LYFT plans to sell some of its bike and scooter business and eliminate 1 per cent of its employees as the ride-hailing company struggles to turn profitable.
The plan is part of “efforts to align strategic priorities and to reduce operating costs”, the company said in a regulatory filing on Wednesday (Sep 4), without naming a buyer. Lyft had nearly 3,000 employees at the end of last year.
The company expects to incur approximately US$34 million to US$46 million of restructuring and related charges, due to asset disposal costs, severance payments and advisory fees. The charges will primarily be incurred in the third quarter, it said.
Lyft, which operates bike sharing programmes in New York City, Chicago, San Francisco and Minneapolis, issued ambitious three-year growth and profitability targets in June, signalling an effort to turn around its core ridesharing business that has struggled to gain share from rival Uber Technologies.
The company has been looking since last summer for a strategic partner that can invest in its bikes and scooter rental infrastructure. In the meantime, it recently raised prices for its popular e-bike rentals in New York, citing high operating costs.
It expects the restructuring to improve annualised adjusted earnings before interest, taxes, depreciation and amortisation by approximately US$20 million by the end of 2025 due to savings from headcount reduction, operational efficiencies and commercial strategy enhancements.
Shares of Lyft rose as much as 2.4 per cent after trading opened on Wednesday in New York. The stock has declined about 24 per cent this year. BLOOMBERG
