Lyft Earnings: Supply and Demand Remain High, Offset by Lyft’s Lower Prices

Our main takeaway from Lyft’s second-quarter results is that while the firm lowered prices to be more in line with the market, its network effect did not weaken much—the number of riders continued to grow (as expected) while revenue generated per rider declined by only single digits from last year when prices were high due to a shortage of drivers. Uber did not experience such a decline in rider monetization because its prices have been more steady as it experienced fewer limitations on the supply side than Lyft did last year. If Lyft maintains its prices at market level while lower than last year, we do not foresee a significant change in market share between the two.