Thursday 27 February 2020

Lyft Stock Continues to Decline and Struggle

In its 4th-quarter report, Lyft (NASDAQ:LYFT) fortunately came in ahead of revenue and earnings estimates. The revenue was $1.02 billion. This is a 52.4% increase from the same quarter last year when the company had revenues of $669.57 million. This means the company had a net loss of $356 million, certainly above the $248.9 million loss for the same quarter last year. Lyft amazingly increased total active riders to 22.9 million, up from last year's 17.9 million.

However, Lyft stock is not increasing much. There are reasons for this.

Uber is larger than Lyft. Uber reported revenue of $4.069 billion. Uber reported a loss of $0.64 per share, or $1.096 billion. Uber is better in terms of its "net loss margin" with losses at 26.9% of revenue. Lyft's losses for the quarter are 34.9% of revenues.

Amazingly, in the previous quarter, Uber had about 4 times as much revenue as Lyft. Uber is larger size. Uber offers ridesharing services outside of USA and Canada. Lyft focuses on rideshare in North America. Uber wants to expand to more markets.

There is a bad thing for Lyft. Its operating expenses continue to exceed revenues by a wide margin. For fiscal 2019, Lyft had just under $3.616 billion in revenue. The operating expenses of $6.318 billion are quite a lot. Lyft could continue to struggle to profit when self-driving cars become more popular.

Autonomous vehicles could create more competition in the future. GM (NYSE:GM), Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG), and others plan on entering this business. Lyft could try to significantly reduce the number of drivers it uses. However, this does not guarantee a profit. There are also city regulations to think about.

Lyft and Uber are the most popular ridesharing companies. Average trip costs for both Uber and Lyft are roughly similar. Lyft operates in 644 cities in the USA and Puerto Rico and 9 cities in Canada. It develops, markets, and operates the Lyft mobile app, offering car rides, scooters, a bicycle-sharing system, and a food delivery services.

Lyft stock price has had a lot of turmoil after its IPO. Lyft (NASDAQ:LYFT) had struggles. It was priced at $72 for its April 2019 IPO. Following this, the shares temporarily went up above $75 before falling lower to $50. The stock went back to $68 at some point. Now, it is at about $37.

Lyft as a company is focused on consumer transportation. It is focused on North America. It is focused on serving drivers and passengers. Lyft is in less countries than Uber.

Uber is in over 60 countries. Although, Uber didn't actually make it in to all of the USA states. At some point, Uber tried China and backed out of China.

Probably Uber will not acquire Lyft. That is an unlikely possibility.

Lyft and Uber companies have had some safety issues. Newspaper articles exist about assaults on passengers. Customers are warned to exercise caution when using ridesharing companies.

Autonomous cars could become popular in the future. Companies like Uber and Lyft could profit a lot from this. If you believe in that, you might get Lyft as an investment.

Lyft, Inc. is a ridesharing company based in San Francisco, California. It operates in 644 cities in the USA and 12 cities in Canada. It develops, markets, and operates the Lyft mobile app, offering car rides, scooters and a bicycle-sharing system. It also has food delivery services.

The Headquarters are in San Francisco, California, United States. It was founded in June 2012. The CEO is Logan Green (From Jun. 2012). The revenue was 2.157 billion USD (2018). The founders of Lyft are Logan Green and John Zimmer. The company website is

The biggest owners of Lyft are:

Rakuten (11%)
General Motors (6.6%)
Fidelity Investments (6.5%)
Andreessen Horowitz (5.3)
CapitalG (4.4%)

Above: Lyft Prime Time Heat Map with Power Zones in Toronto.

Above: Lyft’s Shuttle service. Lyft has officially launched in June the beta version of Shuttle: a carpool service that will travel along a certain route and make stops along the route.

1 comment:

  1. Apart from USA, Lyft is available to customers in Canada. It currently operates in Toronto and Ottawa.