Meta CEO Mark Zuckerberg called 2023 the ‘Year of Efficiency’ in the tech sector. Meta has been in the news recently for its layoffs and the market seems to have rewarded them.
The ride-share app Lyft is now in the news for laying off 1,072 employees. The company has revised its decision to fill 250 vacant positions. Lyft laid off 13% of its staff earlier in November. The layoffs will cost Lyft between $41 million to $47 million in severance pay.
Ride-share businesses picked up as people stepped out after the pandemic. However, Lyft has been losing business to Uber, the bigger of the two companies. The difference between the two apps can be seen in their market valuation as well.
Uber’s stock price has gained 17% year-to-date while Lyft’s stock price has lost 9% of its value year-to-date.
Uber’s market share has gone up from 62% to 74% since 2020. Uber, in contrast to Lyft, has also diversified its businesses. Uber Eats, the food delivery business, has become the crown jewel of the company. The unit was boosted by Uber’s all-stock acquisition of Postmates in 2020.
How Lyft will compete against this big brother remains to be seen. The company is currently under new leadership with CEO David Risher taking over just this month. His outlook for the company remained positive despite the layoffs. He said, “I'm very, very comfortable with the idea that you can sort of get twice the team, you know, without twice the people.”
