Lyft’s number of active riders plunged during the second quarter in which the top ride-sharing firm’s earnings took a significant hit because of the coronavirus pandemic as the future of its business in California was cast into doubt by senior executives.
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Lyft had 8.7 million active riders during the three months ending in July, a 60 percent decline compared to the same period one year ago. The company reported adjusted earnings per share of 86 cents, falling short of the 99 cents that Wall Street analysts expected.
Second-quarter revenue declined 61 percent to $339 million. While the Lyft and ride-sharing rival Uber have struggled during the pandemic, Lyft CEO Logan Green said early third-quarter data showed signs of a potential turnaround in the coming weeks.
Lyft reported results two days after a California judge granted preliminary injunction effectively requiring ride-share companies to identify their drivers as employees rather than independent contractors. Uber and Lyft are set to appeal. However, like rival Uber, Lyft President John Zimmer said on the company’s earnings call, Lyft may suspend services in California if the state does not overturn a recent ruling.
Regarding earnings, CEO Logan Green said in a statement, “While rideshare rides in the quarter were down significantly year-over-year, we are encouraged by the recovery trends we are beginning to see, with monthly rideshare rides in July up 78% compared to April.”
Noting the impact of the pandemic, Green added, “Lyft’s second quarter results reflect an operating environment that was not only challenging for our core ridesharing business, but also for our valued riders and drivers and the communities we serve."
Lyft’s second-quarter net loss was $437.1 million down from a net loss of $644.2 million last year. Unlike rival Uber, Lyft does not operate a food-delivery business.
Shares were flat in after-hours trading.
Lyft has taken a number of steps to reassure its riders and drivers of their safety during the pandemic. The company instituted a requirement that all passengers wear masks. The company conducted a round of layoffs earlier this year in a bid to cut costs during the downturn in the ride-sharing business.
“Our performance reinforces our belief that Lyft is taking on the critical work necessary to emerge from the crisis as a stronger company,” Green added.