Uber, Lyft Face Growth Ceiling

Several executives and key investors of Uber and Lyft estimate that annual revenue the companies generate in the U.S. from their core ride-hailing business will at most grow sixfold in the coming years before leveling off. That’s a much slower growth trajectory than what they were predicting a year or two ago, and it could translate into lower valuations from institutional investors when the companies go public, expected next year.

Previously, leaders at Uber projected internally that ride-hailing in the U.S. could be a $1 trillion market in terms of gross revenue, or 40 times what it is today. But difficulty in recruiting and retaining drivers in the U.S., the most lucrative market for ride-hailing, has prompted some of these people to ratchet back growth expectations. They now feel that until autonomous vehicles eliminate the need for some human drivers, Uber and Lyft won’t be positioned to make the kind of revenue gains they once thought were possible.