This week is a battle royale for ride-hailing apps.
Lyft surprised analysts with a far wider first-quarter net loss Tuesday evening in its first earnings report since going public. Now, all eyes are on its larger competitor Uber as it prepares to make its market debut Friday.
As the two go head-to-head, D.A. Davidson senior research analyst Tom White sees a clear winner emerging over the next 12 months.
"Lyft is the momentum player in North America right now. They've been gaining share at the expense of Uber over the last two years," White said Tuesday on "Trading Nation."
Lyft has grown its market share to 39% from 22% in the U.S. since 2017, according to D.A. Davidson. The key to its expansion lies in its brand value, he said.
"We think the state of Uber's brand has been a big driver of that and Lyft's ability to sort of capitalize and sort of position themselves as a kindler, gentler Uber has resonated with consumers here in North America. Brands are something that investors get uncomfortable with, they're hard to value, but in Lyft's case we think that's been an important driver of the share gains," said White.
Still, Uber has its advantages over the longer term, he said.
"Uber certainly has the scale. Over a very long-term period, that could translate into a margin advantage and we think that's reasonable to expect but in the near term, their revenue trends are a lot less impressive — sharp slowdowns in revenue growth — and also their profitability trends are deteriorating as well," said White.
Uber expects $3 billion to $3.1 billion in sales for its first quarter ended in March. That marks an increase from $2.6 billion in the same quarter a year earlier, though flat compared with the three months to December.
"This market is probably going to be … not a winner take all, but a winner take most," said White. While Uber has the size and scale, its "capital is being deployed in a lot of places on a lot of fronts and we think Lyft has got sufficient capital to continue to grow the business here in North America."