Lyft’s 2Q loss USD437M as virus spread and riders stayed home

NEW YORK (AP) — Lyft posted a loss of USD437.1 million during the second quarter, when the coronavirus outbreak led many people to stay home and few were eager to use its ride-hailing service.

The San Francisco-based company’s revenue slumped to USD339.3 million in the April-June quarter, down 61 per cent from the same period last year, the company said on Wednesday.
Its number of active riders declined 60 per cent during the quarter as people shied away from traveling in shared vehicles.

“The facts of COVID-19 have been severe for our society and economy, as well as our own business,” said co-founder and CEO Logan Green in a conference call with investors. “While the recovery in our ridesharing business has not been a straight line, we’re seeing encouraging progress.”

Riders are increasingly using Lyft for essential trips such as doctor appointments and grocery runs, and as cities are forced to cut budgets and public transit use declines, Green said. He noted that rides were up 78 per cent in July compared to April.

While business gradually improved, rides were down 70 per cent in May, 61 per cent in June and 54 per cent in July compared to last year. Lyft took steps to stem the bleeding, and in April announced it would lay off 982 people, or 17 per cent of its workforce. That month, rides were down 75 per cent compared to the same time last year. Lyft also furloughed 300 employees and reduced salaries and board-member compensation.

Lyft and rival Uber are also confronting a recent judicial order that they classify their drivers as employees in California, which would leave the companies on the hook to provide benefits, overtime pay and sick leave for drivers.

Both companies vowed to appeal the decision. “If our efforts here are not successful, it would force us to suspend our operations in California,” said President and co-founder of Lyft John Zimmer.

Lyft still expects to achieve profitability at the end of next year. But the company’s projections assume it will prevail against the order to classify its drivers as employees. Uber CEO Dara Khosrowshahi on Wednesday told MSNBC that Uber also would have to shut down in California if the ruling holds and the companies aren’t given a stay until November, when voters will decide on a related ballot measure.

On the bright side, Lyft’s shared bike rides doubled from the start of April to the end of June. “We are extremely well positioned, given our leadership in the bike share market, including our exclusive right to operate bike share in some of the largest cities in the United States (US),” Zimmer said.