A Lyft Inc. executive believes fear of COVID-19 may be prompting people to rely on ride-hailing services instead of public transportation, but the chief executive of rival Uber Technologies Inc. highlighted a different — and more negative — dynamic Wednesday.
Lyft has seen no negative “demand impact” from the coronavirus panic, Chief Financial Officer Brian Roberts told investors at a KeyBanc Capital Markets conference Tuesday, revealing that Lyft LYFT, -2.85% logged its largest ever weekly revenue total last week.
“When you’re packed against people and you hear distant coughing, I think there’s nothing worse in terms of the human psyche right now,” Roberts said of attitudes toward public transportation as more people get diagnosed with COVID-19, the disease brought on by the novel coronavirus.
The company reaffirmed its revenue and earnings projections at a time when other technology companies, including those in the electronics space, have been trimming their forecasts. Lyft shares were up 9% in Wednesday trading.
Uber UBER, -1.64% CEO Dara Khosrowshahi did bring up negatives for ride-hailing demand while speaking at a Morgan Stanley conference Wednesday afternoon, however.
“The geographies where you have seen significant effects societally from corona account for about 1% of our bookings on a global basis,” he said. “So that’s certainly something that is there, but it’s not material for the company overall.”
Khosrowshahi also disclosed that “our airports business has slowed down a little bit relative to the balance of the business overall” as fear of the outbreak keeps business and leisure travelers at home. While airports represent about 15% of Uber’s gross bookings and carry a slightly higher margin profile than the rest of the business, the impact is “nothing that we can’t adjust to.”
He added that Uber Eats, the company’s food-delivery arm, might actually benefit from the prospect that more people may choose to remain in their homes to avoid contracting the virus. Uber shares were up 4% on the day.
A note from J.P. Morgan’s Doug Anmuth suggests both could be right, as the impact of the coronavirus on ride-hailing companies could become complex.
“On the positive side, we believe people would be more likely to use ride-share than a crowded bus or subway,” he wrote. “On the negative side, less travel could lead to fewer high-value airport rides and there could just be less business activity overall.”
Anmuth estimates that airport rides account for roughly 10% of Lyft’s overall business.
Lyft’s Tuesday commentary also drew attention over some potential hints about the future profit road map.
“Interestingly, when asked why the company left the 4Q21 profitability target unchanged at its February earnings call, Mr. Roberts highlighted that he is ‘truly confident’ in the original target date and consequently urged investors to ‘stay tuned’ noting that the company will report earnings on or around May 6th, perhaps hinting at a possible breakeven target pull forward come the 1Q print,” wrote Evercore ISI analyst Benjamin Black. He rates Lyft’s stock at outperform with an $81 target.
Uber’s commentary also veered away from the coronavirus, as Khosrowshahi talked up Uber’s focus on global reach and cross-selling customers on other business lines.
“We’ve got a P&L that’s just structurally more efficient than all of our competitors,” he said, referring to the company’s profit-and-loss statement.
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