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Lyft Q2 2022 Revenue: Driver Incentives Paying Off

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Lyft’s cost-cutting measures amid rising inflation and a potential economic slowdown are paying off, the company said Thursday.

The ride-hailing company also reported adjusted EBITDA, excluding some items, of $79.1 million, which was its highest profit in history. Still, Lyft reported a net loss of $377.2 million, up from the same quarter a year ago.

Lyft announced in late May that it would slow hiring and assess cuts as the broader tech sector began to contain costs amid macroeconomic concerns. Last month, the company also laid off about 60 employees and closed his car rental business.

“We are taking a prudent approach to managing our business,” Lyft CFO Elaine Paul said during the company’s conference call with investors. “First, like many companies, we keep a close eye on consumer behavior. Even in a recessionary environment, transportation is a historically sustainable category of consumer spending.”

The company also offers a range of transportation options, from bicycles to shared rides to priority pick-ups, which could attract a wider user base.

For the second quarter, Lyft reported revenue of $991 million, which beat Wall Street estimates and was up 30% year-over-year and 13% from the first quarter.

Lyft said it expects third-quarter revenue of between $1.04 billion and $1.06 billion, which would represent growth of between 5% and 7% in the current quarter. The company also expects adjusted EBITDA for the third quarter of $55 million to $65 million.

Lyft also reported an increase in the number of active riders to 19.9 million, the highest number of riders since the start of the COVID-19 pandemic. That is in line with analyst expectations. Revenue per active rider was also the second highest ever at $49.89.

A key issue for the company was figuring out how to spend it intentionally on driver incentives.

Investors were shocked when Lyft reported its first quarter results and warned it would spend more on driver incentives in the second quarter. But those incentives seem to be paying off. Lyft said it is still on track for its rideshare volumes to reach and exceed pre-COVID-19 levels.

Lyft CEO Logan Green said the company’s number of active drivers is the highest in two years. More than half of the new drivers in the second quarter were also organic entries. Some drivers may also supplement their income with DIY jobs in an effort to offset rising inflation.

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