Uber, Lyft low ride-sharing fares is over, analyst says
Uber and Lyft new IPO pressure to generate profits may lead to higher fares for customers, according to Deke Digital Chairman Dave Maney.
“When the money runs out and going public is a good way to kind of – obviously they can access capital but now they’ve got to report and they’ve got to be responsible. And lots of people are looking at this and saying, ‘Yeah the party could in fact be over,’” he said during an interview on FOX Business’ “Cavuto: Cost-to-Coast.”
Lyft has raised $2.3 billion in its IPO last month. Uber plans on raising $10 billion in its offering expected this May. Uber is rumored to be seeking a $100 billion valuation.
Maney said the amount of venture capital raised has become a false read on demand.
“This is happening over and over again in the internet world of course as venture capital goes and makes something cheaper to try to hasten the demand curve,” he said.
The increase in demand for ride-sharing services has lowered the interest of purchasing your first vehicle by the younger generation.
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Maney questions whether the price of Uber and Lyft rides will be affected as more and more kids decide to not pursue their driver’s license, opting for ride-sharing services.
“What happens when that stops happening and how much does it affect the demand side? Obviously all of economics is supply and demand at some level. Nobody knows what the answer to the question is,” he said.