STORY: Shares of ride-hailing giants Uber and Lyft plunged on Wednesday, with Lyft dropping as much as 35% in early trading, a day after a disappointing earnings outlook in which it said it needed to spend more to attract drivers.
Uber shares fell more than 12% Wednesday morning after the company moved up the release of its results from the afternoon following Lyft's bleak earnings report to "provide a more timely update on the company’s performance and guidance before the market opens.”
Eager to set itself apart from its smaller rival, Uber said it had no need to boost incentives further to attract more drivers and forecast a strong second quarter, but Lyft's comments on higher driver pay pulled down Uber's stock anyway.
Analysts said investors were moving out of shares of unprofitable companies whose consumer-facing businesses could come under further pressure as inflation continues to rise.
Lyft said on Tuesday it would have to invest more heavily to balance supply and demand in the coming quarters, eating into its already slim operating earnings.
Meanwhile, Uber said it expected to generate "meaningful positive cash flows" for the full year, which would mark the first time it achieved that goal in the company's 13-year history.
Still, Uber reported a first-quarter loss that surged to nearly $6 billion from just over $100 million a year ago, driven by drops in the value of stakes in other, poorly performing companies, primarily Chinese ride-hailing company Didi Global.