Updates shares in paragraph 1, Lyft market cap drop and Uber shares in paragraph 12

Feb 12 (Reuters) - Lyft LYFT.O shares slumped about 9% on Wednesday after the ride-hailing company warned that lower pricing trends from late last year are expected to continue in 2025, as it tries to match prices with larger rival Uber.

The ride-hailing platform has been aggressively working on luring customers and drivers onto its platform by keeping prices competitive and launching new features that differentiate it from Uber UBER.N.

However, Lyft said on Tuesday that it saw prices fall in the fourth quarter and the trend has continued so far this year.

It added that the company had to drop fares for rides and give away more coupons in the last few weeks of 2024 to keep prices competitive.

In contrast, Uber said last week that it expects prices for its affordable private car offering, UberX, to be marginally up this year, as it passes insurance cost hikes on to consumers.

"What seems clear though is U.S. rideshare is allocating more incentive dollars towards consumers, funded by lower incentives to drivers — ok 'if' done with balance," Bernstein analysts said in a note.

Lyft said it had the flexibility to adjust incentives to balance supply and demand in the marketplace since it had a robust number of drivers on the platform.

"We suspect prices will be lower for longer which will test the elasticity of demand for the industry," Needham analysts said.

At least thirteen brokerages cut their price targets on the Lyft stock, a day after the company's fourth-quarter results, bringing the median PT to $18, as per data compiled by LSEG.

Lyft on Tuesday forecast gross bookings below Wall Street estimates, similar to rival Uber's projection last week.

Lyft's 12-month forward price-to-earnings ratio is 13.4, compared to Uber's 29.4. In 2024, Lyft's shares fell 13.9%, while so far this year it has risen 11.6%.

Its market capitalization was set to fall by more than $500 million to roughly $5.4 billion, if losses hold. Uber's shares were about 3% lower on Wednesday.

(Reporting by Joel Jose and Akash Sriram in Bengaluru; Editing by Shailesh Kuber)

((JoelJose@thomsonreuters.com;))