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HomeTechnology NewsLyft attracts riders, trumps revenue estimates as costs soar

Lyft attracts riders, trumps revenue estimates as costs soar

(Reuters) – Ride-hailing company Lyft Inc (LYFT.O) blew past Wall Street estimates for third-quarter revenue on Wednesday, but promotional costs rose as it battled Uber Technologies Inc (UBER.N) to attract more customers.

Shares of Lyft were up about 2% at $45.20 in after-hours trading as the company beat third-quarter expectations and raised its full-year forecast.

Lyft’s active rider customer base grew to 22.3 million, said the company, which operates in over 300 cities in the United States and Canada.

Loss-making Lyft and its larger rival Uber have historically relied on heavy subsidies to attract riders. While the companies have said there are signs that price competition was easing, both are also spending to expand into other areas.

Lyft’s revenue surged about 63% to $955.6 million in the third quarter ended Sept. 30, beating the average analyst estimate of $915.04 million, according to IBES data from Refinitiv.

But costs during the same period rose 70%.

On average, the company earned $42.82 in revenue from each of its active riders in its third quarter as a public company, a jump of about 27% in revenue per rider and a 28% increase in riders over the same period in 2018.

Investors overall have become more picky in recent months, as Wall Street shows waning patience for money-losing former unicorn startups.

Lyft has launched new initiatives and partnered with several companies as it battles Uber for a bigger share of the ride-hailing market.

Interactive graphic on Lyft rider numbers: here

The company hopes to become a one-stop mobility shop for passengers seeking to commute via ride-hailing, public transport, bike and electric scooter sharing, recently announcing changes to its app that display all transportation methods.

Lyft said on Wednesday it expects revenue in the range of $975 million to $985 million for the fourth quarter. Analysts on average were expecting revenue of $942.6 million, according to IBES data from Refinitiv.

It is now expected to be profitable on an adjusted EBITDA basis in the fourth quarter of 2021, Chief Executive Officer Logan Green said.

The company had earlier promised that its ride-hailing services would be profitable without giving any timeline. But it had also warned that as a company it might continue posting losses as it invests heavily in self-driving cars, renting scooters and other ventures.

The company had a loss of $1.57 per share compared with a loss of $11.58 per share in the third quarter of 2018, as the number of outstanding shares rose from a year earlier.

Interactive graphic on Lyft’s loss: here

Reporting by Noor Zainab Hussain and Akanksha Rana in Bengaluru and by Tina Bellon in New York; Editing by Sriraj Kalluvila and Matthew Lewis