Shadow of Pandemic Persists for Rideshare Companies

As it did for so many business sectors, the post COVID-19 recovery for ride-hailing apps hit the brakes as Omicron accelerated across the world. To that end, industry giant Lyft (LYFT) reported weaker-than-expected revenue forecasts for the first quarter. Executives cited Omicron’s enduring impact, saying it could continue through the year’s midway point.

With that said, Lyft also reported more rides were booked during the last week of January. Fellow ride-sharing titan Uber (UBER) also said total bookings are on the rebound following a late December slowdown. During the fourth quarter, Uber’s active customers grew by 8%, while Lyft’s total base shrank by around 1%.

Uber Rides Return, Food Delivery a Boost

Uber’s increased number of rides booked and robust demand for food delivery helped revenue climb by 83% during its most recent quarter. This beat analyst expectations and partially contributed to the stock’s rise in midweek trading. Despite more restaurants opening back up, Uber Eats bookings jumped by 34%.

The ride-hailing app’s bread and butter remains ride bookings, and those rose by 67% year-over-year in Q4 2021. At the quarter’s end, Uber reported 118 million active users — a company record. That compares to Lyft’s most recently reported 18.73 million active users.

Lyft’s Revenues Soar Despite Fewer Riders

Although its active user count fell short of analyst expectations, Lyft posted a 70% increase in revenue for its most recent quarter. Executives say higher fares and customers taking longer trips offset the dip in ridership. They also believe the company emerged from the pandemic in a stronger position.

The company has focused on cutting costs and sold off its self-driving unit last year to Toyota as it failed to turn a profit. Executives have also stood behind their more singular focus on transportation, as opposed to Uber’s more diversified approach that includes food delivery. Each ride-hailing app is seeing riders return more quickly than drivers, something that benefitted Lyft in Q4 2021 as it raised the prices of rides on average. Barring any other variants of COVID-19, the ride-hailing industry may well keep pace with the post-pandemic recovery going forward.

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