6 min read

    6 min read


    Uber and Lyft are expected to drop earnings news this coming week, and the media has a lot to say about it. Should we expect good or bad news? Senior RSG contributor John Ince sums it all up for us, and more, in this week’s rideshare roundup.

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    Uber’s lockup expiration could ‘hobble the entire market’ even more than Beyond Meat, Jim Cramer warns  []

    Sum and Substance:  “When you have billions of dollars of stock entering the market without a natural home, you better believe the averages will come under pressure,” CNBC’s Jim Cramer says.

    The “Mad Money” host warns that Uber’s stock lockup expiration could hurt the broader market even more than Beyond Meat’s expiration on Tuesday.

    “These lockup expirations and IPOs [are] going to take their toll, unless a flood of new money comes into the stock market,” he says. Uber’s lockup expiration could ‘hobble the entire market’: Jim Cramer

    My Take:  This is the day we’ve been waiting for. We get to see just how many people want to get rid of their stock. Remember this is largely employees and early investors – so this is as close as we get to having the inside word.

    Uber hails BBVA as it launches Uber Money  [BVVA]

    Sum and Substance: Ride sharing giant Uber yesterday announced it was launching a new venture, Uber Money, becoming the latest big tech business to move deeper into financial. services. …

    Announcing their new initiative, Uber said their focus was on trying to help everyone achieve their own financial journeys in life. While details on Uber Money were light, newly appointed Uber Money boss Peter Hazlehurst said the emphasis initially will be on trying to support the brands 4 million plus partner drivers globally. …

    Following a successful pilot in the U.S., drivers will get access to a debit card linked to their Uber account, so they can spend their earnings directly from their app. Uber has also recently launched instant pay too, so their drivers now get the money from their rides paid to them immediately, rather than having to wait for it to go through the Uber accounting system, then transferred to their bank. Asked to explain the move, Uber said it was a response to issues they knew their drivers and others in the gig economy had around access to financial services. …

    My Take:  This is a trend.  Uber has to look someplace for profits, and finance is a good place to start.  I’m wondering what competitive advantages Uber has. It could be a good market.

    GrubHub is getting crushed in the food delivery wars. The stock is nose-diving 40%  [CNNBusiness]

    Sum and Substance:  New York (CNN Business)Competition is brutal in the food delivery wars, and now it is taking a severe toll on one of the pioneers in the business.  Shares of GrubHub (GRUB) plunged more than 40% Tuesday, to their lowest level since March 2017, after the company announced late Monday that its earnings and sales missed Wall Street’s forecasts. The company, which also owns food delivery service Seamless, lowered its outlook as well.

    GrubHub is finding it tougher to keep customers now that so many other companies offer quick delivery of their favorite takeout dishes. Uber (UBER) has the popular Uber Eats service. Privately held DoorDash and Postmates are also major rivals.

    Although Amazon (AMZN) recently pulled the plug on its Amazon Restaurants delivery service in the US earlier this year, the company is still a leading player in the grocery delivery business and also has a stake in UK-based food delivery startup Deliveroo.

    My Take:  I’ve been curious about the food delivery business and now we know.  Uber has held food as a profit center, but in a price sensitive atmosphere, business growth doesn’t translate into profits.  Uber seems to be in another area where growth is the gospel.

    New data shows Lyft is continuing to gain on Uber. Here’s what to expect from the company’s earnings report.  [Business Insider]

    Sum and Substance:  Lyft and Uber are both scheduled to report earnings over the next week, with Lyft kicking off the show on Wednesday. Going into the report, new data shows Lyft continuing to gain market share in its fight against its larger rival.

    Executives also said last week that they expect to turn a profit sooner than expected, helping Lyft shares find a much needed boost.  …

    For the first time, data from eMarketer shows, more than half of US adults will use Lyft, with that percentage expected to grow to 59% by 2022. Of course, many people use both apps, and Uber’s still expected to grow 11% this year, the firm estimates. …

    My Take:  Well, it’s the earnings again.  Looks like Lyft has something to show, but we’ll have to wait to see the results.

    California’s Assembly Bill 5 Could Drastically Reshape the State’s Gig Economy. Uber and Lyft Have an Alternative Proposal  [Inc]

    Sum and Substance:  A coalition of the companies, as well as drivers and other workers, unveiled a ballot proposal to take their fight to California voters.

    Uber and Lyft took a major hit in California last month when lawmakers passed Assembly Bill 5, which could dramatically reshape the state’s gig-economy.

    On Tuesday, a coalition of the companies, as well as drivers and other workers, unveiled a ballot proposal to take their fight to California voters.

    The group argues that the new law will strip drivers of the flexibility they value as part of their jobs driving or couriering for the apps. California Gov. Gavin Newsom signed the bill into law in September. It will take effect on January 1.

    DoorDash, Postmates, Instacart, Uber, Lyft are all part of the opposition group, and other companies are expected to join. Uber, Lyft, and DoorDash have already pledged $30 million each to fight the law.

    One month after California’s governor signed a major law that could have devastating effects on many gig-economy companies, including ride-hailing platforms, Uber and Lyft are taking their fight against the new rules directly to voters.

    At a press conference Tuesday in Sacramento, a number of gig-economy companies — including Uber and Lyft — unveiled new details of their $90 million fight to keep drivers classified as independent contractors and not full-fledged employees. The proposed ballot measure could eventually find its way to the November 2020 ballot, if enough signatures are gathered…

    My Take:  Well, if you can’t beat them in the chambers where the laws get made, then try beating them at the ballot.  I have no idea whether this will pass, but I can tell you that there’s going to be a lot of confusion about the ballot… and that the way the coalition wants it.

    Readers, what do you think of this week’s roundup?

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    -John @ RSG

    John Ince

    John Ince

    John Ince is a former Fortune reporter and Wall Street banker. He has about 1,000 rides under his belt driving part time for Uber and Lyft.  He’s writing a book about his experiences entitled:  Travels With Vanessa:  A Rideshare Driver Tries To Make Sense of It all - For a sneak peak visit the link above.

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