Is Lyft making money? Haha.
Getting Lyft behind
Lyft is the latest company to report less-than-great earnings and get a stern reckoning from investors. Shares in the ride-hailing company are down more than 34% at the time of writing after the platform warned that it was struggling to attract drivers.
The primary appeal of ride-hailing, getting customers a driver in minutes at low prices, falls down pretty hard if riders have to wait 15 or 20 minutes for a driver, which is why Lyft is offering financial incentives to attract new drivers. That is a reasonable strategy, but it's concerning when the company's economics weren't stacking up to begin with. The last 17 quarters have seen Lyft burn through more than $6.8 billion — a staggering amount for a company that has never really recovered fully from the pandemic.
Investors were connecting the dots on Tuesday evening, with Uber shares falling before the company had even reported its own set of results this morning. Uber hasn't completely escaped, with its shares also down about 10%, but thanks to a strong rebound in its mobility business and another solid performance from its food delivery business, Uber claims it can see a path into the black. Without a food delivery business to lean on, and with driver incentives yet to fully roll out, Lyft can't say the same.