Lyft Investors Grapple With User Metrics as Uber's IPO Looms

(Bloomberg) -- Lyft Inc. has had a rough ride in its two weeks trading as a public company and things don’t look likely to get much easier with bigger rival Uber Technologies Inc. breathing down its neck.

The stock fell almost 11 percent on Wednesday and is down more than 14 percent from its debut price of $72.

“Lyft shares continue to be weak as many investors we have spoken with have worries about Uber’s impending S-1 and roadshow which could be a dark shadow over Lyft’s stock in the near-term,” Wedbush analyst Daniel Ives wrote in a note to clients. “The primary issue is around the underlying metrics that Uber will discuss around take rates, ride sharing data, driver ecosystem, and a myriad of other metrics relative to Lyft which may put the company in a more negative light.”

Uber is expected to file for its public offering as soon as Thursday, when potential investors would get the first opportunity to pore over hundreds of pages of detailed information on the ride-sharing giant’s business plans.

“With Uber, investors will soon have a second option to make a bet on the future of mobility and transportation with the clear market share leader, while competitor focus will likely also zero in on Waymo/Google and even the traditional auto sector which is investing in autonomous vehicles in its own right,” Ives said.

Lyft also has problems of its own. According to Consumer Edge analyst Derek Glynn, the top queries from investors were Lyft’s take rate -- or revenue as a percentage of bookings, its fate in a world of self-driven cars, and the company’s path to making profits.

Nevertheless, Glynn sees Lyft becoming profitable in 2023. “We believe higher adoption rates, greater utilization, and an increase in revenue per ride will be key growth drivers over the next few years,” he wrote in a note.

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