Lyft (LYFT, Financial) surpassed Q4 EPS and revenue expectations, achieving record highs in rides and riders. However, shares are declining due to weak Gross Bookings and adjusted EBITDA guidance for Q1 2025. Despite healthy demand, LYFT is now in a price war with Uber (UBER, Financial), affecting key metrics negatively. CFO Erin Brewer noted that lower pricing began late in Q4 and continues into Q1 2025, leading to a forecasted Gross Bookings growth slowdown to 10-14% from 15% in Q4.

• Under CEO David Risher, LYFT focuses on reclaiming market share from UBER through product enhancements and new services. The company ended January with its highest market share since 2022, thanks to new offerings like Price Lock and Lyft SUV. LYFT claims its average ETAs were the fastest in the industry in Q4.
• UBER is countering by lowering ride prices, compelling LYFT to do the same. This price drop occurs during Q1, the slowest quarter, with fewer and less profitable rides. Additionally, LYFT is losing its partnership with Delta Air Lines (DAL, Financial) on April 7, which will reduce Gross Bookings growth by about 2 percentage points starting Q2 2025.
• Despite price declines and slower Gross Bookings growth, LYFT's Q1 adjusted EBITDA guidance of $90-$95 million aligns with expectations. The company's new offerings, which have higher margins, are well-received. LYFT has also maintained cost discipline, achieving over 100 basis points of fixed cost leverage in FY24, and a large driver base has kept incentives in check.

While LYFT delivered solid Q4 results, concerns about its guidance and the ongoing price war with UBER overshadowed its performance. Looking ahead, LYFT aims to become a significant player in the robotaxi market, planning to launch services in Atlanta this year and Dallas in 2026.