Despite starting out as similar businesses, Uber and Lyft have only grown further apart as Uber has expanded beyond giving people rides while Lyft has focused on it.
Why it matters: Diversification is something you hear a lot when it comes to investing because it can help to bring down risk. In Uber’s case, diversification of its business into food and grocery delivery and freight has helped it to weather the past two years better than its primary competitor.
State of play: Both platforms saw their U.S. and Canada rideshare volume last quarter climb back to about 70% to 80% of their pre-pandemic levels, the companies reported this week.
- Yes, but: Lyft says it has to spend more heavily to attract drivers, while Uber says it’s been able to secure more drivers for its platform thanks to all the ways drivers can make money.
What they’re saying: “[W]e’re bringing new drivers on, not as Uber Rides, not as Uber Eats, but as Uber as a platform and to earn in any way, shape or form that they can on the platform,” CEO Dara Khosrowshahi said on this morning’s earnings call.
By the numbers: Active drivers in the U.S. and Canada were up 70% last month compared to a year ago, said Khosrowshahi.
- Total active drivers during the first quarter for Lyft, which only operates in the U.S. and Canada, were up by more than 40%, Lyft CEO Logan Green told analysts yesterday.
The big picture: Despite the picture that Uber painted for investors, shares still sank about 4.6% today and have been down 36% year to date.
- One concern is the continuing impact of inflation and oil prices, MarketWatch’s Therese Poletti notes.
- The other is general investor intolerance for unprofitable businesses, Khosrowshahi commented. (Uber notched its first-ever adjusted profits last year.)
- “[W]e have our hands on all the different levers in order to deliver … the kind of profitability that investors are especially looking for nowadays,” he said.
*By Hope King, author of Axios Closer*