Lyft’s operating profit rises due to demand for shares, slowing hiring

The Lyft Driver Hub is seen in Los Angeles, California, U.S., March 20, 2019. REUTERS/Lucy Nicholson/File Photo

Aug 4 (Reuters) – Ride-hailing company Lyft Inc ( LYFT.O ) on Thursday reported a record adjusted operating profit, benefiting from rising demand for rides and a dramatic slowdown in hiring across the company that helped manage costs. shares rose 5%.

Earlier this week, bigger rival Uber Inc ( UBER.N ) reported upbeat quarterly results and turned cash flow positive for the first time, signaling demand for the stock even as high inflation forces many consumers to cut back on spending. read more

Lyft last quarter said it would invest to attract drivers as ride-hailing companies struggled with fewer cars on the road as consumers returned to the office and made more trips to the airport. Both Uber and Lyft are seeing more driver sign-ups as the cost of living rises.

“We’ve had the majority of new drivers come in organically … There’s a tailwind as more and more people enjoy that supplemental income,” Lyft President John Zimmer said in an interview with Reuters.

Zimmer said the growth also came as he focused on products and engineering to improve market efficiency.

He said the company sees more room for growth as it works on how it matches riders and drivers and introduces new programs for users who have different price points.

Lyft was also among the tech companies that slowed hiring to deal with an economic slowdown.

The company’s adjusted EBITDA, a measure that excludes stock-based compensation and certain other costs, was $79.1 million for the second quarter and beat its own forecast for a range between $10 million and $20 million.

Active riders were 19.9 million in the second quarter, up 12% from the previous quarter and the highest on Lyft’s platform since the start of COVID-19. Airport trips made up 10.2 percent of total trips, a record high, Zimmer said, adding that there was strong demand for rideshares.

Revenue rose 30% to $990.7 million in the quarter ended June 30 from a year ago. Analysts on average had expected $990.5 million, according to IBES data from Refinitiv.

Reporting by Nivedita Balu in Bengaluru. Edited by Maju Samuel

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