While both companies are trying to find ways to lower driver costs to become profitable, drivers went on a protest in several US cities earlier this month demanding job security, livable incomes and a cap on the amount ride-hailing companies can collect from fares.
Uber closed Friday at $41.57 and stocks in Lyft dropped about 7 percent.
Daniel Ives of Wedbush Securities said he expected the "valuation digestion process" to take some time and that he remained upbeat on Uber despite competition with Lyft and the long path to profitability. It also demonstrates that there's a significant gap between how venture-capital firms and everyone else value large but unprofitable technology companies.
Uber's shares fell almost 8 percent following their market debut on Friday, in the eighth-worst first day share price performance for a US-listed IPO worth more than $1bn, according to Dealogic.
Call it poor timing, unfortunate circumstances or just hype gone bad, but Uber Technologies Inc. It's a significantly smaller company, so its market capitalization, losses, and cash cushion are all proportionately smaller.
As they look to lower their driver-related costs, drivers are already expressing major dissatisfaction with the company's cut of their fares to the point where drivers in major markets have loudly protested ahead of both companies' IPOs. But if the stock's weakness does persist into June in the lead-up to Uber's first earnings report, the analyst community may have no other choice but to change their tune. Four competitors stepped in to give rides in tech-savvy Austin, including two local companies. Perhaps Uber will see similar optimism when its quiet period ends.More news: Eden Hazard drops major hint regarding his Chelsea future
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"It was a matter of a couple months and those three companies were gone", said Chris Simek, an associate research scientist with the Texas A&M University Transportation Institute, who co-authored a study of Uber and Lyft's impact on ride-hailing in Austin.
"We expect ridership, drivers, and the monetisation opportunities for Uber to increase markedly over the coming years".
A few things are weighing on Lyft.
Via has managed to carve out a niche by running a pooled ride system in New York, Washington, D.C., and Chicago, and it contracts to provide transit in about 70 cities worldwide. Sultan Arifi, a San Francisco based Uber driver, works 12-hour shifts and sleeps six hours or less in his auto in parking lots.
Via specializes in carrying up to six passengers at a time, largely in vans, and is growing because it can do a more efficient job carrying more people, said spokeswoman Gabrielle McCaig.
"Living expenses keep going up, and Uber keeps decreasing how much they pay drivers".
"We will be judged long-term on our performance, and I welcome that".