Lyft Second Quarter Earnings And War With Uber
Lyft announced its second-quarter earnings and they look good. In 2019, the company gained more riders that boosted their revenue. The company reported 67 cents per share loss with $867 Million in revenue. It also said that its price-war with Uber is abating.
The company beat the Wall Street revenue estimation which further surged their share price by 13%. But it loses its gain after it announced share-lockups would expire on August 19 instead of September. The San Fransico based company expects its revenue to peak between $3.47 Billion and $3.5 Billion.
Earlier Investors were afraid about the sizable losses by both the leading ride-hailing company in the United States as both were relying on heavy discounts and subsidies to drivers to pace up the growth. “The market has improved,” Lyft financial chief Brian Roberts said in an interview. “We became more efficient and the market became more rational.”
Lyft Inc previously forecasted their loss more than a billion dollars. But now they expect to be between $850 million to $875 million in 2019. It recorded $644 Million loss in this quarter. The number of active riders of the company increased from 15.5 Million to 21.8 Million as compared to last year. Even though Lyft increased its fare it has maintained the momentum.
The sales and marketing expense just grew to 3% to $181 Million. Brain Robers, CFO of Lyft said they increase the prices for riders suggesting Uber took the same action. Lyft went public in March with $72 IPO price whose share plummeted over time.
Uber share price also rose by 3% after Lyft’s positive outlook. Likewise Uber, Lyft is also trying to capture the market beyond the taxi business. It acquired Motivate and its bike-sharing network to deploy “dockless bikes” in North American cities.