This article will share details of recent headlines in the news about Uber’s rise and Lyft’s fall.
The question for drivers is, does any of this make one bit of difference for our gig earnings? What action, if any, should you take?
Since Uber and Lyft began, Uber has been in the lead as far as market share. But for a while, Lyft was making a decent wedge and keeping its head above water.
Now there’s a clear division in which platform holds success in its palms and which may be on its way out the door.
Uber is having a moment. They are now the darlings of Wall Street. I recently watched Dara K, Uber’s CEO, on CNBC, and he was sharing Uber’s great corporate results.
Lyft, on the other hand, is not doing so well. Lyft had a horrendous earnings season.
Uber, as a company, is doing very well. While many drivers see Uber as the enemy because of how they continue to lower pay and incentives, to shareholders, Uber is doing a good job.
This screenshot from a CNBC interview with Dara K. shows that Uber generated $8.61 Billion in revenue. You can also see how the stock price increased by over 7% on the day.
This screenshot shows that Uber’s trip count increased by 19%. This is still a massive increase, even with the tailwind of coming out of the pandemic.
Lyft, on the other hand, did not perform nearly as well. Lyft is a smaller company, and less diversified.
And now that interest rates have increased, Lyft will have a difficult time as it tries to grow and compete with Uber.
- Lyft share price plunges 36% following weak profit outlook
- Financial Woes Thrust Lyft, Long in Uber’s Shadow, Into the Spotlight
- Lyft stock melts down after earnings ‘debacle for the ages’
Uber Is Trimming Its Workforce
Like many tech companies, Uber is letting go of some employees. They call it “cost-cutting.”
In an effort to be more profitable, companies such as Uber reduce their expenses by reducing payroll.
- Uber is cutting some employees as part of a ‘more rigorous approach’ to performance reviews
- Uber Freight cuts 150 jobs, about 3% of the unit’s head count
What Does This Mean For Drivers?
I don’t have any concerns regarding Uber. They are clearly the market leader. While they let go of some employees, their ride demand is increasing. As long as more people want rides, Uber will need more drivers.
We are still a long way off from driverless cars. While drivers are the most significant expense Uber carries, at this time, Uber still can’t do it without us.
Lyft’s current situation tells me that Lyft could be a takeover target. In Lyft’s weakened state, another company may offer to buy Lyft. Even before Lyft’s recent poor performance, acquisition rumors were flying about.
This article on Benzinga suggests Amazon, Google, Ford, or GM could be suitors. Some have even suggested that Uber could buy Lyft and end the domestic competition.
The idea of DoorDash and Lyft merging was also floated about a year ago.
What Should You Do?
In an environment of such uncertainty, drivers should sign up for as many gig companies as possible. Being flexible is your best defense against uncertainty.
I drive for both Uber and Lyft. If one of them goes away, I will still have the other for my part-time weekend driving.
If you want to deliver food, you should sign up for all the services you can in your area. You will have options if one company fails, gets bought out, or merges with another company.
Sign up for all the companies that you can. Be flexible. Keep your options open.
This article aims to impress upon you the importance of having a backup plan. The best plan in a state of uncertainty is to not only keep all your options open but to go out and create more options.
Uber is the king of the stock market today. Lyft, with its new CEO, David Risher, could rally and take over the crown in the future.
It is the nature of business for things to change. Not too many years ago, no one had heard of Tesla. Now, every other car I see on the road, it seems, is a Tesla.
Times change. Companies change. It is best to be proactive and prepared. That’s my plan. Be safe out there.