[mikeryan]

Its interesting seeing this current trend of "Unicorns" (WeWork, Uber & Lyft) relentlessly pushed to quickly to grow and expand that they're getting pushed far past the bounds of a sustainable business.

Is this VC/Industry pressure that needs to be dialed back?

[rtempaccount1]

I'd say it's partly VCs but also the fact that, once they stop growing quickly, they need to start turning a profit, to justify a big valuation.

As long as they're still growing they can blame any losses on the costs of expansion. The hard part is becoming profitable once that growth period is over.

My feeling is that Uber, Lyft and WeWork will really struggle to turn big profits, there's just not enough differentiator to allow them to charge higher prices than other market participants.

with Uber/Lyft the endgame appears to have been self-driving vehicles, but it seems those are a long way off mass market adoption, so it's not likely they can sustain themselves while waiting for that to occur.

I'm not sure what WeWork thought the long term deal was...

[jfim]

Keep in mind that's the model that worked when unit economics made it possible to capture outsized profits.

Think of Facebook, their incremental infrastructure costs for delivering messaging and feed services to an additional user are negligible (significantly less than a dollar per quarter) compared to the revenue they're making per user (dozens of dollars per quarter). In that cost model, grow at all costs then monetize makes sense.

For Uber, Lyft, and WeWork, there are no economies of scale (ignoring the fixed R&D costs). Twice the amount of rides given will have twice the driver costs, and the drivers will always petition to get a bigger slice of the pie.

[benologist]

Yes. You can tell because in addition to their lines of business they have these massive cash sinks tinkering away on random stuff. Why does Uber need to hire people to write a tool to eliminate null pointer exceptions in Java? There really might be a sustainable business - but it won't be doing most of this stuff:

https://uber.github.io

https://lyft.github.io

[mandevil]

I have been in companies that open-sourced small bits like this. Basically, it worked like this: someone came up with a cool tool that helped them (in this particular case, likely finding NPE's in their Android app). Then others heard about it and started to use it. Once the use spread a bit, the developer who built it tried to clean up the code and document it better and make it easy for others within the company to use, and then someone said "let's open source this" because that way it looks great for the company ('see, we're giving back, we're cool- more developers will want to work here') and the original engineer (who now has a open source project on his resume, also probably gets to go to a conference and give a talk on it, which the company will gladly pay for because it makes them look cooler and attract more developers). The LoE once you've built the tool is pretty small, and 'finding things that were causing crashes in our Android app' clearly has a direct bottom line impact on Uber.

But it isn't the crown jewels of the company: their data, their scheduling algorithms, anything like that, its little side projects. (Some companies do open-source the crown jewels and make their money on support contracts, but that's a totally different business model; outside of Red Hat I'm not sure how sustainable such businesses are.)

[lallysingh]

Why? They got their exit $$, didn't they? I think we're already seeing the inevitable effect: nobody's buying the bullshit anymore and WeWork's IPO is paying the price.

I expect the stock prices of the other fauxnicorns to collapse now that investors see that they got taken for a ride.

[sremani]

Uber & Lyft are public companies now, and by definition are now more accountable to public markets than whims of VCs.

Is the board composition the reason you think VCs still have a sway on them ?