{"id":46169,"date":"2023-08-09T02:03:51","date_gmt":"2023-08-09T06:03:51","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/opinion-a-ride-share-price-war-is-brewing-and-it-could-mean-bad-news-for-lyft\/"},"modified":"2023-08-09T02:03:53","modified_gmt":"2023-08-09T06:03:53","slug":"opinion-a-ride-share-price-war-is-brewing-and-it-could-mean-bad-news-for-lyft","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=46169","title":{"rendered":"Opinion: A ride-share price war is brewing, and it could mean bad news for Lyft"},"content":{"rendered":"
\n

Lyft Inc. and Uber Technologies Inc. may be in the early stages of a price war, and investors in money-losing Lyft especially need to be prepared. <\/p>\n

Whereas Uber
\n UBER,
\n +0.47%<\/bg-quote>
\n just posted a quarterly GAAP profit and has enjoyed a soaring stock price this year, Lyft
\n LYFT,
\n +5.38%<\/bg-quote>
\n still has work to do as it tries to stand out in the eyes of the investment community \u2014 and apparently with riders too. <\/p>\n

\n

Lyft\u2019s new chief executive, David Risher, told analysts on Tuesday\u2019s earnings call that the company is focused on differentiating itself. One of those ways could be by getting rid of surge pricing, or higher prices during primetime usage.<\/p>\n

\u201cThat\u2019s a bad form of price-raising. It\u2019s a particularly bad for us because riders hate it with a fiery passion,\u201d Risher said. \u201cAnd so we\u2019re trying to really get rid of it. And because we\u2019ve got such good driver supply, which we\u2019ve worked really hard to get, it\u2019s decreased significantly.\u201d <\/p>\n

Read<\/strong>: New Lyft CEO\u2019s \u2018unusual\u2019 pay structure is a \u2018sign of the times\u2019<\/p>\n

He said Lyft\u2019s share of rides affected by prime-time pricing was down 35% in the second quarter from the first quarter. \u201cSo that has a revenue implication, right? We\u2019re actually taking less money. But it\u2019s good for our riders, and it\u2019s good for our overall market ourselves,\u201d Risher said.<\/p>\n

Whether the trend is good enough for Wall Street remains to be seen, however. Lyft shares were down more than 6% in choppy after-hours trading Tuesday following the latest report, which contained results that were pretty much in line with Wall Street\u2019s expectations, as summer travel and rides to the office helped increase demand. <\/p>\n

The trend toward lower pricing by Lyft had already caught Wall Street\u2019s eye before the company faced investors. In a preview note ahead of earnings, Brian White, an analyst at Monness Crespi & Hardt, said that he\u2019d spotted \u201ca meaningful improvement in Lyft\u2019s value proposition, driven by more competitive pricing\u201d since April.<\/p>\n

Opinion<\/strong>:\u00a0How Uber pulled off its stunning turnaround from money pit to cash machine<\/p>\n

On the earnings call, some analysts indicated concerns about the pricing trend, asking how else Lyft was differentiating itself versus larger rival Uber. Risher said that Lyft has rolled out features like \u201cwait and save\u201d \u2014 where riders wait longer for a ride but pay less \u2014 and is also focusing on non-emergency health-care rides, which grew 40% in the second quarter. <\/p>\n

Nonetheless, investors should pay close attention to Lyft\u2019s change of tune on pricing. Its profitable rival may be better prepared for a price war, and Lyft may not fare as well. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Lyft Inc. and Uber Technologies Inc. may be in the early stages of a price war, and investors in money-losing Lyft especially need to be prepared. Whereas Uber UBER, +0.47% just posted a quarterly GAAP profit and has enjoyed a soaring stock price this year, Lyft LYFT, +5.38% still has work to do as it […]<\/p>\n","protected":false},"author":1,"featured_media":46170,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-46169","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nOpinion: A ride-share price war is brewing, and it could mean bad news for Lyft | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Lyft Inc. and Uber Technologies Inc. may be in the early stages of a price war, and investors in money-losing Lyft especially need to be prepared. 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