Lyft continues to maneuver through driver shortage as rival Uber boasts revenue growth

Yahoo Finance tech reporter Allie Garfinkle joins Yahoo Finance Live to talk about the competition between Uber and Lyft.

Video transcript

SEANA SMITH: Uber shares moving to the upside after just about 5 and 1/2% today after reporting key wins. Uber CEO Dara Khosrowshahi saying, quote, "We have clearly separated from our competitors and driver preference." Uber rival Lyft is scheduled to report its fourth quarter earnings tomorrow. So where does that leave Lyft? Yahoo Finance tech reporter Allie Garfinkle is here with more on this. And Allie, let's start with Uber because the share popping 5 and 1/2% today. Certainly very pleased by not only what we got from the results, but also what we heard from the earnings call.

ALLIE GARFINKLE: Yeah, absolutely, Seana. It's important to remember here some of these numbers are really key. Uber reported a 49% year over year revenue growth. And yes, that's a pandemic story. The narrative is that the company is benefiting from these post-pandemic trends.

And Lyft, in theory, should be set up to benefit from some of those trends, too. So I kind of wanted to pull out three things that are really important to think about as we're looking at this. The first is drivers. The driver shortage is, more or less, over, is what we're hearing. And though it affected Uber, it certainly affected Lyft.

In fact, I want to pull out a quote from 2021 where co-founder Logan Green said in an earnings call that bringing more drivers onto the system takes time and it's like turning the Titanic. So they need to attract those drivers so that they're back is simply not enough.

The other thing I think we should be watching is Q4 active riders. So that's expected to come in at 20.3 million, but Uber's app is seen as more diversified and stickier. So the real question for Lyft is going to be, are they attracting users? Are those users staying?

And the third thing to remember that's kind of going to come down the line, but I think we will start to maybe hear some murmurs of it is, Lyft is really US centric. Uber is more international. And there are concerns about the regulatory environment for these rideshare companies down the line. So that's kind of the situation that Lyft is walking into here. And it's a tricky one.

DAVE BRIGGS: No doubt. It's just so interesting to see Uber up 5% and see Lyft now down 6 plus percent on the day. What's the bull case for Lyft?

ALLIE GARFINKLE: You know, candidly, Dave, I'm not entirely sure. However, what I can tell you is that there are growth numbers. Like, I was looking at a Raymond James report, for instance, that said Lyft's daily active users are up about 4% year over year this quarter, building on 8% year over year last quarter. So there is growth that is slow. Again, logically, it seems like they should be benefiting from some of these post-pandemic trends, but we'll see. It's important to point out here, Dave, in analyst world for Lyft, 19 buys, 23 holds, two sells. So there are bulls out there.

DAVE BRIGGS: Yeah, they're completely untethered, really, in their reaction. That's what's interesting. When you watch the cruise lines rise and fall together on the same piece of news, rarely happens recently with Uber and Lyft, which is a fascinating dynamic. Allie Garfinkle, thank you.