Uber vs Lyft: What drives their valuation?

Abstract

Ride sharing companies have raised more than $25 Bn in private equity since 2010. Today, the top 5 ride sharing companies in the world - Uber, Didi-Chuxing, Lyft, Ola and Grab, have a combined market cap of $120 Bn. It is evident that ride sharing apps have a large and expanding market opportunity, benefit from significant demographic tailwinds. Uber has already established itself as a market leader in most geographies, and its business model has inherent network effects benefits. Key near-term debates include legal/regulatory framework and intense competition weighing on unit economics.