Heading into earnings season, you might have expected Uber and Lyft to suffer.
After all, global travel slowed toward the end of Q1, so how could these companies have done well? Continuing the same line of thinking, given that they are both unprofitable and are valued more on growth than trailing earnings, with growth slowing would there be much to celebrate?
The answer was a resounding “yes.” Uber and Lyft both rallied toward the end of last week following their successive earnings reports.
Today, let’s go back and remind ourselves how Uber and Lyft performed against Q1 expectations and what they said about the hits they took in March (Q1) and early April (Q2). Then we’ll ask ourselves why their shares rallied despite telling investors that their businesses had begun to fall sharply in the COVID-19 world.
Self-driving cars are a shared ambition among Google, Tesla, Apple, Uber and Lyft, among other automotive, tech and ridesharing companies. For Uber and Lyft specifically, it’s a matter of cutting costs. However, fiscal expediency is not the main benefit of this emerging technology. Roughly 94 percent of traffic accidents are caused by human error, and to many, autonomous vehicles (AVs) seem to be our only path toward lessening related fatalities. In addition, driverless cars have other benefits, such as lower fuel consumption, lower CO2 emissions and a reduction in congestion. Here are the main ways they stand to change our lives and carve out a lane in the consumer marketplace, as well as the challenges this fledgling sector will need to overcome.
The question of how self-driving cars will interact and communicate with humans is one that has come up before, but the answer is still up in the air. Google has been looking into this at least since 2012, and earlier this year, Uber filed a patent for using flashing lights and sounds to talk to pedestrians. Now, the United States Patent Office has granted Lyft with a patent for what it describes as an autonomous vehicle notification system.
Lyft’s solution entails developing a predetermined message to display on the most visible car window. In one example, each window includes a projector, a see-through screen or another display device to communicate the message.
Lyft’s app has surged in the App Store thanks to the “Delete Uber” campaign which took place via social media over the weekend. People were angry that Uber appeared to be taking advantage of a taxi strike at JFK in order to promote its car-hailing service. The company had tweeted that surge pricing at JFK had been switched off, shortly after the NY Taxi Workers Alliance called for a stop on pickups at the airport in response to what they said was the “inhumane, unconstitutional ban of Muslim refugees and travelers.”
The Taxi Workers Alliance had asked all drivers, Uber included, to not pick up at JFK on Saturday, January 28th from 6 PM to 7 PM as a means of protesting Trump’s immigration and refugee ban.
“We cannot be silent. We go to work to welcome people to a land that once welcomed us,” the taxi union had written on Twitter.
THE CLASH OVER classifying Uber drivers as independent contractors versus bona fide employees is the signature controversy of the on-demand economy. According to Uber, Lyft, and other on-demand driver companies, the independent contractor model offers the promise of a bright and flexible future in which each worker is a micro-entrepreneur—choosing her own hours and acting as her own boss. The problem, according to Uber detractors: these workers don’t receive benefits. And they can’t unionize.