Ticker LYFT

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Market closed
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Price US dollars
As of 11:04 21 Jul 2019
Market cap. US dollars
0.00 million
As of 11:04 21 Jul 2019

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How can a company be valued at billions, but not make any profit?
You can't have a company worth billions of dollars and not make a profit, right? Wrong, and here's why.

Rivalry with Lyft weighs on Uber

BBC Radio 5 Live

Uber sign
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Sales and user numbers at Uber rose strongly in the first quarter and yet the newly floated ride-sharing and food delivery app business still reported a $1bn loss.

Will those who bought shares in the flotation be regretting their decision?

Eimear Daly, chief economist at Macquarie Bank, tells Wake Up to Money that Uber's share price actually rose after the figures were released.

"What was clear from the results was the amount of strain Uber was under," she said.

"They basically pointed to Lyft, a domestic rivals in the US market, and said that because of that for riders and drivers, they had to throw incentives at them and they lost a lot of pricing pressure."

Apps off: Ride-share drivers on strike across the US
The drivers say the companies they work for, which include Uber and Lyft, have made it impossible to earn a living.

Lyft receives positive recommendations

Lyft car sticker on a taxi
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US ride hailing app firm Lyft has received positive recommendations from 14 banks on its stock.

Lyft began selling its shares to the public on the Nasdaq stock exchange on 29 March. However its share price has fallen by 30% since its opening price of $72, which gave it a market value of just over $24bn.

Analysts from 14 banks including JP Morgan recommended buying Lyft's stock, seven were "neutral" and one bank recommended selling.

Before Tuesday 23 April, only banks that had not worked on Lyft's initial public offering (IPO) were allowed to make recommendations about its stock, and these banks were decidedly more sceptical about Lyft's future.

However today the rest of the banks have been allowed to release their recommendations.

Lyft's shares are now up 0.7% to $61.38.