Lyft stock dives following analyst downgrade

Yahoo Finance Live looks at Lyft's shares following a stock downgrade citing comparisons to Uber's superior driver count.

Video transcript

SEANA SMITH: All right, my play today is Lyft. The stock sinking on a downgrade from RBC analyst Brad Erickson, cutting his rating on the stock to sector perform on worry about its big rival, Uber. So Erickson warns that Uber, quote, "has a structural supply advantage when it comes to drivers," citing longer wait times for Lyft riders.

He also acknowledged that he is a little bit late to the game when it comes to this reduced outlook. Remember, Lyft has had a very tough go at it since it started the year. Shares off just about 70%. We're seeing the drop today on this downgrade.

Dave, you and I have talked a number of times. And it's a big theme today-- the labor shortage, trying to attract some people into the workforce that have remained on the sidelines. A lot of companies simply can't get the workers they need unless they're offering very, very attractive incentives. It looks like, at least from RBC's perspective, Lyft isn't able to keep up with that demand.

DAVE BRIGGS: Not a great sector to begin with. I mean, Uber's down 5 and 1/2% today on a broader market decline and down, what, 35% year to date. But it's surprising to me to see any difference between Uber and Lyft in terms of that perspective because I don't know about you-- most of us get online and look at both day-to-day.

At least, when I fly into an airport, I compare both, and they're generally in the same neck of the woods. It was the first time since May of '21 that Uber's times were actually faster than Lyft. So Lyft had been much stronger, and in particular, that focus is in the West Coast. LA, 33% slower are there times, according to this analyst note. So that is problematic for Lyft, but not a great sector either way.