Nov 6, 2023

Lyft's gains from price cuts not enough to dent Uber's US lead SECTIONS Reuters Rate Story Synopsis The average price of a standard Lyft ride as of September-end was more than 4% cheaper than Uber's similar service, according to data analytics firm YipitData, a big change since February, when both the companies were charging nearly the same price. Reuters Lyft 's price cuts may have helped the ride-hailing firm make a small dent in Uber 's US market share, but not enough to prevent the bigger rival from reporting its second quarterly operating profit. After the slowest sales increase in the second quarter in two years, Lyft is expected to post a bigger growth story in the September quarter as it attracted more riders with lower prices. Elevate Your Tech Prowess with High-Value Skill Courses Offering College The average price of a standard Lyft ride as of September-end was more than 4% cheaper than Uber's similar service, according to data analytics firm YipitData, a big change since February, when both the companies were charging nearly the same price. For Lyft, which under new boss David Risher has signaled a more aggressive pricing strategy, market share wins have been slow. Lyft's share has risen just 200 basis points to 29% since January, when the price war started, YipitData said. "(Lyft) has the potential to hurt Uber," said Adam Ballantyne, senior analyst at Cambiar Investors that owns Uber shares. "If Uber wants to take more market share quicker from Lyft, it could lower prices. It would not surprise me to see the pricing impact the profit story near term." Uber, which has a larger presence and a more diversified business that includes food delivery, posted an operating profit in the quarter ended June for the first time in its 14-year history. Discover the stories of your interest For the July-September quarter, it forecast a key profit metric to nearly double to $1.02 billion. But Uber's growth has slowed. In the quarter ended June, Uber's revenue rose 14.3%, a pace almost half that of the previous three months. Analysts estimate growth in the September quarter to be about the same as the previous quarter. Lyft is likely post an 8.4% rise in its third-quarter revenue on Wednesday, LSEG data, compared with a roughly 3% increase in the second. Adjusted core earnings - a closely watched metric of profitability - is expected to jump by a quarter to $82.6 million. "Lyft has narrowed its focus just to ride hailing... and brought in a new management team that's really focused," said Christopher Vandergrift, analyst at Columbia Threadneedle Investments, an investor in both Lyft and Uber. Experience Your Economic Times Newspaper, The Digital Way! Monday, 06 Nov, 2023