8 ms·

Not just that, but RideAustin is a non-profit and mimics virtually every feature of Uber. I seriously wonder if non-profit versions of the business will expand

by bosdev 10y ago

Not just that, but RideAustin is a non-profit and mimics virtually every feature of Uber. I seriously wonder if non-profit versions of the business will expand into other cities and challenge Uber and Lyfts margins.

notyourwork 10y ago
Is it possible that this becomes a city supported public transit system?
- deleted 10y ago
  [deleted]
- vkou 10y ago
  Subsidizing cab rides is one of the least cost-effective ways to get people from point A to point B.
  - deleted 10y ago
    [deleted]
mikefivedeuce 10y ago
I was in Austin two weeks ago and was worried about the lack of Uber/Lyft. I had great experiences using RideAustin. A driver even mentioned that they pay him 2x fares to drive out to areas like the F1 track because it's outside of the city.
chimeracoder 10y ago
> I seriously wonder if non-profit versions of the business will expand into other cities and challenge Uber and Lyfts margins. Why would non-profits inherently be able to beat Lyft or Uber's margins? Non-profits, despite the name, are not prohibited from making a profit. Conversely, the "profit" referred to in "for-profit companies" doesn't come out of their margins. And even if you're talking about their bottom line rather than their margins, it's not like venture-backed companies are required to run at an operating profit anyway. To my knowledge, Uber has never actually issued GAAP accounting demonstrating that they're turning a profit[0]. Which makes sense - the whole point of raising outside capital is to spend money faster than you'd otherwise have access to it. Both non-profits and for-profit companies do this. Non-profits are functionally equivalent to for-profit companies. The only distinction in this case is that a non-profit would have a harder time raising money, because they can't provide equity in exchange for the outside funding they obtain, whereas a for-profit company can. [0] They've made plenty of non-GAAP claims, but that doesn't mean anything.
- legulere 10y ago
  Where does the profit come from if not the margins? The advantage of non-profits is that they don't have to make a profit in the long run and might have to pay less taxes. Not having to make profits might be true in the beginning for startups, but at some points investors want to see returns. If I remember correctly, Uber is already making profits in some markets and using it to subsidize expansion in other markets.
  - chimeracoder 10y ago
    > Where does the profit come from if not the margins? At a high level: "Margins" typically refers to what is left over after you take all of the revenue from selling a product and subtract all of the per-unit costs (ie, ignoring fixed costs). "Profit" is then whatever is left over after you take all of your revenue, subtract your per-unit costs, and then subtract all of your overhead (salaries, office space, etc.) So, whether you are a non-profit or a for-profit, the accounting there is the same. The difference is that for-profit companies can choose to use that profit to issue dividends to people who hold shares. If they don't, that money stays within the company (ie, it's "reinvested"). Non-profits don't have a choice: they cannot distribute dividends. Many notable for-profit companies don't distribute dividends. From an accounting perspective, if they also reinvest all of their money back into the company before year's end, they are essentially equivalent to a non-profit company. There are some caveats to this, but that's the general idea. > The advantage of non-profits is that they don't have to make a profit in the long run No company "has" to make a profit in the long run, as long as they break even. But again, whether or not they are able to break even is determined the same way, whether they're a non-profit or a for-profit company. > and might have to pay less taxes. This is jurisdiction-dependent and is a relatively minor effect, because taxation on profits just encourages the for-profit company to reinvest its capital anyway. Most of the other taxes that a company pays are paid by both for-profit and non-profit companies. In any case, the difficulty that non-profits would have in raising comparable amounts of money to venture-backed competitors is much larger, by several orders of magnitude.
    - kbenson 10y ago
deleted 10y ago
[deleted]
btian 10y ago
Calling Uber and Lyft non-profit would be very generous to them. Did either of them ever had a profitable quarter?

by bosdev 10y ago

notyourwork 10y ago

Is it possible that this becomes a city supported public transit system?

deleted 10y ago
[deleted]
vkou 10y ago
Subsidizing cab rides is one of the least cost-effective ways to get people from point A to point B.
- deleted 10y ago
  [deleted]

mikefivedeuce 10y ago

I was in Austin two weeks ago and was worried about the lack of Uber/Lyft. I had great experiences using RideAustin. A driver even mentioned that they pay him 2x fares to drive out to areas like the F1 track because it's outside of the city.

chimeracoder 10y ago

> I seriously wonder if non-profit versions of the business will expand into other cities and challenge Uber and Lyfts margins. Why would non-profits inherently be able to beat Lyft or Uber's margins? Non-profits, despite the name, are not prohibited from making a profit. Conversely, the "profit" referred to in "for-profit companies" doesn't come out of their margins. And even if you're talking about their bottom line rather than their margins, it's not like venture-backed companies are required to run at an operating profit anyway. To my knowledge, Uber has never actually issued GAAP accounting demonstrating that they're turning a profit[0]. Which makes sense - the whole point of raising outside capital is to spend money faster than you'd otherwise have access to it. Both non-profits and for-profit companies do this. Non-profits are functionally equivalent to for-profit companies. The only distinction in this case is that a non-profit would have a harder time raising money, because they can't provide equity in exchange for the outside funding they obtain, whereas a for-profit company can. [0] They've made plenty of non-GAAP claims, but that doesn't mean anything.

legulere 10y ago
Where does the profit come from if not the margins? The advantage of non-profits is that they don't have to make a profit in the long run and might have to pay less taxes. Not having to make profits might be true in the beginning for startups, but at some points investors want to see returns. If I remember correctly, Uber is already making profits in some markets and using it to subsidize expansion in other markets.
- chimeracoder 10y ago
  > Where does the profit come from if not the margins? At a high level: "Margins" typically refers to what is left over after you take all of the revenue from selling a product and subtract all of the per-unit costs (ie, ignoring fixed costs). "Profit" is then whatever is left over after you take all of your revenue, subtract your per-unit costs, and then subtract all of your overhead (salaries, office space, etc.) So, whether you are a non-profit or a for-profit, the accounting there is the same. The difference is that for-profit companies can choose to use that profit to issue dividends to people who hold shares. If they don't, that money stays within the company (ie, it's "reinvested"). Non-profits don't have a choice: they cannot distribute dividends. Many notable for-profit companies don't distribute dividends. From an accounting perspective, if they also reinvest all of their money back into the company before year's end, they are essentially equivalent to a non-profit company. There are some caveats to this, but that's the general idea. > The advantage of non-profits is that they don't have to make a profit in the long run No company "has" to make a profit in the long run, as long as they break even. But again, whether or not they are able to break even is determined the same way, whether they're a non-profit or a for-profit company. > and might have to pay less taxes. This is jurisdiction-dependent and is a relatively minor effect, because taxation on profits just encourages the for-profit company to reinvest its capital anyway. Most of the other taxes that a company pays are paid by both for-profit and non-profit companies. In any case, the difficulty that non-profits would have in raising comparable amounts of money to venture-backed competitors is much larger, by several orders of magnitude.
  - kbenson 10y ago

deleted 10y ago

[deleted]

btian 10y ago

Calling Uber and Lyft non-profit would be very generous to them. Did either of them ever had a profitable quarter?