🚙 Lyft vs. Uber

Wednesday, May 4, 2022 by Robinhood Snacks |
Ride giants take diverging routes (Smith Collection/Gado/Getty Images)

Ride giants take diverging routes (Smith Collection/Gado/Getty Images)

Ride giants take diverging routes (Smith Collection/Gado/Getty Images)

Ride giants take diverging routes (Smith Collection/Gado/Getty Images)

Yesterday’s Market Moves
Dow Jones
33,129 (+0.20%)
S&P 500
4,175 (+0.48%)
Nasdaq
12,564 (+0.22%)
Bitcoin
$37,783 (-1.89%)

Hey Snackers,

May the 4th be with you: A Vegas chapel is celebrating Star Wars Day with themed-wedding packages (dubbed “Yoda One For Me” and “I Chewse You”). The intergalactic nuptials feature a Princess Leia officiant and space-inspired bouquets.

Stocks rose for the second day in a row on the back of positive earnings results from names like Airbnb and Exxon. Putting a damper on the markets: the Fed's next rate hike is happening today.

Taco

1. While Lyft stays focused on rides for growth, food and freight could shine in Uber’s earnings

15-inch AUX cord... 17-min ETA. America's #2 ride-hailer just rolled up with earnings. Lyft is known for its transportation focus (think: no food delivery) and cars with fuzzy pink mustaches (see: this Prius). We're checking in on its #s from a quarter of pricey gas, supercharged fares, and disappearing mask mandates:

  • Ride volumes reached a pandemic high as the rebound continued, helping revenue jump 44% from the year-ago quarter. Buuut…
  • Lyft stock plunged 27% in extended trading on word that active riders dropped by nearly 1M from the previous quarter, to 17.8M. Guidance was also uninspiring.

Uber Black, Lyft Pink… not a K-pop girl band. Lyft's bigger rival reports today. Lyft says it’s "singularly driven" by its mission to improve lives with transportation (cars, bikes, etc.). Meanwhile, Uber’s driving into everything, from food to ecomm deliveries. It’s no longer a ride-hail company.

  • Delivery (aka: Eats) made up about half of Uber's gross bookings last quarter, as taco-delivery habits stuck despite restaurant reopenings.
  • Ride bookings surged 67%, including niche-er offerings like Uber for Business (employee rides) and Uber Health (clinic rides).
  • Uber Freight, which connects semitruck drivers with high-volume loads (think: Heineken kegs), more than tripled revenue, to over $1B.
  • Cabs?... In March, NYC agreed to list all its yellow cabs on the Uber app, which gives the company a massive new fleet.
THE TAKEAWAY

The OG isn't always the growth key… Uber's core biz was ride hail. Now delivery is bringing in nearly half of sales, and freight is its fastest-growing biz. While Lyft is also enjoying the ride rebound, it doesn't have those diversified growth avenues. That could be why Uber's annual revenue is 5X as big as Lyft's. But they have this in common: Uber and Lyft lost hundreds of millions of dollars last year, and both stocks are down ~30% this year.

Couch

Two-minute bathroom break… TV commercials are back in style. This week, ad-supported streaming platform Tubi said it had doubled its active viewers since 2020, and planned to launch 100 original shows and movies this year. Meanwhile, Netflix, the world’s most popular subscription streamer, is struggling with its slowest growth in years.

  • The price is right: Unlike Netflix, which starts at $10/month, Fox-owned Tubi is free with ads. It’s available on smart TVs and devices like Roku.
  • Quantity over quality: Tubi has the largest catalog of on-demand streaming content: 20K old movies and shows. Think: no Marvel flicks (those are on Disney+) but both the 1943 and the 1966 versions of “Batman.”

Streaming is changing FAST… Blame #subscripturation. As viewers get sick of paying $38/month to watch “Euphoria,” “Bridgerton,” “Severance,” and “Loki” on four different platforms, some cord-cutters are now becoming subscription-slashers: last quarter, Netflix reported its first loss of subs since 2011. Meanwhile, free ad-supported streaming TV (FAST) options are growing:

  • Not just Tubi: Ad-powered streamers Freevee (owned by Amazon), Pluto (owned by Paramount), and the Roku Channel have 50M+ active viewers apiece.
  • Ads = not just a fad: By the end of the year, ad-supported streaming is expected to have more viewers than subscription-based streaming.
THE TAKEAWAY

Ad streaming has something for everyone… Consumers love the price, advertisers love the targetability, and OG media companies like Fox love the back door into the streaming race. Subscripturation could drive viewers from pricey subscriptions to ad-filled alternatives. That may mean more competition for the Tubis of the world: Disney+ plans to launch an ad-supported tier this year and Netflix is considering doing the same.

What else we’re Snackin’

  • Strife: The Supreme Court confirmed a leaked draft opinion overturning Roe v. Wade was authentic, but said it hadn’t reached a final ruling. Apple, Amazon, and others are offering financial support to employees seeking reproductive healthcare.
  • Notice: US job openings hit a record 11.5M in March, showing continued tightness in the labor market. At the same time, another 4.5M Americans quit their jobs, seeking more flexibility and higher pay.
  • Mute: Meta is pulling the plug on its podcast biz less than a year after its splashy debut. The Facebook parent says it plans to focus on bigger initiatives like its metaverse and TikTok clone, Reels.
  • Dose: Pfizer had a strong quarter, fueled by $15B in sales from its Covid vax and antiviral pill, Paxlovid. But the pharma giant cut its profit outlook for the rest of the year as R&D costs picked up.
  • Brew: Starbucks posted steamy earnings on a 12% increase in same-store sales at its US coffeeshops. But in China sales dropped 20%+ as the country’s zero-Covid policy keeps coffee-craving residents on lockdown.

Snack Fact of the Day

Over the past decade, electricity generated from coal in the US has fallen by ~60%

Wednesday

  • Fed interest-rate decision
  • Earnings expected from Match Group, CVS, Regeneron, Uber, Marriott, Moderna, eBay, Fox Corp., Etsy, GoDaddy, and The New York Times Co.

Authors of this Snacks own shares of Uber, Moderna, NYT, Apple, Amazon, Netflix, Starbucks, Match, Pfizer, and Disney

ID: 2184575