Amazon Doesn't Need to Buy Lyft

Speculation has been running high for nearly two years that Amazon will or should buy Lyft. This reminds me of the annual Apple should or will buy TomTom guesses. Apple never bought TomTom and Amazon has no need to buy Lyft.

Amazon has an existing profitable business in delivering goods via its own trucks, the U.S. Postal Service, as well as via a network of gig workers. The thinking is that Lyft, unlikely ever to be profitable and fighting a losing market share battle with Uber, will benefit from adding Amazon package delivery to its portfolio - along with a range of other delivery opportunities - meals and whatever else might come to mind - especially on short notice.

The problem is that Lyft needs such a rescue by Amazon way more than Amazon needs to provide that rescue. Amazon is completely in command of its logistics and is actually in a position to add ride hailing services to its existing platform without too much stress. Adding Lyft via an acquisition brings with it a mountain of debt and all of Lyft's shortcomings vis-a-vis Uber.

If Amazon wants to enter the market it likely brings massive logistical advantages as well as a more positive customer relationship than either Lyft or Uber can claim. Amazon will also have the advantage of leveraging its Prime subscriber base and purchasing behavior data to determine which markets make the most sense for adding this new transportation service to the existing platform.

Or, maybe, it simply makes no sense for Amazon to add on a demonstrably unprofitable value proposition to its platform and is better off simply reaching an agreement for Lyft drivers to deliver Amazon goods - just as Lyft already makes use of Amazon Web Services.

Should Amazon buy Lyft? Judging by the ongoing decline in Lyft's stock price I suspect that I am not the only one who thinks this is a bad idea for Amazon. This is a 2+2=3 kind of deal. It's a deal and a headache that Amazon doesn't need. Sadly for Lyft, I don't think this is in the cards. As for Apple and TomTom - that isn't happening either.