Uber’s (UBER) pricing remains 10% ahead of rival Lyft (LYFT), moving higher in lockstep with its competitor, indicating there has been no meaningful change in competitive dynamics or market share, RBC Capital Markets said in a note emailed on Monday.
The brokerage said Uber’s long-term structural scale advantage remains intact, prompting it to maintain an outperform rating on the stock with a price target of $65.
RBC also said the pricing trend along with lower wait times indicates lower driver incentive intensity, which suggests that “demand is healthy and rationally competitive.”
“Directionally, we view higher pricing as a reflection of solid industry demand & supportive of ongoing ride growth,” RBC analyst Brad Erickson said.
“We view the persistent pricing delta between UBER & LYFT as reinforcing UBER’s structural advantage,” he added.