What's going on?
Ride-hailing behemoth Uber missed revenue forecasts late on Thursday – ride-failing to match arch-enemy Lyft’s better-than-expected second-quarter results.
What does this mean?
Uber’s revenue was much lower than investors expected last quarter – unlike Lyft’s, which exceeded expectations on Wednesday. Now both companies are public, they’re under pressure to make a profit sooner rather than later. They’ve called time on the hefty discounts they’d been offering riders and drivers to lure them in, and instead raised prices in several markets. But that didn’t do Uber much good: it suffered a bigger quarterly loss than forecast, perhaps because it can’t afford not to offer competitive prices in major markets like the UK.
Why should I care?
For markets: Locked up – but investors can still flee.
Investors initially bought Lyft’s stock in a big way following its update on Wednesday (and Uber’s too – what’s good for the goose is good for the gander, after all). But some made a sharp U-turn after the company announced that its “lock-up” – the period for which investors commit to holding on to newly listed shares – would expire earlier than planned. That means there’s a chance more of Lyft’s shares will hit the stock market, but without enough demand to stop their price from falling. And if investors were looking for shelter in Uber’s stock, they didn’t find it: its share price initially fell 10% on Thursday after its update.
The bigger picture: Uber’s fighting battles on all fronts.
While ride-hailing firms might not be tussling over the lowest prices anymore, competition may only just be hotting up in Uber’s food delivery segment. Just Eat and Takeaway.com have now officially agreed their mega-merger, and Deliveroo recently added Amazon to its investor base. That’ll help them both in their efforts to take on Uber – which, for all its ride-sharing woes, still managed to more than double its Eats customers compared to a year ago.