Shares of Lyft fell 1.3% Wednesday during premarket, after the ridesharing company mitigated its Q4 revenue outlook, following a significant decline in rides this year. CEO Logan Green, said rides in November were down about 50% from last years quarterly report, due in large part to rising virus cases that ushered in a plethora of restrictive measures. In the week ending September 6, rides had recovered to an under-50% Y/Y decline, a new high since the pandemic hit in April.
Subsequently, the rideshare company—owned by parent company, Rakuten— is now expecting Q4 revenue growth to be at the “lower end” of the previous guidance range in November of 11%-to-15% growth. Pro tempore, the company said it’ll manage its adjusted EBITDA loss “to be better than $185 million,” compared with a previous loss in guidance of “roughly $200 million at the midpoint and $190 million at the high end.” Although Lyft has made a swift recovery, trading back at a $40 handle, the stock has dropped 7.9% YTD through Tuesday, while the S&P 500 melted up 13.4% during the pandy.
Here’s a quote on driver spending from Seeking Alpha: “In August, the Company used a lower amount of driver incentives than originally anticipated as more drivers returned to the platform, improving supply conditions on the Company’s rideshare marketplace. While trends in driver supply vary significantly between individual cities, Lyft expects that lower driver incentives spend will result in a more favorable relationship between revenue and rideshare rides in the third quarter than previously expected. Based on this improved outlook, the coma now expects that the year-over-year change in revenue will modestly outperform the year-over-year change in rideshare rides in the third quarter if driver incentives spend remains at August 2020 levels in September 2020.”