If you want to find an industry that reflects the dynamics of the epidemic the most, then travel must be on the list. As of the close of U.S. stocks on February 10, Uber and Lyft have announced their fourth quarter 2021 financial reports.
The clearest point of information is that the role of the epidemic in subsiding is emerging. Uber and Lyft's main performance indicators both exceeded Wall Street expectations. Among them, Lyft's adjusted EBITDA achieved annual profit for the first time, and Uber achieved adjusted EBITDA profitability for two consecutive quarters.
Under the general trend, Uber and Lyft's long-term strategies are becoming more and more clear, such as Uber's support for new businesses and Lyft's love of software. Perhaps, this will be a milestone for the two sides to continue to diverge.
The impact of the epidemic continued to fade, and Uber and Lyft both turned around
Uber and Lyft are emerging from the pandemic: In the fourth quarter of last year, in the three months ended December 31, 2021, Uber achieved revenue of $5.78 billion, exceeding market expectations of $5.35 billion. Lyft achieved revenue of $970 million, exceeding market expectations of $940 million. Obviously, after Uber's current business includes travel, distribution and other sectors, Lyft is already only a competitor of its business map.
The comprehensive recovery has benefited from the fact that people have begun to resume outdoor activities, and the supply and demand for travel are increasing. In Q4, Uber's total mobile bookings grew 67 percent, and the total number of active business people worldwide, including drivers and couriers, reached 4.4 million, the largest since Q2 2020, but still below the pre-pandemic level of 5 million.
The number of active drivers at Lyft grew 34 percent from the fourth quarter of last year, with new drivers up 50 percent year-over-year. Of course, this does not take into account that Uber's delivery business is also picking up, while Lyft's bicycles and scooters are affected by seasonal factors, and active riders are down 1% month-on-month - the weather environment is poor in winter.
In addition, the Opichron outbreak that began in December has had a new impact on both Uber and Lyft, but due to the resilience shown by both, the stock prices of both sides rose by 5.75% and 1.48% respectively after hours on February 10, Beijing time. This could also reflect optimism about a turnaround in the macro situation, as both Uber and Lyft's first-quarter guidance was actually lower than expected. The former expects total orders to reach $26 billion in the first quarter, down from analysts' estimates of $27.25 billion; the latter expects first-quarter revenue to be between $800 million and $850 million, compared with the market's general expectation of $990 million.
The rebound in scale has also helped both companies to move further in their profitability, with Lyft being more representative in this regard. While it still lost $259 million in Q4, its loss margin narrowed sharply to 26.7 percent from 80.4 percent in the year-ago quarter and achieved a full-year adjusted EBITDA profit for the first time. Adjusted EBITDA was $92.9 million, compared to a loss of $755 million for the same period last year. Lyft CEO Logan Green said, "This is a key milestone for our business." "The key to a rebound in demand is time, not possibility," he says.
In contrast, Uber's performance is more mature, but it will not be a key point like Lyft. Uber achieved a adjusted EBITDA of $86 million in the fourth quarter, beating expectations of $67 million, the second consecutive quarter of its adjusted EBITDA earnings. Uber also made a fortune: Uber achieved a net profit of $892 million in the quarter as its southeast Asian mobility company Grab and North American self-driving company Aurora went public in the fourth quarter.
This is the second time in more than a decade since Uber's founding that it has announced a revised EBITDA, which Uber pointed out can reflect that the company's business is gradually moving towards profitability, and Lyft has a similar opinion. In fact, the two mobility giants are very optimistic about the future, Uber CEO Dara Khosrowshahi said on a conference call: "Uber is coming out of the pandemic and is more powerful than ever. "And the profitability of both sides shows that as the epidemic continues to subside, the inflection point of real profitability is close." When it comes to this prospect, Lyft's strategic abandonment and Uber's strategic expansion must have a place.
Lyft shrugged off the R&D burden, but Uber's growth business was even brighter
A large part of Lyft's narrowing loss in the fourth quarter came from cost containment, in which R&D expenses as a percentage of revenue fell from 23% in the same period last year to 10% in the fourth quarter, as Lyft closed its own autonomous driving division since the third quarter. In April 2021, Lyft announced that its L5-level autonomous driving division would be sold to a Subsidiary of Toyota. Of course, Uber's abandonment of autonomous driving is even earlier, and because of its "deep financial resources", Uber sold its autonomous driving business to Aurora in 2020 and also took a stake in it, laying the groundwork for Q4's profits.
This actually shows that there is a clear difference in the grasp of the business progress between the two sides, although Lyft eventually got rid of the hot potato, but the rapid action of Uber has made it have completed a transformation. Elaine Paul, CFO of Lyft, said: "We will build a bigger company by seizing the immediate market opportunities. Sadly, Uber is already explaining what a bigger company is.
