Analyst on why Lyft is in 'a tough spot' compared to Uber and DoorDash

Michael Morton, SVB MoffettNathanson Sr. Research Analyst, discusses Outperform calls on Uber and DoorDash.

You can see the entire interview here.

Key Video Takeaways

00:18 On Lyft's business

00:30 On Uber & DoorDash's businesses

00:48 On Lyft's struggle to get drivers

00:57 On Lyft's analyst rating

Video Transcript

MICHAEL MORTON: Uber did an incredible job of building a scaled network that creates a network effect on both the supply and the demand side, and there's some crossover around people delivering food and being Uber drivers for regular fares.

Lyft is focused just on the US, and there are aspects of this business where you benefit from scale and network. If you look about the advertising and marketing dollars that you have to spend as just a percentage of your bookings, Uber and DoorDash get a greater benefit as they get larger and the advertising intensity declines.

Now as you have more people downloading an Uber app than a Lyft app, it's harder to recruit drivers. This goes back to that unemployment question and driver supply. Lyft has to keep spending money to convince drivers to work for Lyft and pick up fares, and it's a scale game. They're just in a tough spot.

We're market perform. We're not overly negative on it, but we're taking just a balanced approach towards Lyft. We want to see more proof in the numbers before we can get too excited that they're able to get out of this tough predicament that they're in at the moment.