Our Uber vs. Lyft Q2 scorecard

Monday, August 12, 2019 by Robinhood Snacks | Disclosures

Two ride-share apps figuring out how to make money

Last Week’s Market Moves
Dow Jones
26,287 (-0.75%)
S&P 500
2,918 (-0.48%)
7,959 (-0.56%)
$11,405 (+1.15%)
10-Yr US Treasury

Hey Snackers,

We've reached peak rosé season: rosé strawberries, rosé beer, rosé vinegar. Rosé bubble?

Markets had their worst day of the year Monday — trade war drama saw China devalue its currency as a counter to upcoming US tariffs. But the currency war chilled out and stocks spent most of last week recovering from Monday's losses.

1. Who's up...

Makeover... Weight Watchers officially changed its name (hello, "WW") and rebranded itself from a weight loss to a wellness company late last year. And it's working. Shares surged nearly 50% last week after it announced the highest number of members ever for a 2nd quarter: 4.6M. Now it's got board member (and shareholder) Oprah pushing its new "wellness" look.

It's a keeper... Match stock jumped 20% last week, but that's all thanks to its better half, Tinder. The number of users on the dating app last quarter surged 40% from the year before. Powering the Tinder love are its aggressive new premium features you pay up for: Tinder Gold lets you see if your match read your message, and Super Boost lets you algorithmically/intensely promote yourself.

Shack burgers on your couch... can become part of your new weekday routine. Shake Shack jumped nearly 20% after its earnings revealed global expansion plans are on track ("fries with that, Singapore?"). But the highlight was a new partnership — after years of being a delivery holdout (soggy burger buns and cold beef scare the CEO), Shake Shack's finally partnering with GrubHub for nationwide delivery.


What would Tinkerbell do?... Disney just announced record high quarterly revenues of $20B. That's mainly thanks to Avengers: Endgame crushing box office records. But profits plunged 51% because Disney treated itself to 2 major acquisitions: Mickey bought Fox and most of Hulu as it preps its own streaming service, Disney+, for a November launch.

Four-letter verb for "drop"... Shares of The New York Times fell as the number of new paying subscribers missed analysts' expectations. The paper's got 4.7M paying for its news, crosswords, and cooking apps, but wants 10M by 2025. So it's hired more journalists to up its content — 1,750 total are on staff, the most it's ever had.

Despite aggressive ketchup usage... Kraft Heinz has a problem. Last February, it had to write-down the value of its processed food brands by $15B because they clearly aren't as valuable as they used to be. Then last week, it devalued your diner's go-to labels by another $1.2B. Velveeta, A-1 steak sauce, and mac-n-cheese sales are all lowering sales projections in an organic chia world.


Uber and Lyft should start side-hustle Ubering and Lyfting... The ride-hail pioneers announced earnings with 1 main theme: they're making huge losses. Uber lost a shocking $5.2B (but that's mostly caused by one-time IPO costs). Lyft's loss was a lot smaller at $644M, which makes sense because it's a much smaller company.

"Shareholders, how was your ride?"... Rough. Both stocks dropped by at least 5% Friday after experiencing both reports. Here are the Q2 scorecards for the 2 gig rivals:

  • Revenue (Point Uber 🖤): Uber brought in $3.2B of cash from April - June (even after drivers get paid) compared to Lyft's cute $868M.
  • Revenue growth (Point Lyft 💖): Lyft owns this. Uber is post-puberty, with revenues growing an all-time slow 14% last quarter. Lyft's voice is still changing, as revenues busted 72% higher.
  • Who takes a bigger cut of each fare (depends if you're a user or a shareholder): Both companies make this percentage hard to find. A recent report shows Uber takes 22% of each fare (leaving drivers with 78% of your post-Trader Joe's haul back home), and Lyft takes more at 26.8%.
  • Panic button (Point Uber 🖤): A Washington Post report last week highlighted several women who felt Lyft didn't handle their allegations of driver harassment well — and it requires several "clicks" in the app to report an emergency. Uber takes just 1 click.

Good news for shareholders — 2019 is "peak loss"... The Lyft CEO said that, but Uber investors hope it's true for them too. The idea is that this year Uber/Lyft must spend more than they ever have to grow — but they hope losses will begin to shrink and eventually flip to profits. The revenues vs. costs see-saw could start tipping in the right direction. And guess what — both companies are raising prices.

What else we’re Snackin’
  • Work: How to combat procrastination based on 6 personality types
  • Life: 19 science-backed tricks for reading body language (avoid awkward situations)
  • Money: Everything you need to know about "securities"
  • Venture: Your brand isn't an asset — think of it as an action
  • Crypto: Why Walmart applied for a cryptocurrency patent
  • Tech: A history of "easter eggs" and why they're hidden for hardcore fans in the apps, games, and devices you're using
Snacks Daily Podcast

Your Snacks Daily pod is off for a few days — we'll Snack with ya next week

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Disclosure: Authors of this Snacks own shares of Alibaba, Amazon, and Luckin Coffee


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