Shares of Lyft fell 5% Thursday, after new Wall Street research indicated the company is losing ground to Uber Technologies in the fiercely competitive ride-hailing business.
RBC analyst Brad Erickson wrote Thursday that his latest research suggests Uber (ticker: UBER) is getting its customers to destinations faster and at a lower cost. The service edge, is likely helping Uber gain market share from its largest U.S. rival, he wrote.
Erickson and his team analyzed “20 geographically distributed sample rides” in the 10 largest U.S. markets as a proxy for Uber and Lyft’s relative performance.
Overall, Erickson wrote that wait times for pickups have declined 38% since his last analysis in May, reflecting overall improvement in driver supply. But he also found that Uber is delivering riders to their destinations 13% faster on average than Lyft (LYFT), which compares to an 8% advantage in May.
“Our latest driver supply analysis indicates Uber has created an efficiency gap which is allowing it to price more aggressively while generating more bookings/hour due to faster trip-times and likely share gains,” Erickson wrote.
Uber’s average pricing is now 10% below Lyft’s, according to his analysis. That’s a flip from May, when Uber’s rides were 1% more expensive.
His latest survey also found that Uber’s bookings per hour were 3.4% ahead of Lyft’s.
In other words, according to Erickson, Uber riders are paying less for more efficient rides, while Uber drivers are getting more pickups.
Lyft did not respond to a request for comment about Erickson’s findings.
Erickson has Outperform ratings on both Uber and Lyft and notes that Lyft is driving toward sustainable profitability in 2022. But he adds that he has “incremental concerns that postpandemic, Uber’s more proactive investments in driver supply may be bearing fruit,” leading to some market share loss for Lyft.
Erickson kept his $65 target price on Uber shares, but trimmed his target on Lyft to $65, from $70.
Uber shares closed up 1.9% Thursday, to $47.28, while Lyft fell 5.1% to $50.51.