Uber vs Lyft are fierce competitors trying to disrupt the transportation industry. The Uber vs Lyft stock rivalry goes back a long way. Both companies were started close to the same time and for similar reasons.
Lyft was originally Zimride. It was to be a long-distance carpooling service that founders Logan Green and John Zimmer came up with after they couldn’t find a ride in 2007. Uber’s founders, Travis Kalanick and Garrett Camp, started UberCab after they couldn’t find a cab in 2009.
Uber vs Lyft Stock Introduction
The first trip for Uber was in July of 2010 in San Francisco, and they booked their one billionth trip in December of 2015.
Besides the ride-hailing business, Uber has been building several other businesses, including UberEats (2015) and Uber Freight (2019).
They’re also investing heavily in self-driving vehicle technology, launching a pilot program in Pittsburgh, PA, in September 2016.
Kalanick remained the CEO until June 2017, when he was pressured to resign over a sexual harassment scandal in upper management. He’s still on the board of directors, however.
Kalanick’s replacement is Dara Khosrowshahi, formerly the CEO of Expedia. Uber’s long-awaited IPO came on May 10th, 2019, at $45/share.
Getting a Lift from Lyft
- Lyft was originally launched as a service within Zimride in 2012. The following year, the company changed its official name to Lyft and sold Zimride to Enterprise Holdings.
- Lyft has been more focused in its approach, operating only in the US and Canada and not straying far from ride-hailing except for small businesses in scooter and bike rentals. They’ve also invested in self-driving vehicles, although both companies have been scaling back spending in this area during this difficult period brought on by COVID-19.
- Logan Green is still the CEO of Lyft, which led them to their IPO on March 29th, 2019.
Headwinds for Uber and Lyft Stock
Uber and Lyft have both faced a tremendous amount of controversy throughout their lifetime. It’s a bit more than I can get into in this blog post. I’ll mention them briefly so you know what to watch out for in these names.
Early on, the biggest pushback came from taxi companies and groups, who saw their business model suddenly upended. These powerful groups made it difficult for Uber and Lyft in the early days, especially in New York City.
There’ve also been several instances of drivers committing crimes and risking riders’ lives. This naturally called into question the vetting process for becoming an Uber or Lyft driver.
Another concern has been around increased congestion in cities and less use of public transportation systems, which would cause financial pressure on these important public services.
A major battle is “California AB5.” Commonly called the “gig-worker bill,” the bill attempts to make companies like Uber and Lyft, which hire large numbers of independent contractors, hire them as employees.
This would provide gig workers with minimum wage protections and employer-sponsored healthcare benefits.
While it’s still unclear how this will shake out in the courts, Uber has adjusted how it treats their drivers.
Final Thoughts: Uber vs Lyft Stock
These two companies are major industry disruptors led by extremely talented managers, which makes for a great long-term investment thesis.
However, their near-term results are hazy at best. Either could be a good long-term hold for a patient investor with ice in their veins.
But these aren’t the kinds of companies you can buy and forget. It would be best if you continued to do the work to monitor them, ensure they have profitability sooner rather than later, and continue growing for many years.
If I had to take just one, I’d take Uber, as it’s a larger company with more levers to pull for growth over the next several years. Let us know your thoughts on Uber vs Lyft stocks in the comments!
