Intelligence

Losing Faith in Lyft

Reporter: Vested Staff

Losing Faith in Lyft: The ride-sharing start-up is one of the first unicorns in the US to file for its IPO, beating out Uber, AirBnB, Slack and others. But according to the Guardian, Lyft is burning through cash at rates that are starting to make investors wary. Last year, it lost $911M through ramped up marketing efforts in order to compete with competitors and cut prices. Lyft isn’t alone — Uber lost $1.8B last year, while WeWork, the co-op office space, lost $1.9B. The losses only further validate the concerns of investors who believe we’re at the very top of a bull market, meaning the constant flow of money could come to a halt as we enter into a bear economy.

Big Ideas Don’t Mean Big Money: Lyft, Uber and other unicorns losing money may seem surprising at first. They’re viewed as the ultimate tech disruptors, making a splash in Silicon Valley and being hailed by Millennials. But upon closer examination, their lack of profitability makes sense. Often times the products or services are cheap, and in some instances free for consumers while still remaining fast, efficient and sexy. So how do they make money? The Wall Street Journal explores different business models and how these companies may be raking in cash, but still losing big money.

What Venmo-Stalking Says About Money Attitudes: Venmo, the money-transfer platform owned by PayPal, is typically filled with friends transferring nominal amounts of cash for beer, pizza or ConEd bills. But The Cut digs deeper on why the payment technology seems to be everyone’s new favorite form of wealth voyeurism.

From The Cut: “[On Venmo], you can show off how much money you have in an indirect way,” Harris Stratyner, a psychologist who specializes in addictive and unhealthy behaviors, told the publication. When you display how often you spend, on what, and with whom, you may inspire “venvy”, a portmanteau of “Venmo” and “envy” coined years ago that has only become more relevant as the app has grown. The difference between “venvy” and, say, the Instagram equivalent, is that braggarts can chalk up their flexing to the app’s genuinely useful function (“I wasn’t trying to show off, I just needed to pay so-and-so back for our ski trip”).

Despite Bitcoin’s Rally, Flaws Persist: Once upon a time, a single Bitcoin was valued at just under $20,000. Today, it’s worth a little over $4,100. Despite the massive drop, the $4,100 figure represents a 10.91 percent increase over the last quarter–the largest improvement since Q4 of 2017. So is Bitcoin here to stay? Not exactly, according to The Economist. The publication points to three related problems that will prevent the cryptocurrency’s bounce-back: “the extent of genuine activity is hugely exaggerated; the technology does not scale well; fraud may be endemic.”

The Psychology of Money: If you’ve ever wondered what motivates consumers to save, spend or splurge, you’re not alone. The ways people interact with money and the thinking behind their decisions offers important insights for marketers in financial services and beyond–and was the focal point of our UK office’s Breakfast & Brainfood event. Read our four big takeaways from our conversation with Simon Moore, Chief Psychologist at InnovationBubble.

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