The previous couple of months have actually been unstable for Lyft. The ride-hailing giant’s service has actually been suppressed by the, and the business has actually reacted with layoffs. On Wednesday, nevertheless, Lyft’s first-quarter incomes didn’t completely show those issues.
Lyft reported its earnings increased 23% given that the exact same time in 2015 to $995.7 million, beating experts’ expectations of $897 million. But the business published a bottom line of $398.1 million for the quarter, which was higher than anticipated though narrower than its losses throughout the exact same time in 2015.
“While the COVID-19 pandemic poses a formidable challenge to our business, we are prepared to weather this crisis,” Lyft CEO Logan Green stated in a declaration. “We are responding to the pandemic with an aggressive cost reduction plan that will give us an even leaner expense structure and allow us to emerge stronger.”
The coronavirus shook the whole economy throughout the very first quarter of the year, which ended on March 31. Most business saw an effect on their service as the infection took hold. But business in the travel and tourist markets, like Lyft, Uber, Airbnb, hotels and airline companies, experienced a sheer drop in service and their stock rates. Lyft saw its stock rate drop 73% from $53 in mid-February to $14 by mid-March.
In after-hours trading, Lyft shares increased 15% to $30 after the business report.
Unlike its competitor Uber, which has actually diversified its service with numerous various offerings, Lyft has actually long promoted itself as being entirely concentrated on transport. The technique, which the business just recently retooled, has actually shown to be its Achilles’ heel throughout the coronavirus pandemic. It’s seen its volume of trips plunge since of shelter-in-place orders working throughout the nation.
Green stated on a profits call with financiers on Wednesday that Lyft’s trips were down by as much as 75% in mid-April. But trips have actually turned up a little because that low point, he stated. The business saw a 3% boost in ridership from the exact same duration in 2015, going from 20.5 million active riders in the very first quarter of 2019 to 21.2 million in 2020. But it’s most likely those numbers will drop in the 2nd quarter of this year as shelter-in-place orders stay throughout much of the United States.
“The virus is testing our everyday way of life and has had a profound effect on our business,” Green stated. “These are the hard truths we’re facing.”
In March, Lyft presented a series of brand-new programs that weren’t clearly concentrated on transport, such as a pilot program for providing medical materials and test sets to elderly people and other susceptible populations. It likewise piloted a meal shipment program and partnered with Amazon to offer the retail giant with shipment chauffeurs.
On the earnings call, Lyft’s Chief Financial Officer Brian Roberts said the company has “no interest in launching a consumer food delivery service.” But, with these delivery endeavors, Lyft is positioning itself as “essential” during the crisis.
“We know Lyft can be a critical lifeline for communities in need,” the company wrote in a March 20 blog post. “Right now, Lyft drivers are playing a vital role connecting people with essential services and goods — getting riders to grocery stores and pharmacies, doctors and nurses to work, and caretakers to family members in need.”
Still, it’s unclear how much these measures are helping the company. Last week, Lyft announced it was laying off 17% of its staff, a total of 982 employees, and furloughing another 288 people.
On Wednesday, Uber said it was also cutting its workforce by 14%, letting go of 3,700 employees. Uber is expected to announce it’s first-quarter earnings on Thursday.