Ride-hailing companies Lyft Inc. and Uber Technologies Inc. are starting to give investors what they want, which is gradually showing up in their earnings results, but consumers are paying the price.
It may not be immediately obvious in the financial results of the two rivals over the past two days, but the price war between them appears to be gradually abating. Both companies showed higher-than-expected take rates, and both showed slight reductions in their hefty marketing expenses.
On Thursday, Uber UBER, -6.80% reported a whopping net loss of $5.2 billion for its second quarter, as a result of $3.9 billion in stock-based compensation expenses and another $298 million for driver-appreciation awards. But excluding those costs, on a non-GAAP basis, Uber’s adjusted loss of $656 million was slightly narrower than the $659 million expected by Wall Street, according to FactSet. Even so, Uber’s shares tumbled 6% after hours.
On Wednesday, Lyft LYFT, -4.80% had an even crazier roller-coaster ride after it beat on revenue, but told investors there would be more insider selling soon. Shares swung wildly, then stabilized in the extended session after the company acknowledged it had slightly raised its pricing and that its third-quarter guidance included “modest price adjustments” that went live in June. Lyft also cut its sales and marketing to 19% of revenue in the second quarter, down from 35% a year ago.