Eats has given Uber an edge over Lyft that could keep paying off long after COVID-19 has gone (UBER, LYFT)

Uber Eats has helped the ride-hailing perform better than Lyft this year.
Eats is also one of three reasons Uber has a long-term advantage over Lyft, Mark Mahaney, an analyst at RBC Capital Markets, told Business Insider.
Also key: Uber's international presence and its dominant share of the North America ride-hailing market.
Are you a current or former employee of Uber or Lyft? Do you have an opinion about what it's like to work there? Contact this reporter at mmatousek@businessinsider.com, on Signal at 646-768-4712, or via his encrypted email address mmatousek@protonmail.com.
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The rapid growth of Uber Eats between in the first half of 2020 has given the ride-hailing giant an edge over Lyft during what has otherwise been a brutal year for the companies. That lead could widen even after the pandemic subsides, according to RBC Capital Markets Analyst Mark Mahaney.

At the beginning of this year, Lyft's stock was trading at $43, while Uber lagged behind at $30, but that gap has closed in the past eight months. When markets opened on Friday, Uber's shares were selling for $31, while Lyft's had fallen to $29.

"I think it's almost entirely due to the fact that they have this Eats business," Mahaney told Business Insider.

Eats is one of the three pillars of what Mahaney considers to Uber's long-term advantage over Lyft. The others are Uber's international presence (Uber operates in 69 countries, while Lyft has confined itself to North America) and dominant share of the North America ride-hailing market. Combined, they give Uber a broader revenue base that creates the potential for higher profits in the future. Neither company has ever been profitable for a full quarter, but Mahaney believes Uber's size and diverse business approach gives it the potential to earn bigger profits in the future.

"There's a larger revenue and a larger profit pool that Uber can tap into," Mahaney said.

Before the pandemic, Mahaney believed Uber's long-term prospects were better than Lyft's. But the crisis has only strengthened his opinion of Eats, which has counterbalanced lower ride demand.

A Lyft representative pointed Business Insider to comments made by Lyft CFO Brian Roberts during the company's second-quarter earnings call. Roberts said he expected Lyft's narrower business model to earn higher profit margins than those of its ride-hailing competitors in the long run.

"We expect that the margins of a North American pure-play transportation network will exceed conglomerate models that include lower-margin businesses and geographies," he said.

Lyft's management team has performed well this year, Mahaney said, as it has found more ways to cut fixed costs than he thought possible. Amid uncontrollable shelter-in-place orders and health concerns that have cut ride demand, they have been smart about preserving financial resources and protecting the health of drivers and riders, Mahaney said.

"I just don't know what they could have done differently," he said.

Are you a current or former employee of Uber or Lyft? Do you have an opinion about what it's like to work there? Contact this reporter at mmatousek@businessinsider.com, on Signal at 646-768-4712, or via his encrypted email address mmatousek@protonmail.com.