Lyft is five times cheaper to acquire than Uber. It has 35% of ridesharing marketshare in America and is rapidly growing in Canada—two of Amazon’s biggest market.
Currently, no major Western ridesharing platform is profitable. That’s because it takes a ton of costly promotions and subsidies on both the rider and driver sides to grow a ridesharing platform.
Amazon, however, could substantially reduce the high cost of new rider acquisition by just offering their over 100 million Prime members a discount for using Lyft over Uber. This would shift marketshare overnight.
Then, on the driver side, Lyft drivers could be doing last mile order fulfillment for Prime Now and Amazon Restaurant when ride demand is low—effectively increasing driver wages through removing time spent waiting for a new passenger while also lowering Amazon’s fulfillment costs.
The operational efficiencies that come from owning both commerce and ridesharing would allow Amazon to become the most valuable company in the world.
Uber and Amazon are already competing on a ton of fronts. AmazonFresh and UberEats, Uber freight and amazon prime delivery. My money is on Bezos to win though, they can shoulder the massive costs with AWS
Disclaimer: Consult your financial professional before making any investment decision.
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