Uber And Lyft: The Limits Of The Amazon Model

Aug. 15, 2021 5:17 PM ETLYFT, UBER10 Comments


  • The Amazon business model of undercharging and overproducing to gain scale at the expense of profits is beginning to show its limits.
  • Uber and Lyft are in an alterable cycle of driver, customer and platform costs that eat into almost all their bookings.
  • Not every business is ripe for disruption by scale and technology.

Woman in Rear of Car Driving Through New York City
halbergman/E+ via Getty Images

The Amazon Model

Data by YCharts

That chart is, essentially, the Amazon (AMZN) model:

  • Underprice goods or services to gain scale.
  • Value scale over profits.
  • Eventually the profits will come.

As you see with

Data by YCharts

Data by YCharts

Data by YCharts

This article was written by

Deep coverage of complex trends shaping the future with targeted portfolios

Confirmation Bias Is Your Enemy.

Tech and macro. Deep analysis of long term sectoral trends, and the opportunities arising from them. I promise not to bore you. Author of Long View Capital, a Marketplace service for long-term investors. Risk Factors: I am also wrong sometimes.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (10)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.