Lyft shares plunged 17% on Wednesday after the company gave a weak outlook for the key summer quarter, sparking concerns that it is being edged out by rival Uber.
Uber and Lyft, which reported strong results on Tuesday, are locked in a fierce battle for market share in the North American ride-hailing sector.
Uber, which benefits from its global reach and breadth of services, has relied on its subscription service to attract customers, while Lyft has expanded by focusing on competitive fares and company-wide cost-cutting.
“Lyft may struggle to capture Uber-like market share, but the market fundamentally needs a second competitor to keep pricing in balance,” said Mike Ramsey, transportation analyst at Gartner.
On Wednesday, CEO David Risher announced “Price Lock,” a flat-rate feature that offers passengers on fixed routes a maximum fare.
Lyft projects gross bookings (total transactions on the Lyft app excluding tips) to be between $4 billion and $4.1 billion in the three months ending in September, the peak period for tourism-related travel.
Analysts had estimated $4.13 billion, according to LSEG estimates.
The company’s adjusted core profit outlook was $90 million to $95 million, below market expectations of $104.3 million.
Lyft reported better-than-expected revenue for the quarter ended June 30 and posted its first net profit, thanks in part to cost-cutting measures last year.
Since Mr. Risher took over last year, Lyft has cut hundreds of jobs, narrowed the company’s losses and managed to limit fare increases.
Lyft held its first investor day in June and projected steady growth of 15% in total annual bookings through 2027.
Second-quarter revenue rose 41% to $1.44 billion, beating expectations of $1.39 billion.
Net income was $5 million, compared with a net loss of $114.3 million in the same period last year, after recording restructuring-related charges of $46.6 million.
With post wire
