Lyft's soft forecast fans worries of losing ground to Uber, shares tank
Technology
Lyft's soft forecast fans worries of losing ground to Uber, shares tank
(Reuters) - Lyft's opens new tab shares tanked 16% on Wednesday after a soft forecast for the key summer quarter stirred worries that it may be losing ground to rival Uber opens new tab.
Shares fell to an eight-month low of $9.20 in early trading, setting Lyft on track to lose over $700 million in stock market value.
Uber, which reported strong results on Tuesday, and Lyft are locked in a tussle for market share in the North American ride-hailing sector.
Benefiting from a global footprint and wider array of services, Uber has been wooing customers with subscription offerings while Lyft doubled down on competitive fares as well as company-wide cost cuts to boost its business.
"Lyft may struggle to gain the share that Uber has, but the market essentially requires a second competitor to maintain pricing balance," said Mike Ramsey, a transportation analyst at Gartner.
On Wednesday, CEO David Risher announced Price Lock, a subscription-based feature that offers commuters on fixed routes a capped fare.
Lyft forecast gross bookings - the total value of transactions on the Lyft app excluding tips - between $4.0 billion and $4.1 billion in the three months ending September, a period of high tourism-related travel.
Analysts were $4.13 billion, according to estimates from LSEG.
