Uber and Lyft Hit Record Lows: What Drivers Could Expect

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When I opened my investment app today, I was not surprised in the least to see both Uber and Lyft continue to fall in value. Why? Because they’ve been in a freefall. Whether or not this is because of the trade war with China or investor confidence, Uber and Lyft continue to lose value.

After the markets closed on Tuesday, Uber and Lyft both fell to new lows. Uber closed down 5.7% to $30.70, a deep dive below the previous mark of $32.57 in August. Lyft closed down 7.2% to $45.42, a steep plunge below the low of $48.15 in May.

What Does This Mean for Uber and Lyft?

The bottom line is that Uber and Lyft are suffering from the trade war, much like many other stock options. However, the real issue here is that investors remain gun shy with both rideshare companies. Why? Because neither company has given any indication that they will post profits anytime soon.

The Rough Ride from I.P.O.

Neither company has had the success they wished since their respective I.P.O. In fact, it has been a rough ride, with a ton of ups and downs.

Uber Fare Rider NYC

Recent losses posted by Uber, including a loss of $5.2 billion in the second quarter have only exacerbated the problem. Lyft managed to lose $644 million, but it didn’t seem to make a difference as they both continue to fall.

New Laws and Regulations might hurt Uber and Lyft More

We’ve covered several of the new laws, fees, and regulations that are taking place in major metropolitan areas here on Uber Driver Things. It seems as though both Uber and Lyft could stand to lose even more value if these laws hit the books either this year or the next. One, in particular, is the California Assembly Bill. Keep an eye out on the status of said bill and the corresponding effect on Uber and Lyft stock value.

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Uber and Lyft Leadership say, “It’s not a concern.”

Both of the leadership teams for Uber and Lyft have tried to allay investor fears by stating that the recent loses are aberrations. Lyft claims that they believe their peak loses are behind them as of last year.

Uber CEO Dara Khosrowshahi
Uber CEO Dara Khosrowshahi | https://www.uber.com/newsroom/leadership/dara-khosrowshahi/

Uber’s CEO Dara Khosrowshahi claimed that the recent second-quarter loses were a “once in a lifetime hit.”

What does it mean for Rideshare Drivers?

If both of these companies continue to lose value, there could be sharp and sudden changes in policy. That could amount to a rate rise and fare cut. The most likely action to be taken is a rate rise, as Lyft has already alluded to this tactic being the way to profitability. Keep your eyes peeled, and while the stocks are low, I suggest buying in.

 

 

 

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