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Uber CEO’s Optimism On Competition Post Q1 Results Pull Lyft Shares Up By 5.1%

The shares of Lyft surged on Friday after Dara Khosrowshahi, the CEO of Uber, said that the executives of the company are very optimistic regarding the competition in the market of ride-sharing. The shares of Lyft increased 5.1% on Friday as the stock of Uber rose 1.5%.

The stock of Lyft gained $800 million value surging to $16.7 billion of market value as compared with $67.8 billion of Uber’s value.

Khosrowshahi said that he had agreed with the executives of Lyft who had said earlier that they felt that the market was increasingly becoming rational. He said that he thinks that competing on product and brand is a healthier way to compete than spending money for a challenge.

Both Lyft and Uber have incurred huge losses as they had to provide hefty incentives for attracting both drivers and to the platforms. In the previous quarter, Uber had reported a $1.01 billion loss, while Lyft had announced an adjusted loss of $9.02 for every share. Earlier in May, on the earnings call of Lyft, John Zimmer said that since starting the company, he can see that as a revenue percentage this is the time when the market has been most rational. He added that this makes the choice of consumers between two competitors lean towards the brand than the price.

As far as Uber’s stock are concerned, the analysts seem to be taking the claims more seriously, although they have a wait and see attitude towards it. Analysts of Atlantic Equities said on Friday that although there isn’t any guarantee that this would last, they believe that both the companies would focus on competing through service innovations over a period of 12 months and this should give a tailwind to unit economics of Uber.

The analysts of DA Davidson said that a promotional and rational environment is important, but time will only tell as to whether Uber’s larger scale would drive better driver/rider experiences or the healthier brand of Lyft would be a competitive advantage.

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