Lyft shares rose as much as 6% on Tuesday as the company reported third-quarter earnings after the bell, following a massive rally on Monday.
Here's how Lyft did versus comparable Wall Street expectations for the period ending September 30, 2020:
The company reported a net loss of $460 million for the quarter, nearly unchanged from the $463 million it lost a year ago. However, the company's revenue and ridership increased significantly from last quarter's results of $339 million and 8.7 million riders, suggesting a notable recovery in ride-sharing during the quarter, although both figures are still way down from a year ago.
Company execs said Lyft expects to become EBITDA profitable by the fourth quarter of 2021 even if there's a slower than hoped-for recovery, and with slightly lower ride volume than the company saw at the end of 2019.
Lyft shares have also risen thanks to a ballot measure that passed in California authorizing transportation and delivery apps to keep treating drivers and delivery workers as independent contractors, not full-time employees. Companies including Lyft, Uber, DoorDash, Instacart and others spent $205 million to get their ballot measure, Prop 22, approved by voters.
Lyft has not fared as well as its chief competitor Uber amid the pandemic in the United States. That's because Lyft has not yet built the food and grocery delivery business that has helped Uber replace revenue lost from decreased travel, commuting and recreation, with deliveries to people who were ordered to or opted to stay home.
However, on Tuesday Lyft execs said the company is working on expanding in delivery, and consulting with a variety of retailers and restaurants.
Lyft President John Zimmer criticized Uber Eats for taking around 20% to 30% of restaurants' revenue for meals ordered on their platform. Lyft aims to be more of a partner that works on a b2b level with restaurants and retailers. "We're not going to step between you and your customer, unlike other platforms," he said on a call to discuss the results.
Lyft execs also touted growth in their vehicle rental business, and medical non-emergency transportation service, while emphasizing the need for ongoing discipline in spending across the board.
The company implemented a restructuring in the second quarter. Today, it is hiring slowly, avoiding spending on third-party services, and looking for safety measures that can help the company reduce its insurance costs long-term, Lyft CFO Bryan Roberts and CEO Logan Green said on Tuesday's call.