Lyft (NASDAQ: LYFT) and its ride-share rival Uber (NYSE: UBER) have a pricing problem. Both companies used cheap prices as a way to build their businesses and win market share from traditional taxis. That's worked -- but it's a flawed business model, because both companies still exist.
You can argue that both Lyft and Uber have achieved critical mass when it comes to customer acquisition, and in many cases that's when a company can cut its marketing spend and start to raise prices. Lyft and Uber can't do that, however, because it's easy for consumers to switch between the two. That leaves both businesses in a position where losses will continue even as market share grows.
Ride-sharing has proven popular but not profitable. Image source: Getty Images.
Source Fool.com