On August 12, a ridesharing company, Lyft, reported its second-quarter earnings. It is worth mentioning that the revenue in the second quarter fell by 61% in comparison to the same period of time last year.
According to the president and co-founder of Lyft, John Zimmer, the company may need to suspend its ride-hailing operations in California. This would be the case if a court does not overturn its recent ruling which requires the company to classify drivers as employees eligible for benefits. People should take into account that California is a major market for the company. It accounts for about 16% of total rides.
Interestingly, on August 13, a California judge denied motions by Lyft and Uber to delay a previous injunction. It ordered the ridesharing companies to reclassify their contractors as full-time employees.
Lyft and interesting details
In the second quarter, the loss per share was lower than expected. Analysts expected that the loss per share would reach 99 cents, but it reached 86 cents.
Moreover, revenue surpassed expectations by $2 million and reached $339 million.
It is worth mentioning that the net losses for Lyft amounted to $437.1 million during the second quarter. As a reminder, its net losses fell from $644.2 million to $437.1 million. This is in comparison to the same period of time last year.
The company makes money through ride-hailing, scooter, and bike-sharing, as well as its new vehicle rentals business. It is no secret that, unlike Uber, Lyft does not have food delivery, freight, or investments and operations in other countries. As a result, it is unable to balance losses from the revenue in travel and transportation.
Lyft did not provide top-line guidance. However, according to the company, it is on track to achieve profitability on an adjusted basis during the fourth quarter of 2021. Moreover, Lyft expects to become profitable, with 20% to 25% fewer rides than it predicted as of October 2019.
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