[NEW YORK] Lyft shares slid in late on Wednesday (Aug 6) trading after the ride-hailing company reported revenue that fell short of Wall Street’s expectations, stoking concerns about its efforts to expand globally.
The company reported revenue of US$1.59 billion in the three months ended Jun 30, slightly missing analysts’ expectations of US$1.61 billion. And while the number of rides completed on the platform hit an all-time high, they too fell short of projections. Shares of the company were down about 7.2 per cent at about US$12.97 in after-markets trading.
The results landed just hours after Uber Technologies issued a better-than-expected forecast for the third quarter and exceeded Wall Street’s expectations on gross bookings. However, the company’s own ride-share unit recorded US$23.8 billion in bookings, falling slightly below expectations, also driving the company’s shares down on Wednesday.
The disappointing results of ride-hailing companies such as Uber and Lyft are offering a glimpse into discretionary consumer spending at a time when the economy is already flashing warning signs. Just last week, US employment numbers painted a much weaker picture of the labour market than previously reported, and inflation-adjusted consumer spending, which accounts for about two-thirds of US economic activity, fell in the first half of the year.
Lyft’s sales miss overshadowed what was otherwise a strong quarter. The company’s net income totalled US$40.3 million in the second quarter, more than double the US$18.1 million that analysts had expected. Gross bookings gained 12 per cent from a year earlier, roughly in line with estimates. The number of active passengers hit a record.
In the third quarter, Lyft said that it expects gross bookings to rise to as high as US$4.8 billion and projected adjusted earnings of US$125 million to US$145 million. The company’s outlook includes the integration of Freenow, the European taxi app it recently acquired, beginning Aug 1.
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Since attaining consistent positive free cash flow in the past year, Lyft has been working on growing globally. It has expanded into the ten most populous Canadian cities, as well as Puerto Rico. Last week, the company formally entered nine new European markets, including the UK and Germany, after completing its acquisition of Freenow.
As part of this expansion, Lyft announced this month a partnership with Baidu to begin deploying autonomous vehicles in Europe. Initial launches are planned for Germany and the UK in 2026, pending regulatory approval, with Lyft using Baidu’s robotaxis.
Last month, Uber announced a deal in which it will feature Baidu’s driverless cars on the Uber app, but the initial deployment later this year is planned for Asia and the Middle East, not Europe.
Lyft is also working towards offering its first driverless rides in Atlanta later this year with May Mobility. The firm’s also planning US deployments in 2026 with Intel-backed Mobileye Global and Benteler Group.
Lyft separately announced on Wednesday a new partnership that would allow United Airlines Holdings members to earn miles on rides. BLOOMBERG
