Recently, overseas ride hailing giants Uber and Lyft have released their Q2 2024 financial performance reports.
Both companies have performed well in terms of performance, exceeding market expectations. According to the financial report, Uber's adjusted EBITDA increased by 71% year-on-year, setting a quarterly GAAP revenue record; The number of active passengers on Lyft reached 23.7 million, a year-on-year increase of 10%, setting a new high in the company's history.
It is worth noting that the EBITDA of Uber's food delivery business was $590 million, nearly 5% higher than expected, which is the most impressive among all sectors, and the market's expectations for Uber's food delivery business are still high. The advertising business under this sector has considerable growth.
By studying the research reports of Uber and Lyft, it can be found that in addition to the original ride hailing business, keywords such as bicycles, skateboards, food delivery, and intelligent driving are also prevalent.
The competition among ride hailing platforms has transcended the ride hailing business, either expanding the market or deepening vertical cultivation, and new industry development directions are taking shape.
Continued growth
According to the financial report, Uber's revenue in the second quarter of 2024 was $10.7 billion, an increase of 15.9% compared to the same period last year's $9.23 billion. If the impact of exchange rate fluctuations is not included, the year-on-year growth is 17%. Higher than analysts' expectations of $10.57 billion.
Uber's business consists of shared mobility, food delivery, and freight services. Among them, the revenue from taxi services in the second quarter was 6.134 billion US dollars, an increase of 25.3% compared to the same period last year's 4.894 billion US dollars, mainly attributed to the increase in total travel bookings; The revenue from the food delivery business was 3.293 billion US dollars, an increase of 8% compared to the same period last year's 3.057 billion US dollars; The revenue from freight business was 1.273 billion US dollars, which was basically the same as the same period last year.
Overall, Uber has continued its growth trend from the previous quarter, with significant growth in its two core businesses, both of which exceeded market expectations.
In terms of orders, Uber's total orders for the second quarter were $40 billion, a year-on-year increase of 19%; The total amount of orders for ride hailing services was 20.6 billion US dollars, a year-on-year increase of 23%; The total amount of delivery service orders was $18.1 billion, a year-on-year increase of 16%.
Uber CEO Dara Khosrowshahi pointed out during the earnings call that Uber's user base grew by 14% this quarter, and the frequency of users using the service increased by 6.4%; Uber Eats' new user count reached its highest point in the past five quarters in the second quarter.
Uber's competitor in the ride hailing market, Lyft, also performed well in this quarter's financial report, reflecting the recovery trend of the shared mobility industry.
According to the financial report, Lyft's Q2 revenue increased by 41% year-on-year to $1.4 billion, slightly higher than analysts' consensus expectation of $1.39 billion; Achieved a net profit of $5 million, representing a significant financial improvement compared to a net loss of $114.3 million in the same period last year; Adjusted EBITDA is $102.9 million, which is twice as much as last year.
Meanwhile, Lyft's active passenger count reached 23.7 million, a year-on-year increase of 10%, setting a new historical high for the company.
However, Lyft's total bookings for the second quarter (excluding tips for ride hailing transactions) were $4.02 billion, falling to the bottom of the company's guidance range and falling short of investor expectations. Meanwhile, in the third quarter outlook, bookings for the next quarter are expected to reach $4 billion to $4.1 billion, which is also lower than analysts' expectations of $4.14 billion.
Although there were some areas that fell short of expectations, Erin Brewer, Chief Financial Officer of Lyft, stated that "the platform is developing in a very healthy way, as evidenced by strong cash flow generation and GAAP net income." Previously, Lyft released its financial target for 2027, expecting a compound annual growth rate of approximately 15% for total bookings from 2024 to 2027, and an adjusted Ebitda profit margin (calculated as a percentage of total bookings) of approximately 4% for the full year of 2027.
Faced with Lyft's continuous pursuit, Uber has adopted various strategies to maintain market competition, hoping to maintain its leading position and stand firm.
