MarketWatch First Take: A ride-share price war is brewing, and it could mean bad news for Lyft

by | Aug 8, 2023 | Stock Market

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
just posted a quarterly GAAP profit and has enjoyed a soaring stock price this year, Lyft
still has work to do as it tries to stand out in the eyes of the investment community — and apparently with riders too.

Lyft’s new chief executive, David Risher, told analysts on Tuesday’s 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. “That’s a bad form of price-raising. It’s a particularly bad for us because riders hate it with a fiery passion,” Risher said. “And so we’re trying to really get rid of it. And because we’ve got such good driver supply, which we’ve worked really hard to get, it’s decreased significantly.” Read: New Lyft CEO’s ‘unusual’ pay structure is a ‘sign of the times’ He said Lyft’s share of rides affected by prime-time pricing was down 35% in the second quarter from the first quarter. “So that has a revenue implication, right? We’re actually taking less money. But it’s good for our riders, and it’s good for our overall market ourselves,” Risher said. 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 result …

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