Lyft faced an uncertain fourth quarter in 2019 but still managed to beat analysts' expectations for revenue. The ride-hailing company reported its highest quarterly revenue to date, coming in at more than $1 billion.
The company focused on slimming down during the quarter that ended in December, scaling back its bike and scooter initiatives and laying off employees. Lyft pulled its scooter operations in six cities across the US, saying ridership wasn't what it expected and laid off about 20 people on that team.
On Tuesday, Lyft reported its revenue rose 52% to $1.02 billion in the fourth quarter, beating analysts' expectations of $984 million. And while Lyft still posted a net loss of $356 million for the quarter, those losses were narrower than expected. The company reported a loss of $1.19 per share, which is less than the average $1.36 loss per share forecast by analysts.
"We significantly improved our path to profitability while simultaneously reaching critical milestones toward our long-term strategy," Logan Green, Lyft co-founder and CEO, said in a statement. "With the Lyft transportation network, we are already helping over 22 million consumers get around in a much more simple and economical way."
Still, Lyft faces obstacles ahead. The company is contending with dozens of lawsuits involving women who allege it hasn't done enough to protect passengers from sexual assault by drivers. The suits, most of which were filed over the past six months, allege Lyft does substandard background checks on drivers and often doesn't deactivate them from the platform after sexual assault allegations.
In January, a California state judge ruled these lawsuits can potentially be combined into one case. That means if the suit goes to trial, one jury would look at all the cases together, which is something Lyft was trying to avoid.
Lyft, its rival Uber and other gig economy companies are also dealing with a new California law that could require them to make their drivers employees. Many drivers say this law will help them get basic labor rights. But the companies, most of which aren't yet profitable, warn the law could drive up their costs.
Lyft hasin the state to bring the issue to voters in November. On an earnings call Tuesday, Lyft Chief Financial Officer Brian Roberts said the company is ready to invest up to $75 million more on 2020 "policy initiatives," including in California.
"This is a substantial increase," Roberts said. "But we believe this is the right approach to help protect the flexibility that our drivers value today."
Lyft's difficulties have been reflected in its stock performance. After a strong first day of trading last March, the ride-hailing company has failed to match that day's price of $78 per share. Shareholders filed lawsuits in April alleging the company misrepresented its strength. And by mid-October, the company's shares were less than half of their first-day price.
Since then, Lyft shares have gained ground, slowly rising throughout November and December. They closed at $53.98 per share on Tuesday.
Uber has also reported better-than-expected earnings last week, along with expected profitability by the end of this year, it saw a bounce on Wall Street. Lyft's share price also rose more than 12% in conjunction with Uber's news.. But after it
In after-hours trading, Lyft's shares fell by as much as 5%. This is likely because the company didn't advance its profitability timeline as Uber did last week, according to analysts. Lyft said it's planning to achieve profitability at the end of 2021.
Originally published Feb. 11.
Updates, Feb. 11: Adds information from earnings call; Feb. 12: Adds comment from Lyft Chief Financial Officer Brian Roberts.