UBER vs. LYFT: Which Ride-Hailing Stock Has an Edge Now?

Uber Technologies  UBER  and Lyft (LYFT) are prominent players in the ride-hailing industry. Both companies have significantly transformed the transportation space with their innovative ride-sharing business models.

Uber, headquartered in San Francisco, has taken a broad diversification approach, expanding its presence worldwide. While ride-hailing remains its core business, Uber has branched out into food delivery and freight services, aiming for rapid growth across multiple areas. Lyft, also based in San Francisco, follows a more streamlined strategy by focusing mainly on ride-hailing within the United States.

Given this backdrop, let’s examine closely to find out which ride-hailing entity currently holds the edge, and more importantly, which might be the smarter investment now.

The Case for Uber

Uber holds a dominant position in the North American ride-hailing market. Beyond the United States, it has expanded operations into Canada, Latin America, Europe, the Middle East, and Asia (excluding China).

For large companies, diversification is key to mitigating risks, and Uber has excelled on this front. The company has pursued numerous acquisitions, product expansions, and geographic diversification while driving innovation. Its efforts to grow in international markets are noteworthy, providing the benefits of geographical balance. Strategic investments have enabled Uber to broaden its service portfolio and strengthen its overall business. It has diversified into food delivery through Uber Eats. Recently, Uber Eats and retailer Dollar General DG inked a partnership to deliver household essentials across the United States. As a result of the deal, more than 14,000 Dollar General and pOpshelf locations are being brought to the Uber Eats platform. Customers can use the Uber Eats app to order food, beverages and other essentials like personal care products, over-the-counter medications, among other items.

Under the partnership, which kicked off on Aug. 8, Uber Eats is offering 40% off on Dollar General and pOpshelf orders of $20 or more. The maximum discount amounts to $10. Uber also has a presence in freight services.

Both Uber’s ride-sharing and delivery platforms continue to gain popularity, fueling strong demand. Coupled with new growth initiatives and disciplined cost management, this momentum is supporting the company’s performance. In the second quarter of 2025, revenues from the delivery segment grew 23% year over year on a constant-currency basis. Gross bookings from the segment in the June quarter rose 20% year over year on a constant-currency basis to $21.7 billion.

Another positive factor is Uber’s buyback program. Recently, management announced a stock repurchase authorization of up to an additional $20 billion of common stock. With this bold initiative, UBER is not only enhancing shareholder value but also signaling confidence in its current business strategy. The latest shareholder-friendly announcement by Uber is in addition to the $7 billion authorization announced in 2024. We remind investors that the $7 billion share repurchase authorization was the first such program in the company's history. The accelerated $1.5 billion stock buyback program, a part of the $7 billion program, was completed in the first quarter of 2025. In 2024, Uber generated a record $6.9 billion in free cash flow, highlighting its financial bliss, with an adjusted EBITDA of $6.5 billion.

Looking forward, Uber is aiming to establish itself as a leader in the rapidly expanding robotaxi market by forming strategic partnerships. This collaborative approach allows the company to avoid the substantial R&D expenses that usually come with developing autonomous systems on its own.

The Case for LYFT

Lyft is benefiting from the increase in gross bookings. Gross bookings are improving mainly due to the growing active rider base, expansion into new markets and the success of the company’s customer-friendly "Price Lock" feature.

Recently, Lyft released its second-quarter 2025 earnings report. In the June quarter, gross bookings increased 12% year over year to $4.5 billion. This was the 17th consecutive quarter where Lyft demonstrated double-digit year-over-year growth in the key metric, demonstrating the resilience and momentum of the company’s customer-friendly strategy. For the third quarter of 2025, it expects gross bookings in the $4.65-$4.8 billion range, indicating 13-17% growth from the third-quarter 2024 actuals.  

LYFT’s move to focus on less densely populated markets, such as Indianapolis, is paying off. Its Price Lock feature is also doing well. With the return-to-office mode gaining steam, there is a surge in weekday demand for ride-hailing services. To compete more effectively with rivals in the ride-hailing arena, Lyft has introduced a Price Lock feature. This feature allows users to bypass surge pricing during peak commuting hours. By locking in a commute price, they can save money. LYFT, like Uber, aims to gain a stronghold in the highly promising robotaxi market through strategic partnerships.

Another area of confidence is LYFT’s buyback strategy. In a shareholder-friendly move, management announced earlier in the year an increase to its share repurchase program to $750 million from $500 million. In the second quarter of 2025, LYFT repurchased $200 million worth of stock. Strong cash flow generation allows it to remain committed to returning value to shareholders. LYFT’s cash flow generation stood at $993 million for the trailing 12 months at the end of the second quarter of 2025.

How Do Zacks Estimates Compare for Uber & Lyft?

The Zacks Consensus Estimate for Uber’s 2025 and 2026 sales implies a year-over-year increase of 16.8% and 15.6%, respectively. The consensus mark for Uber’s 2025 EPS highlights a 36.2% year-over-year drop. The 2026 EPS consensus mark reflects a 20.4% year-over-year increase. Moreover, while the EPS estimate for 2025 has increased marginally over the past 60 days, the same has been trending southward in the same timeframe.

The Zacks Consensus Estimate for Lyft’s 2025 and 2026 sales implies a year-over-year increase of 13.5% and 14.2%, respectively. The consensus mark for Lyft’s 2025 and 2026 EPS highlights a 21.2% and 20% year-over-year increase, respectively. Moreover, the EPS estimates for 2025 and 2026 have been trending northward over the past 60 days.

LYFT’s Recent Price Performance Better Than Uber

Of late, Lyft has been having a better run than Uber on the bourse. Over the past month, the LYFT stock, unlike Uber, has appreciated in double digits.

1-Month Price Comparison

Lyft More Attractive than Uber on Valuation Front

Lyft is trading at a forward sales multiple of 0.97X, whereas UBER’s forward sales multiple sits at 3.51X. Uber has a Value Score of D, whereas Lyft has a Value Score of B..

Conclusion

Both Uber and Lyft appear to be well-positioned for growth, driven by their robotaxi-related ambitions. As robotaxi services expand, both the ride-hailing companies appear to be attractive long-term bets.

However, currently, Lyft’s more focused operation, better price performance of late, and more attractive valuation put it in a better position than Uber. Lyft’s more reassuring earnings estimate revisions add to its list of advantages.

In view of our analysis, LYFT seems a better pick than UBER now.

While LYFT carries a Zacks Rank #2 (Buy), UBER currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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