In its particular industry, Lyft (LYFT +3.31%) is generally thought of as the No. 2 to Uber Technologies (UBER +0.82%), but the former's 40% return this year has captured more people's attention. Lyft stock has actually outperformed Uber this year, although the five-year picture is much different. And while the S&P 500's performance didn't keep up with Lyft in 2025 (up 16%), the index's 83% gain over the past five years handily outperforms Lyft stock's 62% decline over the same stretch.
Investors considering Lyft stock for 2026 will have to determine if Lyft's future stock movements are going to reflect 2025's successes or revert to underperforming the S&P 500 (as it has for most of its existence).
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Rider growth and engagement dictate long-term revenue
Rider growth is a key metric for ride-hailing services because more riders translate into more customers and sales. Lyft wrapped up the third quarter with 28.7 million riders compared to Uber's 189 million riders. While Uber has more riders, Lyft's 18% year-over-year growth rate in ridership came in just ahead of Uber's 17% growth rate. It's important for Lyft to outpace Uber in rider growth if it wants to extend the current rally.
However, while riders are growing faster, total ridership growth from those riders tells a different story. Lyft saw a 15% increase in quarterly rides last quarter, while Uber saw a 22% increase. And Lyft's 248.8 million rides in the quarter are still a long way from Uber's 3.5 billion rides.
Right now, the gap is expanding, but if Lyft narrows that margin, investors may view it in a better light and accumulate shares. Then, it may become a more valuable growth stock.
This was the 10th consecutive quarter of a year-over-year double-digit growth rate for Lyft's total number of riders. This number has to accelerate a bit more and get to a 20% year-over-year growth rate. Furthermore, Lyft needs a 20%-plus year-over-year boost in quarterly rides to match Uber. Those two improvements will go a long way in raising the stock price, especially if Lyft can build on the momentum.
NASDAQ: LYFT
Key Data Points
Autonomous vehicles are critical
Lyft is the second-best ride-sharing app in terms of market share, but Uber's lead is huge. Furthermore, Lyft doesn't have a food delivery service like Uber Eats, which further limits its upside. Lyft hasn't made any announcements about food delivery yet, but it has told investors about autonomous vehicles.
Some tech companies are scrambling to make vehicles that can drive themselves, including Lyft. Any ride-sharing apps and automakers that fall behind on this trend risk losing significant market share. Autonomous vehicles can also boost Lyft's profit margins and help the company service more passengers.
Lyft's Q3 earnings press release included a planned partnership with Tensor to create the first consumer-owned "Lyft-ready" autonomous vehicles, powered by Nvidia. If Lyft incorporates autonomous vehicles better and faster than Uber, then it can gain some market share. However, Lyft can miss out on a big opportunity if Uber or another company does it better.
Lyft stock can gain some ground as it expands profit margins. The company's net profit margin is currently 3%, while Uber regularly posts a double-digit margin. That presents an opportunity for the stock, but winning the autonomous vehicle race can lead to much higher returns.
