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Investors Are Not Interested To Invest On Uber And Lyft

It has been observed that investors are thinking twice before investing their funds on Uber and Lyft. Investors are now questioning about the business models of Uber. People often expect the first class Lyft from Uber and excellent services from the other business of Uber Company as it is spread in very large scale. Two levels business plan of Uber and Lyft are decreasing the profit. It also includes the driver payments and the raising costs in these days.

In last few months, Uber profits decreased to 20% from 69% in the first quarter i.e. March 2019. Uber and Lyft drivers are tricking with their apps by inducing surge pricing, increasing the fares of passengers and wages for drivers as many of drivers are having low income. Drivers say that the company doesn’t cover the car ownership cost, gas and maintenance charges in payment and also complained about years of pay cut.

Reports show the years of pay cuts and hardships of drivers to survive as Uber or Lyft drivers. Both the companies are in tremendous loss in these days, Uber experienced loss about $1 billion in first quarter and Lyft is expected to lose $1.1 billion. Because of all these issues, there is consistent fall in shares of these companies and investors are hesitating to invest in Uber and Lyft.

Uber and Lyft drivers were on strike in last week on 8th May because of the low pay and turned off their mobile app. On the drivers’ complaints, Lyft explains that the practice of surging cost is not necessary at all as most of the Lyft drivers earn average $20 per hour. However, both the companies need to focus on their unsustainable business models and the difficulties faced by their drivers in these days.