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the context: UBER 0.00%↑ recently doubled quarterly revenue and also indicated that high inflation was prompting more people to become drivers for the platform, and the other rideshare giant LYFT 0.00%↑, a couple days later, posted strong operating profits, better than wall st's forecasts
okay, so… both tickers are up more than 30% since ten days ago, but who cares, uber and lyft are down 26% and 56% ytd… these companies are saying that the following will help them continue to grow in revenue and operating profitability
increasing travel due to covid and economic recovery
the continued availability for more drivers to hop on and make cash to offset their inflation, which will lead to better user:driver demand/supply ratio (an important metric for a marketplace setup)
inevitably higher price point justified by higher energy prices, but still upheld by strong demand
i still wanted to know which one’s better, and enter:
lyft media: a suite of new products that allow advertisers to engage with a whole new audience in transportation – aka ads in your lyft rides now
lyft halo: it's a screen on top of a vehicle that shows you the right ads depending on location and time
lyft tablets: basically the same thing, but like an ipad attached to the back of the passenger seat. we’ve seen these before, but now they’ll just be “lyft” tablets
lyft bikes: ad panels where you pick up and park your lyft bikes
lyft skins: of course, in the app itself – not a big fan of this idea, but im not opposed to my icons looking like cardi b
what does that mean for the stock?! imo: “could get bullish, but we’ll see”. lyft is already on a thin margin – though it’s a software based platform, its take rate and profit margins resemble more of a labor-intensive revenue model where a bulk of it goes out to drivers
so, adding this ad thing can help boost lyft’s revenue, but there’s a capital intensive cost to that – it’s one thing if it’s simply coding up ads in the app, but it’s another thing where you have a hardware intensive ad and input cost to make lyft halo, lyft tablet, and lyft bikes work
i hope it doesn’t happen, but there’s always a more-than-expected situation happening with hardware damages and extra fees related to it
but, there is hope. making money with in-app ads is getting harder and harder to target right, unless you’re tiktok. facebook’s ad-based revenue is sucking hard ever since the apple policy change and tiktok’s dub in that game.
lyft media could be a new way for advertisers to target us consumers, and there is really no other middle party these advertisers would like to get through, if lyft media turns out to be effective
in any case, we’ll have to keep monitoring if this will actually give lyft an edge over uber…
have a great weekend y’all!
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