Why Uber could be a better bet than Lyft

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Lyft (LYFT) was perhaps the first major technology IPO in 2019, but five analysts surveyed by Yahoo Finance indicate that its rival Uber could be a better investment when the company goes public later this year. "data-reactid =" 31 "> LYFT) may have been the first major technology IPO in 2019, but five analysts with whom Yahoo Finance spoke indicate that its rival Uber could be a better investment when the company goes public later this year.

"Even if the Lyft IPO had been a disaster, it would not necessarily be obvious to Uber simply because they are fundamentally different companies," says Alejandro Ortiz, a research analyst at SharesPost, a private equity trading market. San Francisco.

Lyft's share price, which has stabilized for the moment, closed Friday at $ 74 – $ 2 more than the value Lyft gave to its share price on its stock market listing. March 29th. But even if it was not the case, comparing Lyft to Uber could be a bit of an apple-oranges comparison. If Lyft is available in hundreds of cities in North America, for example, Uber's reach spans five continents, illustrating its more global ambitions.

A more diversified company

Uber has also been more ambitious in its expansion beyond just running.

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"There are a lot of other pieces in the Uber business – it's not a pure North American carpool game, like Lyft's," says D.A. Davidson, Senior Research Analyst, Tom White.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Uber now considers his food delivery service, Uber Eats Uber Eats' revenue during the fourth quarter, Uber Eats could account for 17% of Uber's total business in the third quarter. $ 1 billion year, according to & nbsp;Forbes, which made back calculations by taking Uber's internal earnings forecast for Uber Eats by $ 10 billion and taking into account Uber's typical 30 percent reduction and delivery costs. If so, it would make Uber Eats the second largest food delivery service in the United States behind Grubhub (WORM). "data-reactid =" 57 "> Uber now considers its food delivery service, Uber Eats, to be part of its core business If Uber has not disclosed the amount of revenue generated by Uber Eats during the Fourth quarter, the Uber Eats sector accounted for could generate a $ 1 billion business figure this year, according to Forbes, which has performed a back calculation by taking the internal revenue forecasts of $ 1 billion. Uber for Uber Eats of $ 10 billion and up .In taking into account Uber's usual 30% cutting and delivery costs, which would make Uber Eats the second largest food delivery service in the United States behind Grubhub (GRUB).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In 2017, Uber also launched Uber Freight, a Application-based service that matches truckers with companies that need freight across the US Uber did not accurately reveal its performance, but the company plans to go international with Uber Freight, & nbsp;first launch& nbsp; in the Netherlands next month. "data-reactid =" 58 "> In 2017, Uber also launched Uber Freight, an application-based service that matches truckers with companies that need freight across the United States. did not reveal how Uber Freight is performing, but the company plans to move internationally with Uber Freight, for a first launch in the Netherlands next month.

Analysts argue that such efforts will ensure that Uber's proposal to investors will be fundamentally different in April, when the company should embark on its road show to meet potential investors.

"From a purely economic point of view, diversification is generally associated with lower overall risk," adds Ortiz, research analyst at SharesPost Research. "That being said, Uber's only story has shown that aggressive expansion, especially with new technologies, meant that risks had to be mitigated on several fronts. When the time comes for its presentation tour, Uber will have to convince investors that trying to be "all for all in the world of mobility" is worth the risk of potential pitfalls along the way.

International obstacles

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Ali Mogharabi, Senior Equity Analyst at Morningstar, agrees that Uber still has some work to do as it continues to expand internationally, to resolve and resolve potential regulatory and cultural issues along the way. Last month, for example, Uber agreed to pay 2 , $ 6 million in the Netherlands for & nbsp;violation of local taxi law& nbsp; and operating an unlicensed taxi service between 2014 and 2015. "data-reactid =" 62 "> Ali Mogharabi, Senior Equity Analyst at Morningstar, agrees that Uber still has some work to do as it continues to grow For example, last month, Uber agreed to pay $ 2.6 million to the Netherlands for violating local taxi laws and operating an unlicensed taxi service between 2014 and 2006. 2015.

"The way I see things because Uber is using its platform for additional services, possibly creating more economies of scale in the future," says Mogharabi. "I mean Uber also uses this platform for Uber Eats. So, in terms of economies of scale, you might see that they have an advantage in this regard, and this could be taken into account when pricing IPOs. This could actually increase the confidence that the business will become profitable in the future. "

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