This Tuesday, Lyft being a public company reported a huge loss for its first quarterly earnings report, but also said that it made strides in growing its active ridership.
However, this outrageous loss still marks an improvement for Lyft’s year-ago quarter. Back then, the company reported a non-GAAP loss of around $11.40 per share. Following this report, Chief Financial Officer Brian Roberts said “Lyft anticipates that losses will peak in 2019.
For its second quarter, the company is claiming to expect revenue between $800 million and $810 million. It also guided the total revenue between $3.275 billion and $3.3 billion for the full fiscal year.
Despite the skepticism on the public exchange, the Company has continued to grow its user base over the very first quarter. Lyft claims to be having 20.5 million active riders in the quarter compared to 14 million in the first quarter of 2018. Moreover, it saw increased revenue per active rider at $37.86 compared to $28.27 for during the same quarter last year.
On the other hand, Alphabet’s self-driving car company Waymo announced a partnership with Lyft in a post. Waymo said it would be launching 10 of its vehicles on Lyft in the Phoenix area. The riders will be able to choose Waymo as their mode of ride within the app.
Here’s how Lyft described its report to analyst expectations for its first-quarter of 2019:
A. Loss per share: $9.02, adjusted
B. Revenue: $776 million, versus $739.4 million expected, per Refinitiv
This announcement could be the ultimate turning point for Lyft, since all the other ride-hailing companies like Uber, gives a significant amount to its drivers. A number of analysts suggested that automation is a key step for these companies to reach profitability. However, Lyft is developing its own self-driving cars.
Lyft, in fact, had an unstable start to trading down more than 20% over the last month and nearly $13 off of its IPO price of $72 per share. The company debuted with a valuation topping $20 billion at the high end of its expected range, but since then its market has sunk to about $17 million.
Uber, on the other hand, has been watching the performance of Lyft closely. But, while Lyft is primarily focusing on transportation, Uber has other businesses to look after like food delivery, freight and plans for flying vehicles.
On the call with analysts, a hand full of executives said that the competitive pressure in the market seems to be improving, meaning they can begin reducing driver incentives.
Lyft’s President John Zimmer said, “Lyft is about seven years old and if you look at the economics, you can see that as a percentage of revenue that this is the most rational the market has been.”
Now that there are two strong players in the market that can both pick up riders in roughly the same amount of time in the same major markets, Zimmer said, the decision between the two comes down to brand preference.