Coronavirus impact: Uber and Lyft ride fares feel the sting of shelter in place
Ride-hailing companies Uber Technologies Inc. and Lyft Inc. are already feeling the pressure from the coronavirus pandemic as lockdowns and travel restrictions expand across the U.S.
A pricing tracker from Canaccord Genuity showed ride-share fares fell by around 6% month over month during the first three weeks of March.
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The prices had risen around 1.5% in February.
“The decline in March was broad based with all cities seeing prices fall between 4% and 11%," Canaccord analyst Michael Graham wrote in a note to clients. Los Angeles and Chicago were the most affected, while San Francisco and Boston were least affected.
“Effective prices were likely down due to a combination of weaker demand and less traffic leading to shorter duration trips," Graham said, adding that the tracker does not capture ride volumes.
Both Uber and Lyft have seen their share prices whiplashed amid the virus crisis, especially as broader perception about the outbreak kept shifting. While initially the stocks were resilient since people were only expected to avoid public transportation, the sell-off took hold as the situation worsened in the U.S. and people were discouraged from stepping out altogether.
Uber shares are now down about 35% since late February when the broader meltdown started. Lyft’s stock has fallen 37% over the same period, while the S&P 500 Index has dropped 25%.
Morgan Stanley analyst Brian Nowak reduced his estimates for 2020 Uber/Lyft ride bookings by about 35%. He now expects second-quarter bookings to decline by about 60% to 65% year over year, noting that people are increasingly in isolation or shut in.