Uber / Lyft Ridehailing Growth Is Slowing In NYC
Summary
- Uber/Lyft/Via/Juno (Apps) in NYC had flat trip growth yoy in October, which continued a downward overall trip trend since March 2019.
- Yellow Taxi volume had an accelerated decline of ~20% yoy.
- An overall for-hire market trip decline may indicate the NYC consumer is hurting.
- NYC is Lyft's largest market and one of Uber's Top 5 markets.
- NYC top line growth likely now has to come from (i) pricing, (ii) take rates and/or (iii) market share gains (i.e. Juno Ch. 11) and/or traditional taxis.
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The New York City Taxi & Limousine Commission recently published Oct 2019 trip data for the for-hire transportation (FHV) industry. The headline is positive trip growth month-on-month in October vs. September for the Ridehailing Apps / Yellow Taxis.
HOWEVER, let's contextualize the data like-for-like now from years past and see what it's potentially telling us about how Uber/Lyft's growth story looks like in NYC (once again, and we mentioned this before, Lyft's largest/and likely most profitable market and one of Uber's largest markets).
It appears that growth expectations need to be tempered significantly - we are in flat growth right now with the total combined trip volume of Apps/Yellow in decline (-5% yoy). Uber/Lyft revenue growth in NYC, and perhaps other mature markets, we believe will now be driven by the following:
- price increases,
- higher take rates, and/or
- market share gains from competitors (i.e. Juno Ch. 11) and traditional taxis
The NYC ridehailing growth story, from a trip perspective at least, appears to have slowed significantly and we believe the Apps may experience negative yoy trip growth in the coming months. Separately, the TOTAL combined trip decline (Yellow + Apps) may indicate the NYC consumer is hurting (i.e. cutting trips with Uber/Lyft/Yellow Taxi in general).
We think this data is fairly interesting and also needs to be given importance considering NYC could be a bellwether for the North America ridehail story.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.