Investing.com -- Lyft (NASDAQ:LYFT) shares fell in premarket trading on Thursday, as investors highlighted some concerns around the ride-hailing company's growth plans after third-quarter gross bookings were lower than arch-rival Uber (NYSE:UBER).
In the three months ended on Sept. 30, gross bookings, a new metric introduced by Lyft that gauges total transaction value on the firm's platform, rose 15% year-on-year to $3.55 billion. However, the figure trailed a 31% increase at Uber's mobility service.
San Francisco-based Lyft reported 187.4 million rides in the quarter, up just over 20% from last year, reflecting the impact of a reduction in prices by the second-biggest ride-sharing group that was aimed at boosting its market share. According to YipitData numbers cited by Reuters, Lyft controlled 29% of the ride-hailing market at the end of September.
Despite slashing headcount to fund the lower fares, analysts at BTIG noted that the price cuts have left core earnings and revenue "muted." Lyft reported adjusted net income of $92.3 million and revenue of $1.16 billion in its latest quarter, both surpassing expectations that BTIG described as "modest."
Lyft guided for fourth-quarter gross bookings of $3.6 billion to $3.7 billion and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $50 million to $60 million.
In a call with analysts, the company also noted that adjusted core income margin calculated as percentage of gross bookings will fall slightly to around 1.4% to 1.6% in the current three-month period due to recent insurance contract renewals. The figure stood at 2.6% in the third quarter.
"While we see Lyft's strategic efforts (competitive fares and cost cuts) as positives, margins are still thin at mid-single digits on EBITDA," the BTIG analysts said in a note. "That doesn't leave a lot of room should Uber decide to squeeze."
Liz Moyer contributed to this report.