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May 25, 2021, 9:59 a.m. EDT

Uber vs. Lyft — should you buy either stock now?

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By Michael Brush

With people on the move again, it’s time for investors to take a closer look at ride sharing, an increasingly popular way to get around.

“There’s pent-up demand to see family and friends. Offices, restaurants and bars are reopening. And even airports are seeing improved traffic,” Uber Technologies Inc. /zigman2/quotes/211348248/composite UBER -2.75% CEO Dara Khosrowshahi said earlier this month.

We already see this change in the numbers. Ride volumes at Uber and Lyft Inc. /zigman2/quotes/208999293/composite LYFT -2.50% grew each month in the first quarter, with March showing the steepest recovery, points out J.P. Morgan analyst Doug Anmuth.

“We expect there is still much more to come,” Lyft CEO Logan Green said earlier this month.

Besides reopening, both companies are plays on this big-picture trend: Less interest in car ownership, in favor of ride sharing. That’s because ride sharing “offers the appeal of more flexibility at a lower cost than traditional car ownership,” says Green.

Both Uber and Lyft will benefit. But let’s look at some key metrics to see which one may benefit more.

Key metrics

Relative size and sales growth

As economies reopen, both companies will show robust growth. But Uber seems to have an advantage. Uber sales are expected by analysts to grow 42% this year compared to last year, according to consensus estimates. Lyft is expected to increase sales by 33%.

Now let’s zoom out for a broader view, skipping over 2020 and next year, to compare 2019 to 2023. Anmuth at J.P. Morgan expects Uber sales to go up 104% to $132.7 billion in 2023 from $65 billion in 2019. Lyft sales will rise 50% to $5.4 billion in 2023 from 2019 sales of $3.6 billion, he predicts. Again, Uber seems to have the edge.

Next, the sales data show that Uber is much bigger. In fact, Uber is the largest on-demand ride-sharing provider in the world (outside of China). Analysts expect Uber to post $3.6 billion in sales for the second quarter, compared to $698 million at Lyft.

Size matters because of the network effect. As the number of drivers increases, the quality of service improves, which attracts more users, which attracts more drivers, and so forth. Uber’s size also means it has more user data, which is valuable as a tool for growing sales. This also helps it gain market share. Uber already has about 30% global market share and it will continue to gain share in the U.S. and globally, says Deutsche Bank analyst Lloyd Walmsley.

But there is plenty of room for both companies to grow because the ride-share market is worth about $452 billion in annual sales (ex-China), says Morningstar analyst Ali Mogharabi.

Cash and free cash flow

As the numbers above demonstrate, both companies are expected to see big improvement in cash flow this year and next. But Lyft will post a bigger swing, according to analyst estimates, and it will produce more cash flow per share next year. Lyft has the advantage in cash flow growth.

Both companies hold a lot of debt — $9.8 billion at Uber and $1 billion at Lyft. But they each have lots of ready cash as well, or $5.9 billion at Uber and $2.2 billion at Lyft. Cash and growing cash flow are important because they give the companies more freedom by reducing dependence on the capital markets.


Besides rides, Uber offers food delivery via Uber Eats and freight-shipping services for businesses. It’s also expanding into grocery, convenience store, and alcohol delivery, notes Anmuth. Uber has over 700,000 restaurant partners. Uber Eats accounts for 6% of gross bookings, and the company projects big growth over the next five years.

$ 43.46
-1.23 -2.75%
Volume: 22.08M
July 30, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$83.93 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 55.32
-1.42 -2.50%
Volume: 2.84M
July 30, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$18.69 billion
Rev. per Employee
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