Shares of Lyft are down sharply this morning, falling nearly 20% in early trading. The company’s equity is being sold in the wake of the US ride-hailing giant’s first-quarter results and its comments on the current quarter, and how its new strategic stance will affect its growth and economy in the coming quarters .
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In the wake of Lyft’s decision to remove the founders from day-to-day control, drastically reduce headcount, and bring on an outside CEO, the company is now a leaner organization under new management. While Lyft saw its valuation fall after it reported its results and updated strategic stance, Uber’s shares have risen sharply in the wake of its own earnings update.
It could be argued that Lyft waited too long to shake up its business, given its difficult comparison to Uber following both companies’ Q1 earnings reports. But Lyft is now taking a new course, which we need to understand.
While Uber and Lyft are among the best-known on-demand companies in the U.S. market, countless startups have tried to use similar models to build their own businesses over the past five years. So, as Uber and Lyft do, perhaps so do the surviving startups that tried to replicate their meteoric rise.
This Friday morning, we’re analyzing Lyft’s Q1 results and Q2 guidance, the latter of which we’ll place in the context of future strategic choices. Notably, there’s quite a bit of what Lyft does that fits neatly into other company choices we’ve seen recently. Many other tech and tech-enabled companies are trying to reduce their workforce, remove layers of management, and sharpen their product focus. From that perspective, Lyft is part of a larger trend. Let’s see how those choices fit into future product and pricing choices.
Lukewarm investor response clouds Lyft’s new strategy by Anna Heim, originally published on TechCrunch
