Tesla’s ridehailing rollout may create overhang for Uber, Lyft, says RBC Capital

RBC Capital keeps an Outperform rating on Uber (UBER) and Lyft (LYFT) with respective $80 and $17 price targets but warns that Tesla (TSLA) had saved the “ride-hailing rollout surprise” for its earnings call, noting that it expects paid rides to start occurring in Texas and California by next year, pending regulatory approval, and later added it could target other markets by next year as well. RBC remains confident in UBER’s and eventually LYFT’s tech-agnostic approach being a “better mousetrap” than one company going against the rest of the world with a captive network as it should allow for the best supply along and immediate capacity utilization, though Tesla’s inroads in ride-hailing could create a new overhang for these companies if it shows signs of product market fit in Texas or California, which could impact multiples, the analyst tells investors in a research note.