Lyft's call last night was disappointing in 4 ways. First, while Uber feels a sense of urgency and has moved up its profitability target AND put out a 25% EBITDA target, Lyft did none of this. It's still sticking to its Q4 2021 profitability target.
Second, Uber pointed out that its EBITDA flow-thru rate was 80% (incremental EBITDA/incremental revenue) and that Dara is demanding just 55% from the team: 
Meanwhile, Lyft is delivering flow-thru rates of ~30% and their FY2020 guidance implies 22% which is...disappointing to say the least:
Is this because Lyft is subscale? Because of market mix? We don't know.
Third, Brian Roberts (CFO) gave a pretty evasive (and frankly, wrong) answer to this question by Ross Sandler from Barclays:
Third, Brian Roberts (CFO) gave a pretty evasive (and frankly, wrong) answer to this question by Ross Sandler from Barclays:
Lyft lost ~$100m in Q4 and Uber Rides made ~$100m in Q4, inclusive of overhead, but Brian kept arguing that Uber is hiding overhead, which doesn't seem to be the case:
Fourth, enough with patting yourselves on the back for "beating consensus" and "beating guidance." Obviously nobody cares. What we want to know is exactly what you mean by "path to profitability," which remains a vague term in definition and disappointing in timing.
All that said:
Uber is at 13.2x 2020 EBITDA (assuming 25% margins at maturity)
Lyft is at 12.7x 2020 EBITDA (assuming 20% margins at maturity)
Not demanding, again, assuming those %s are real, given the vast opportunity ahead of both companies.
Uber's premium looks justified.
Uber is at 13.2x 2020 EBITDA (assuming 25% margins at maturity)
Lyft is at 12.7x 2020 EBITDA (assuming 20% margins at maturity)
Not demanding, again, assuming those %s are real, given the vast opportunity ahead of both companies.
Uber's premium looks justified.
(Yes, I don't like EBITDA either, especially the "adjusted" kind, but we need some measuring sticks. Eventually we'll have to see how much of this gets converted into free cash flow!)
