Lyft (LYFT) Introduces Rental-Car Service In California

Lyft, Inc. (NASDAQ:LYFT) enters the rental-car world with Lyft Rentals. This rental-car service is available through its app to select customers in the Bay Area and Los Angeles.

The company will not levy additional charges on the basis of mileage or refueling costs. Riders will also obtain credits of up to $20 each way for rides to and from its rental lots in Los Angeles, San Francisco and Oakland. Users can rent cars for maximum two weeks. The cars available for rent are Mazda 3 sedan and Mazda CX-5 SUV in Los Angeles whereas in in the Bay Area, customers can choose between a Volkswagen (DE:VOWG_p) Passat or a Volkswagen Atlas SUV.

Lyft has been witnessing substantial top-line growth owing to uptick in Active Riders. Total revenues soared 74.8% in the first nine months of 2019. Revenue per Active Rider increased 21.7%, 33.9% and 27% in the first, second and the third quarter of 2019, respectively. The new rental-car service, if successful, should further drive the top line. However, significant cost pressure due to high sales and marketing expenses are weighing on its bottom line.

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Lyft carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the same space are InterXion Holding N.V. (NYSE:INXN) , Marchex, Inc. (NASDAQ:MCHX) and Akamai Technologies, Inc. (NASDAQ:AKAM) . While InterXion and Marchex sport a Zacks Rank #1 (Strong Buy), Akamai carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of InterXion have rallied more than 47% so far this year while Marchex and Akamai stocks have surged 38% each.

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