired IMO.

So less than a tenth of what Lyft would probably want them to pay and only a year and a half of what Lyft loses (only half a year of Uber losses). Google isn't going to buy Lyft's customers for $20 billion plus the $1 billion a year that those customers are costing Lyft to keep.

They already had built it. Google Videos (was that it's name?) was a thing and I remember it being turned down not too far from the YT acquisition.

I thought YouTube is still not profitable? Like it provides a lot of value for their larger, long scale strategy but is bleeding money short term?

I'm no expert, I just see this narrative parroted all the time.

As far as I can tell, Google hasn't disclosed whether YouTube is profitable. What we know is that most analysts predict YouTube makes ~$10BN in revenue, is growing 30%-40% per year, and is valued at somewhere between $75BN-$150BN (much more than Google paid for it.) But those are just analyst predictions, it's very hard to tell when Google's not saying anything.

Lyft/Uber have 3 assets that I can see:

1. Driver network. This will go away with self-driving cars.

2. Rider network. This might take some time for Google etc. to acquire, but probably not nearly as long since they'll have a one-sided market (while Lyft/Uber had to deal with a two-sided one.) This might sell for a pittance relative to their current market cap.

3. Routing technology. Lyft & Uber have gotten much, much better at routing than they were just a few years ago – especially when it comes to multiperson rides. I could see this being pretty valuable, there's no need for Waymo to spend years duplicating the same thing when they could just buy it.

> "Lyft & Uber have gotten much, much better at routing..."

i had to chuckle at that. i've had multiple experiences where my driver had to loop hack toward my origin to pick up someone else, literally passing my pickup point in some cases. other times drivers were expected to swerve off of a freeway with seconds' notice to pick someone else up.

i think they have some ways to go in that regard. sure, they have a lead on an unprepared/undercapitalized competitor, but i'm not sure they'd have a lead on google (who also owns waze).

Lyft's and most of Uber's maps for routing are driven by the Google Maps API.

Google's track record for consumer-facing services is abysmal. Acquiring Lyft is a deft business move for Google's Waymo unit. At the very least, a partnership agreement is in order.

Google already has great routing technology, much better than Uber's according to their own drivers.

And don't forget Google maps. They can just add a button on ride sharing tab in Google maps in cities where Waymo is launched (whenever it launches)

So often I sit down in an uber and the driver instantly switches to Waze.

Yesterday, I booked a cab to go home, and rather than taking a right turn from the main highway to my home which was around 2.5km away, and there was no traffic (it was 1 AM), Google Maps recommended a route which essentially took an inward spiral route to my home (crossing one other highway, two main roads). And then charged me double the amount. I disputed the charge, and they instantaneously refunded the extra charge (wtf? Why charge in the first place?)

As I go through your list, only routing seems to be in favor of Lyft? If that is the case then the question is whether the routing technology alone will be worth billions of dollars ie Lyft's eventual valuation.

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