Taxi ranks cannot be worth $10 billion unless some conditions are attached

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I have an innate sense for crass commercial valuations, based largely on seeing too many. So my antennae where pulsing when I read this in the FT this afternoon:

[Google parent company] Alphabet is leading a new $1bn fundraising round in Lyft that values the Uber rival at $10bn, raising the stakes in the fierce competition between the San Francisco based transportation companies.

The investment values Lyft at a $10bn pre-money valuation, which is 45 per cent higher than its previous fundraising, which took place just six months ago.

First, this is not a transportation company. Lyft, like Uber, does not run cabs. It runs a taxi rank.

Second, no taxi rank has ever been worth $10 billion.

And if someone thinks it is then they have four things at the forefront of their minds.

The first is driving the competition out of the market.

The second is then screwing the consumer.

The third is screwing their staff.

And the fourth is then presenting the regulator with a fait accompli as they're hoping all other games will have been driven out of town and that way they'll earn hyper rents from their rank activities.

That's how you can make a fortune from a cab booking service.

And it stinks.