In Q4 2021, a key point of Uber's business was that the food delivery unit Uber Eats was profitable for the first time. Moreover, according to the business type, the order amount of Uber's online ride-hailing business, the order amount of the takeaway business and the order amount of the freight business were 11.34 billion US dollars, 13.44 billion US dollars and 1.08 billion US dollars, respectively; the corresponding revenue was 2.278 billion US dollars, 2.42 billion US dollars and 1.08 billion US dollars, respectively. Uber's takeaway business revenue has surpassed the core ride-hailing business, it is no longer the same as Lyft to bear the same epidemic impact concerns, diversification has brought better resilience to pressure.
Uber Eats' revenue in Q3 2021 was $2.238 billion, compared to $1.28 billion for U.S. food delivery leader Doomdash in the same period (the fourth quarter has not yet been announced). Considering that Uber's food delivery business is a global cumulative, and Doordash is still concentrated in the United States, the overall valuation of Uber Eats cannot be compared with The leader treatment of Doordash. But as Uber continues to expand along its current trajectory, it may become more and more like the "American version of Meituan" and the Self-Invested Grab. The overall market position is also expected to become stronger and stronger.
Choice is fate, the gap between Uber and Lyft is deepening, which has been brewing since the beginning of the epidemic, Uber's response strategy has begun to brew, and the two sides are no longer "all the way".
Lyft is not without action, it chose Olo as its partner, the latter is the merchant order system SaaS service provider. With this, Lyft wants to expand in terms of takeaway, but Lyft emphasizes that its route is B2B and will not compete with the existing consumer takeaway market. However, Uber, Doordash, and Grab are also Olo's partners, and Lyft needs to face special challenges even if it focuses on the B side. In the progress of the main business, Lyft also prefers to reduce costs and increase efficiency, but Uber is planning a more ambitious transformation.
Uber plus B-side, Lyft research software, whose long-term strategy is more "tempting"?
"In the coming years, U4B's enterprise offerings will significantly outpace our consumer business and become a significant contributor to growth and profitability."
When Uber CEO Dara Khosrowshahi uttered the words on a conference call, Uber Freight (Uber's digital freight logistics business, the equivalent of Uber in freight) completed its acquisition of Transplace in the fourth quarter – a plan announced in July 2021 by combining Freight's digital freight brokerage technology with Transplace's managed shipping platform, Uber has significantly expanded its freight size and product range.
At the same time, Uber for Business's total order volume has reached its highest level since 2019, which shows that Uber has made great strides in B-side freight. Although in terms of revenue, it is temporarily inferior to takeaway and ride-hailing, but given the global capacity shortage and other issues, the opportunities that Uber sees are still accurate. There are also Sennder, DAT, and Convoy, backed by Bill Gates and Bezos, on the track.
Uber also needs such new growth points to alleviate concerns about the saturation of ride-hailing development: Youssef Squali, an analyst at Truist Securities in charge of Uber, wrote in a note to customers that "Uber's revenue growth is driven by pricing, not sales. In fact, Uber's total quarterly trips grew 23 percent year-over-year to 1.77 billion, down from analysts' expectations of 1.87 billion, but ride rates fell 160 basis points year-over-year. This may have been the effect of Omicron, but Uber has learned to think of danger in peace.
In contrast, Lyft's focus is on the optimization of services such as feeding maps through travel data to better travel, and the final foothold is cost optimization in addition to automatic driving. Lyft launched the Lyft map and is also working with Google to offer the Lyft app and proprietary mapping platform on car displays equipped with Android Auto.
In addition, in Miami, Lyft launched an autonomous ride-sharing service, with Ford's self-driving cars provided by Argo's self-driving system that can be dispatched and matched to Lyft passengers. This is the first time a self-driving car has been used for ride-sharing in Miami — but co-founder John Zimmer notes that the partnership could remain around 1,000 vehicles by 2026. In the fourth quarter of 2021, first-party rental bookings for Lyft Rentals' car rental business doubled from the previous year. And, of course, there are bicycles, and the Lyft's ride volume in 2021 is more than 40% higher than in 2020.
However, Lyft's strategy shows a clear linearity, for which traffic is traffic, and completing a more complex traffic layout seems attractive. However, Uber is very divergent, hoping to apply its transportation, data and other capabilities to related industries. Lyft's imagination of autonomous driving is a big gamble, because there are too many uncertainties in autonomous driving itself. And Uber also has a fighting spirit, at least its takeaway and freight businesses are facing strong competition.
In a sea of red, it is difficult to determine which kind of thinking will dominate in the long term. But from the data point of view, Uber's fault tolerance is obviously stronger and more aggressive. This may be predestined, but it is also related to some key decisions before and after the epidemic. Perhaps, this is an explanation for corporate dna. When a company is more willing to take on a pioneering challenge, it will change significantly relative to its competitors, whether successful or not. Beyond the traditional travel story of both moving toward profitability, Uber is getting closer to becoming a winner.