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We took a deep dive into unit economics at @lyft. Main take-aways: constructive unit economics stemming from positive CLV's, low and stable CAC, but with risk in that the value is coming from a fairly small proportion of each cohort:
bit.ly/2UqpdVk
bit.ly/2UqpdVk
The key take-home metrics:
(1) they spend $32 to acquire customers then make ~$51 after acquisition, implying a CLV of $19.
(2) CAC has been hovering around $32 the past couple of years.
(3) Lyft may be losing money on 80% of its customers, but making it up on the others.
(1) they spend $32 to acquire customers then make ~$51 after acquisition, implying a CLV of $19.
(2) CAC has been hovering around $32 the past couple of years.
(3) Lyft may be losing money on 80% of its customers, but making it up on the others.
(4) A lot of uncertainty in CAC due to non-disclosure -- incentives are split out across two line items with no split of new versus existing customers, but sensitivity analysis suggests it is almost surely $21 - $54.
(5) Seems like the @Uber mishaps in 2017 really helped Lyft.
(5) Seems like the @Uber mishaps in 2017 really helped Lyft.
(6) A decent proportion of customers are inferred to remain with the firm for a very long time (like, 10 years or more).
We don't go all the way to valuation -- need to bake in future acquisitions and fixed costs, which are high -- but implies path to profitability is possible..
We don't go all the way to valuation -- need to bake in future acquisitions and fixed costs, which are high -- but implies path to profitability is possible..
