Ronnie Mola, Petscom, Editor discussed on Here & Now
Mola is data editor for re coachee joins us from New York. Hi, ronnie. Hi, thanks for having me. Well in case people don't remember the online pet supply store. petScom got a lot of attention for its sock puppet. But it collapsed because the company itself was in very strong in the dot com. Bubble burst of two thousand you right and Recode this week that the last time unprofitable companies went public at this rate was then so let's take a closer. Look how is it that lift more than two billion dollars in revenue last year is still losing money. They've outsourced their workforce. They don't have factories. What what are they spending it on? Well, it still costs on a lot to bring in that revenue in the first place. They have to pay for insurance payment processing the lift platform itself. It's also important to note that lift could have turned a profit if they hadn't spent money on marketing or research and development, but if they didn't spend that money on marketing, and research and development, they wouldn't have more customers coming in. And they wouldn't have. Future in which they someday have autonomous cars and don't have to pay drivers anything, and we should say that the big rival Uber is also losing money. They are also preparing for an IPO one that dwarf lifts is this because even though it seems to us like they have an awful lot of money. They need more. They do. Well, they certainly think they need more money. They're going to the public markets. So that they could raise money much more quickly than they can as a private company. The idea is that they use all this money put it back into their company and grow. They they expand to more areas expanded different business models. They get more customers by advertising, and then in the long run the hope is that they'll make a profit because of all the spending now. Yes. And what else might they be spending it on? And we were just thinking how is this possible? And someone suggested well, maybe research and development. Driverless cars would else might investors like to hear that lift is spending money. The on. Well, I know at least for Uber. Uber is spending on things like ubereats, which is the food delivery investors like to see that there. That they're spreading they're hedging their bets a little bit. But I'm lift definitely is investing in autonomous vehicles. They hope to one day just be able to take in the whole class of the fair as opposed to giving quite a bit of that to the drivers themselves. We know Ronnie, I'm hearing all these numbers, and I'm sure lift an Uber drivers are hearing to these numbers in the billions of dollars in an IPO and many people are drivers as full-time gig or to supplement other income. But we know there's not a huge ton of money to be made just kind of curious. Do you think that this investment this, you know, going public will this money filter down to better income for those drivers? I doubt it right now. Uber and lifter sort of an arms race of who could have lower prices and they're competing with each other. And they're trying to beat each other out across the country. So I don't think that's gonna lead to higher prices. They're not going to get more. Customers by charging more. And in the long run what these investments. That Uber and lift are making will do is actually they're trying to have autonomous vehicles. They're trying to have vehicles that drive themselves. So eventually there won't be drivers at all. Okay. Well, one could have hoped there. What in general does this mean all these huge IPO's? Is there something that in general, it might mean about the economy? Yes. And no there's a lot of differences. I the the thing that everyone saying that this is a lot like the dot com bubble when a bunch of tech companies a lot of investors were speculating on companies and then the market crashed. The thing that's different about this. Now is that even though there's so many the rate of IPO's is is the same Eighty-one percent of them are unprofitable last year. There's a lot fewer of them in general. There's also the companies that are going public are older they've been around for a longer time. So they've have more proven business models than the ones during the dot com. Bubble the revenues also a lot higher, and as I mentioned earlier, quite a few of these companies could be profitable. It's they're choosing not to be in order to put the money back into their businesses and grow, right? It's not the sock puppet for petScom. He was so popular is on good Morning, America and everything. But it turns out not really I mean that went from nineteen ninety eight to two thousand. So it was just in a heartbeat as you said, these companies are older, Ronnie Mola data editor for Recode. Thank you so much. Thank you..