Shares of Uber and Lyft hit their lowest levels ever on Tuesday (Sept. 3).
CNBC reported that Uber closed down 5.7 percent to $30.70, falling below its previous low of $32.57 on Aug. 30. Lyft was down 7.2 percent to $45.42, compared to its previous low of $48.15 on May 13.
Both companies have struggled since their respective IPOs earlier this year, with both trading on Tuesday more than 30 percent below their IPO prices. For the second quarter of 2019, Uber reported a net loss of $5.24 billion, while Lyft lost $644.2 million.
Uber blamed its Q2 results on stock-based compensation costs. CEO Dara Khosrowshahi said the losses were “once-in-a-lifetime.” However, investors are still unsure whether the company, or ride-hailing services in general, can be profitable.
Early Uber investor Bradley Tusk said Uber needs to be more competitive.
“They’ve got to be that A-to-Z for transportation,” Tusk said last month. “Whether you’re getting yourself to A-to-B on a bike, scooter, or a car, bus, whether furniture being shipped on a truck, or a burrito from a messenger, they’ve got to be the default for all of that.”
In an Aug. 27 research note, however, Ronald Josey, an internet analyst at JMP Securities, said data from a recent survey found many riders don’t even compare prices between Uber and Lyft, “highlighting the inelasticity of demand,” CNBC reported. Josey has a Market Outperform rating on both companies.
“With fewer users price comparing between services as ride sharing services compete on brand and product, we believe pricing could continue to be rational,” he said.
Another cause of concern for the companies: A proposed California law that would force the companies to reclassify their drivers as employees could also hinder Uber and Lyft’s business models. The bill passed the California Assembly in May, and California Gov. Gavin Newsom voiced his support for the bill this week.