Uber accelerates its layout in the field of electric vehicles. Dara has called for accelerating the promotion of electric vehicles, stating that "Uber drivers switch to electric vehicles 5 times faster than regular drivers, and their driving distance is also 5 times that of regular drivers." In addition, Uber has set a goal of achieving zero emission vehicles in the United States, Canada, and Europe by 2030, and achieving 100% of global travel and transportation using zero emission vehicles, micro transportation, or public transportation by 2040.
In July, Uber announced a strategic partnership with BYD to introduce 100000 new BYD electric vehicles into the platform. In the future, both parties will cooperate to develop autonomous vehicle based on BYD and deploy them on the Uber platform. Previously, Uber had collaborated with companies such as Tesla, General Motors, Hertz Rent-a-Car, EVgo, Revel Transit, and others.
Uber's efforts in the field of autonomous driving are evident. In the financial report, Uber revealed that the number of trips of its autonomous vehicle had increased six times over the same period last year, and the focus of the call was also the autonomous driving business.
Dara pointed out that Uber has unique advantages in providing large-scale deployment technology for autonomous driving companies, such as supporting about 1 million trips per hour and a global average estimated arrival time of 4 minutes. He said: "Uber will become an indispensable partner of autonomous driving companies, and will announce more cooperation news in the future." Previously, Uber has cooperated with Waymo, a subsidiary of Alphabet, to provide ride services for autonomous vehicle.
Uber's cooperation with BYD also includes the deployment of BYD's autonomous vehicle on the Uber platform in the future.
Differentiated competition
At present, the North American market is approaching maturity, and both companies are beginning to seek new growth paths.
Uber started with its ride hailing business and has continuously expanded its diversified business. Nowadays, food delivery and ride hailing services have become its two core businesses.
In May of this year, Uber announced a series of measures aimed at attracting sensitive consumers in competition with Lyft. It has launched shuttle services in the United States, allowing users to book bus seats in crowded areas such as airports, concerts, and sports events in advance. At the same time, we will expand our delivery cooperation with membership based retailer Costco, providing additional discounts for Costco members who order through Uber Eats, and offering a long-term 20% discount on Uber One's annual plan.
Unlike Uber's positioning, Lyft focuses on the domestic shared mobility business in the United States. Lyft co-founder John Zimmer once said, "Lyft is a transportation focused company that wants to ensure its main core consumer group does not establish a consumer oriented grocery or food market
Last July, Lyft updated its latest developments in its bicycle and skateboard business, stating that it will explore various forms of strategic partnerships and alternative options to serve more riders in more cities, and noting that this part of the business will still be an important component of Lyft's current and future products.
At the same time, Lyft targets young users and collaborates with universities to provide exclusive discounts for students. The financial report shows that during the graduation season, the passenger usage of college students was 23% higher than the average weekend in the second quarter.
As competition intensifies, "cost reduction" has become an important strategy for platforms. However, in recent years, there have been frequent occurrences of two companies infringing on the rights and interests of drivers.
Qianji Investment Bank pointed out that in the future, regulatory policies and regulations will be further strengthened, including stricter regulations on passenger safety, driver service quality, and operational compliance, which will also guide the industry towards a more standardized and benign development direction.
Looking globally, the size of the ride hailing market has shown a rapid growth trend in the past few years.
Zhiyan Consulting pointed out that the global ride hailing market has experienced explosive growth since 2016. In 2019, the global ride hailing market size was about 74.58 billion US dollars. In 2020, due to the impact of the epidemic, the global ride hailing industry market size declined. In 2021, the global ride hailing industry market size began to recover. The Mordor Intelligence report predicts that the size of the ride hailing market will reach $194.98 billion by 2024 and is expected to reach $296.57 billion by 2029, with a compound annual growth rate of 8.75% during the forecast period (2024-2029).
After experiencing the platform start-up period, high subsidy war period, and cross-border emergence period, industry competition will further intensify. According to a report by Zhiyan Consulting, in the future, enterprises need to continuously improve their service quality and user experience in order to gain a larger market share and better development.