Improvement in Network Effect Continues, but Profitability Remains a Few Years Away for Lyft

In the U.S. market, Lyft has emerged as the number-two ride-sharing player, a position we think it will keep for years to come. It is currently having difficulty maintaining its market share against the market leader, Uber, in pursuing riders in an addressable market (including taxis, ride-sharing, bikes, and scooters) that we value at over $690 billion (based on gross revenue) by 2028, up from our estimate of around $500 billion in 2023. In our view, Lyft warrants a narrow economic moat rating, thanks to the network effect around its ride-sharing platform and intangible assets associated with riders, rides, and mapping data, which we think can drive the firm to profitability and excess returns on invested capital.