Well, 2017 was a wild ride in the rideshare sector. Uber stumbled almost everywhere, while Lyft made significant gains. Here’s a few predictions for the rideshare sector in 2018.
Criminal Charges Will Likely Be Filed Against A Current Or Former Uber Employee
Uber is currently the subject of five separate criminal probes at the federal level. While some of these investigations will likely result in nothing more than a fine, there’s five of them! So, the odds are pretty good that at least one of them will result in criminal charges being filed against someone who used to work for Uber.
Lyft cracks 30% market share in the U.S.
Lyft currently has a little under a quarter of the U.S. market. Given their growth rate versus Uber, and the fact that Uber‘s reputation is likely to continue to suffer through 2018, Lyft is pretty likely to hit the 30 percent barrier. If Lyft is really aggressive when it comes to expanding their user base, 35 percent or higher could be in reach.
Uber Loses Over $2.0 Billion
Uber will lose less money in 2018 then in 2017. The main reason is that if they lose the same amount of money (or more) as they did in 2017 or 2016, when losses topped $800 million, there’s a real risk they will go out of business or be acquired. Now, the current leadership of Uber is aware of this issue. However, it’s very difficult for a large company like Uber to go from losing $3 billion to profitability in one year. Realistically, the most they can probably trim their losses by in 2018 is around $1.2 billion. And to do that would probably require steps that Uber is not willing to take, like firing several thousand employees. Therefore, Uber is likely to lose another $2 billion next year.
Lyft Loses Over $300 Million
Lyft is on track to lose somewhere between $500 million and $600 million in 2017, a significant improvement on 2016. While they should be able to trim their losses further in 2018, expanding their user base and gaining more market share is going to keep them from profitability next year.
Neither Lyft or Uber Go Public
Uber will likely not be in a position to go public at any point in 2018. Their financials will not be strong enough, and they will continue to have at least some massive legal issues hanging over the company for the whole year.
Lyft, on the other hand, could go public in 2018, but will most likely wait until 2019. The reason is simple. In 2019, Lyft has a pretty good shot at reaching profitability. If they can do that, they’ll able to raise more money, on better terms, in an IPO.
Uber Lays Off At Least 1000 Employees
In order to stop losing so much money, Uber is going to have to lay off some employees. And some of those employees are going to be the more expensive ones making six-figure salaries. Looking at the fundamentals that have been released or leaked over the past year, there’s really no way for Uber to go forward at its current burn rate. The company currently loses about a quarter billion dollars a month, which is astonishing. If they keep doing that, they’ll probably be running low on cash towards the end of 2019. So, look for some Uber employees to be getting pink slips next year.
Lyft and Uber Both Raise Pay In Certain Markets, And On Certain Services
Rates on both Uber and Lyft mostly stabilized in 2017. In the last few months of the year, both companies raised some rates on certain platforms in certain markets, while also cutting other rates. Unfortunately, most of the rate hikes will probably be on the premium parts of both platforms, like Uber select and Lyft Premier. So, if you have a nice car, it’s probably a good time to sign up to drive for Lyft or Uber.
Lyft launches an UberEats type service;
The one bright spot for Uber in 2017 was their Uber Eats service, which achieved profitability in about a third of the markets it’s operating in. Lyft needs to increase the number of part-time Lyft drivers and needs to keep existing drivers online longer. The food delivery service is a perfect way to accomplish both goals. It gives drivers way to earn more money when it’s slow out. While this would be an expensive endeavor for Lyft, it’s necessary if they want to remain competitive with Uber long-term. Also, it’s an additonal revenue stream, which they could use.
If you’ve got some predictions of your own, or think these predictions are crazy, let us know when the comments.
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