Lyft Earnings Report

• Revenue: $955.7 million

• Loss per share: $1.31

• Active riders: 21.2 million

• Revenue per active rider: $45.06

While other cab-hailing service providers are reporting low sales in the last quarter, Lyft has reported a 15% shares increase as it reports more rider compared to last year, regardless of the coronavirus pandemic.

On Wednesday, Lyft presented its Q1 2020 report, revealing losses of $398.1 million, and revenue of $955.7 million. With regard to the ongoing pandemic, the company recently laid off nearly 17% of its employees and slashed the pay of the remaining employees by 10% to 30%.

Shares of Lyft jumped almost 17% after it reported its Q1 revenue and its increased rider numbers that beat their expectations.  The company experienced a major improvement from the year-ago quarter when it reported $9.02 losses per share. However, its GAAP losses increased from $356 million in the fourth Quarter of 2019 to $398 million in the first quarter of 2020.

Notwithstanding, its increased active rider numbers represent a 3% year-over-year improvement, in spite of the temporary transportation and travel ban in the US due to the pandemic.

Analysts on Wall Street had predicted an adjusted loss of 62 cents per share and revenue of $893 million for the first quarter, based on a Refinitiv analyst survey. Although, analysts are yet to come to a conclusion comparing Lyft’s actual results with the estimates as there are still uncertainties surrounding the coronavirus pandemic and a turn of events can occur at any time.

On Wednesday, CEO and co-founder of Lyft, Logan Green said that the Covid-19 indeed had a “profound impact” on Lyft’s customers and core business, during an earnings call. He also mentioned that in April rides were down nearly 75% year-over-year and until last week were still down 70%.

Green also gave an insight into how the company has managed to control costs in these trying times. Last Friday, Lyft cut its headcount by 17%. It laid off about 1,000 of its employees and furloughed nearly 300. It also slashed the pay of its remaining employees by 10% to 30%, and it will also withhold 30% of its board of director’s cash compensation during the second quarter of 2020.

The company also said on Wednesday that there would be no further need to reduce the workforce from now onwards. Lyft does not deny the fact that its Level 5 autonomous vehicle division way greatly affected by the layoffs. However, the company sees this as an opportunity to further invest in research and development of emerging self-driving technologies.

“Our investments in AV are critical to Lyft’s future and we expect they’ll deliver strong returns in the future despite COVID,” Green said. Experts are of the opinion that self-driving cars would greatly profit Lyft and other car-hailing businesses, on a long-term basis.

Another strategy the company has devised in controlling cost is to turn off “virtually all” ride coupons and stop spending on recruiting new drivers, until demand rebounds.

Lyft’s drivers are paid a significant portion of revenue, but the company is yet to generally provide its drivers with employee benefits like paid sick leave, especially drivers that are affected by the coronavirus.