Deutsche Glasfaser Signs Deal with Nokia
German broadband provider Deutsche Glasfaser Group advanced a €7 billion plan to triple the number of homes passed by its network by signing a contract with Nokia
Lyft halted its electric bicycle program in San Francisco after at least two of the bikes’ batteries caught fire, only a couple weeks after the company put them on the streets, according to Bloomberg.
A flaming Lyft vehicle is somehow a fitting symbol for investors’ worst fears about ride-hailing. Lyft and Uber are asking investors to trust that they will someday stop figuratively setting on fire hundreds of millions of dollars or more a quarter.
A key test for their businesses comes next week in their quarterly financial reports. The stocks haven’t performed particularly well since going public, and the question for investors is whether the two companies can demonstrate that their price war is deescalating. Will burn rates fall after raising prices around the country?
More directly, does the business model work? Even if a ride costs more, will enough people be willing to summon a car, instead of just walking or taking public transportation? That’s a pathway to profitability. Can it get there? Will the billions of dollars in losses Lyft and Uber have sustained translate into profits someday? Next week, investors will look for any clues in the companies’ financial projections.
Both apps raised prices toward the end of the second quarter, and forecasts for this quarter may be telling. Analysts predict Lyft will generate $397.3 million in gross profit in the third quarter. If Lyft hits the mark, it would translate to a 51% increase from last year.
Uber complicates the analysis somewhat. Its third-quarter operating loss is estimated to be $4.96 billion. Yes, you read that right. The figure accounts for costs related to the initial public offering. Lyft posted a similar, albeit much smaller, expense in a previous quarter.