As everyone knows, Uber (UBER) and Lyft (LYFT) are “ride-sharing services,” which is just a creative consulting term for a taxi. Both are companies that have helped solve a big problem in society – getting somewhere quickly and cheaply – but I’m less convinced that either are good long-term investments. Uber and Lyft have expanded the prevalence of taxi service, which was previously costlier than it should have been, and ran it down to prices that make it a viable alternative to public transit, regular (expensive) taxi service, and even owning a car altogether. When supply goes up, price goes down.The issue, by consequence, is that if you introduce too much supply, ultra-competitive pricing induces razor-thin margins. Where Uber has excelled is that it hires its drivers as general contractors, so there are no laws where these individuals are guaranteed a minimum wage. Prices for fares run in proportion to supply and demand as dictated by the algorithm on the app.It also offers luxury services, which can garner higher gross margins, but this is a small sliver of Uber’s sales. Most opt for “UberX” (non-shared ride) or “UberPool” (shared ride, which offers the benefit of a cheaper price). Uber is currently losing $2.5-$3.0 billion per year. Lyft, as a smaller operation, is losing about $1 billion per year. If they lack the pricing power to boost their margins higher, is there really a viable path to profitability? At the moment, that doesn’t seem to be the case. Both of these companies lack pricing power and it’s very much of their own doing due to their effect on pushing out the supply curve as it relates to taxi service. If prices are increased, then demand declines and hence where is the net benefit to revenue or margins?In this way, Uber and Lyft are similar to Snap (SNAP) in that both have large customer bases, but generating profit from these bases doesn’t look encouraging at the present moment. All three are likely to need to generate services and products down the line in order to justify their enormous valuations, as margins will be negative for the foreseeable future. --I've opened this up for public opinion. If either Uber or Lyft were to IPO tomorrow, would you like to be an investor?Agree - Yes, Uber and/or Lyft are long-term winnersDisagree - No, I wouldn't invest in either (or need more information)