Lyft's Comeback: Analyzing the Waymo Partnership and Market Share Gains

Lyft and Waymo: A Partnership Driving Towards the Future of Transportation?

For years, Lyft seemed to be playing catch-up to ridesharing giant Uber. However, Lyft is now staging a notable comeback, with its stock outperforming Uber's year-to-date. A key driver of this resurgence is Lyft's strategic partnership with Waymo, a leader in self-driving technology. On September 17th, Lyft announced a partnership with Waymo in Nashville, a significant step towards exploring the opportunities presented by autonomous vehicles. Through Lyft's Flexdrive service, Lyft will manage Waymo's fleet of vehicles in Nashville, including maintenance, cleaning, and recharging. This partnership strengthens Lyft's position as a major player in the ridesharing market and demonstrates its adaptability to technological advancements.

Waymo: Partner or Potential Competitor?

While Waymo is currently a partner to Lyft, it could potentially evolve into a formidable competitor in the future. Customers in Nashville can hail Waymo self-driving vehicles through the Lyft app or directly through the Waymo app. In other markets, Waymo has gained market share by directly reaching customers through its own app. However, Lyft also has a partnership with Mobileye in the autonomous driving space, demonstrating its commitment to diversifying its strategies in this area.

Lyft's Growing Market Share and Financial Turnaround

Under the leadership of CEO Dave Risher, Lyft has made significant progress in increasing its market share in the United States, growing from 26-27% to 30-31%. This growth is attributed to lower ride costs and innovative features such as allowing female riders to choose female drivers. Additionally, Lyft has expanded into Canada as its first country outside the U.S. and is developing other features like the Flexdrive program. These improvements have accelerated Lyft's revenue growth, totaling $1.59 billion last quarter, up 11% year-over-year. Importantly, the company is now cash-flow-positive, proving its ability to operate profitably in a competitive market. This financial stability is a crucial factor in Lyft's ongoing comeback.

Should You Buy Lyft Stock?

With its stock up 75% in 2025 alone, Lyft has a market cap of $9.2 billion. This may seem cheap compared to the trailing-free-cash-flow generation and Uber's massive $200 billion market value. However, when looking at net income, which includes non-cash charges for insurance reserves and stock-based compensation, Lyft's stock isn't quite as cheap, with a price-to-earnings ratio (P/E) of around 100. Nevertheless, Lyft may still have significant room to expand its profit margins, and continued operational efficiencies could drive further profitability. Overall, Lyft appears to be on the right track, with revenue growth and strategic partnerships like Waymo. While the stock may not be screamingly cheap, Lyft still presents a compelling value proposition for investors who buy today and hold for the next five years or longer. Further growth and innovation in the ridesharing and autonomous vehicle markets will continue to shape Lyft's trajectory.