New Street analyst Pierre Ferragu thinks a merger between Lyft Inc and DoorDash Inc would drive a 30 percent upside to the combined company’s long-term EBITDA.
Ferragu says combining the businesses would keep drivers busier, allowing them to make more money while also reducing the cost of finding new customers.
The combination of food delivery and ride-sharing paid off for Uber Technologies Inc and Grab Holdings Inc. He saw the same hold good for DoorDash and Lyft combo.
Ferragu sees the merger as a substantial competitive advantage to attract drivers in a supply-constrained environment.
The timing of demand for mobility and delivery is complimentary, with ride demand highest during commuting hours but food delivery heaviest at lunch and dinnertime.
He also sees consumers increasingly take rides and order food from the same platform with increasing loyalty.
Ferragu notes that Uber acquired twice as many delivery users from its rides app than its paid channels at 25 percent of the cost.
According to him, multi-platform companies are becoming more profitable and defending market shares better.
