Lyft plunges nearly 20% after weak forecast sparks fears its losing race with Uber

Lyft’s shares tanked 17% on Wednesday after a soft forecast for the key summer quarter stirred worries that it may be losing ground to rival Uber.

Uber, which reported strong results on Tuesday, and Lyft are locked in a tussle for market share in the North American ride-hailing sector.

Benefiting from a global footprint and wider array of services, Uber has been wooing customers with subscription offerings while Lyft doubled down on competitive fares as well as company-wide cost cuts to boost its business.

“Lyft may struggle to gain the share that Uber has, but the market essentially requires a second competitor to maintain pricing balance,” said Mike Ramsey, a transportation analyst at Gartner.

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On Wednesday, CEO David Risher announced Price Lock, a subscription-based feature that offers commuters on fixed routes a capped fare.

Lyft forecast gross bookings – the total value of transactions on the Lyft app excluding tips – between $4 billion and $4.1 billion in the three months ending September, a period of high tourism-related travel.

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Analysts were $4.13 billion, according to estimates from LSEG.

Adjusted core earnings guidance of $90 million to $95 million also came in below the street target of $104.3 million.

For the quarter ended June 30, Lyft reported better-than-expected revenue and posted a net profit for the first time, driven in part by cost cuts last year.

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Since Risher took charge last year, Lyft has cut hundreds of jobs , narrowed the firm’s losses and managed to keep fare increases in check.

In June, Lyft hosted its first-ever investor day and projected annual gross bookings to grow at a steady 15% rate through 2027.

Revenue rose 41% to $1.44 billion in the second quarter, beating estimate of $1.39 billion.

Net income was $5.0 million, compared to a $114.3 million net loss in the previous corresponding period when the company booked $46.6 million in restructuring-related charges.

With Post wires

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