Lyft Earnings: Riders Return and Driver Supply Shortage Eases, Improving the Network Effect

Lyft reported better-than-expected results as its latest pricing adjustments have driven the rider count, number of rides, rider monetization, and the number of drivers higher. The increase in ridership has encouraged new drivers to join Lyft and existing drivers to drive longer, relieving some of the driver supply pressure that had pushed ride costs up and riders away from Lyft. While Lyft’s network effect has brought back some of those riders, we do not see this impacting the market share dynamics between the firm and the market leader, Uber.