Lyft Gets in Trouble

By Douglas A. McIntyre Published Feb 10, 7:30AM EST

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Lyft Gets in Trouble — © Kichigin / iStock via Getty Images

Lyft Inc. (NASDAQ: LYFT | LYFT Price Prediction), the ride-sharing company, is in trouble. While it announced poor earnings, its larger rival Uber released good ones. Being in second place has started to hurt the company and hurt it badly. After it released those results, its stock fell 30%
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For the most recent quarter, Lyft posted a $0.74 per share loss on revenue of $1.18 billion. While these results were not much better or worse than expectations, its forecast for the current quarter was grim. Revenue is expected to be $975 million, against expectations of $1.09 billion. That would be a significant miss.
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Uber had revenue of $8.6 billion in the final quarter of last year, which was up 49% from the same period a year ago. Adjusted earnings were $665 million, compared to $86 million a year ago. (Click here for the 21 companies making the most profit per second.)

Lyft’s shares are off about 70% in the past year to about $11 apiece. This is because it is losing the market share war with Uber. Presumably, ride-sharing demand is growing, but Lyft is not getting those additional customers.
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Lyft did not explain why it is doing so badly. One problem is that Uber has superior coverage. It operates across a much larger map. This gives it opportunities Lyft does not have. Lyft would have to spend a fortune to make its footprint as large as that of its rival, if it could do so at all.
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According to some media, Uber also makes it easier for drivers to share fees. If this is the case, drivers have the incentive to stay away from Lyft.

For whatever reason, Lyft is losing ground fast.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.