Lyft shares dropped 25% this week after the rideshare service released its first-quarter results and announced it would likely not reach Wall Street’s expectations for the second quarter. The company said it still has a pressing need to offer incentives to retain current drivers and hire new ones but did not provide specific financial information regarding these incentives.
Lyft’s president, John Zimmer, told Reuters that the number of drivers dropped drastically during the pandemic and that it is taking longer than expected to reach pre-pandemic numbers.
Ridership for Q1 alone fell 4.8%, with the number of active users totaling 17.8 million. This was a drop of almost 1 million riders from the previous quarter but was still over 4 million riders more compared to Q1 of 2021.
Estimations indicate ride prices for March of 2022 were 37% higher than March of 2019. Lyft has now added a fuel surcharge to help drivers with the ongoing high gas prices. Zimmer also reported that demand is still 30% less than before the pandemic but said the company is expecting a peak in demand, especially on the West Coast.
Lyft reported its Q1 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $54.8 million but is reportedly expecting this number to drop to between $10 million and $20 million for Q2. The company also said it expects its Q2 revenue will be slightly lower than Wall Street’s projections, reporting that it will likely total between $950 million and $1 billion.
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