Lyft announced that drivers will abandon food delivery applications and return to travel sharing when they end up blocking passenger demand, saying drivers have lost the “significant companionship and interactions” that transporting people rather than food.
The company’s recent earnings – unlike its Uber rivals, it has no food distribution app – has shown that it has continued to struggle to attract drivers.
John Zimmer, president and founder of Lyft, said the demand for cyclists has exceeded available drivers since the end of February – Ubera also had a problem. It has announced a $ 250 million “stimulus” payment for drivers last month.
But he said the expiration of federal unemployment benefits in the third quarter would also help solve the problem, which would lead to a return to normal life due to the widespread expansion of vaccines.
Zimmer argued that as demand returned, shared travel was a better deal than delivering food to employees, adding that “Rideshare also offers a fundamentally different experience, especially with the lack of social interactions in food distribution.
“After a year of social distance, drivers tell us they are eager to have conversations. They lose the significant support and interactions they have when using Lyft,” he said.
Lyft said consumers are willing to pay higher prices, offsetting the cost of incentives for drivers to return to the road.
The number of passengers using the platform rose by 8% in the first quarter of 2021 compared to the previous three months, although pilots and revenue fell by more than a third from pre-pandemic levels.
In the January-March period, Lyft had revenue of $ 609 million, 36% less than the same period last year, but Wall Street is stronger than estimates of $ 558 million, according to FactSet.
Lyft’s net losses in the quarter came in worse than expected at $ 320 million in expectations, according to Capital IQ estimates, even though the loss was more than $ 300 million in one-time payments, Lyft said. It included $ 180.7 million in stock compensation related to the public offering in early 2019.
The company’s adjusted Ebitda loss was $ 73 million, a big improvement from what analysts expected at $ 139 million, and the lowest Ebitda loss since the company went public.
The company’s goal of achieving Ebitda profitability in the second half of this year is to rebalance the supply of drivers for pilots.
The company said the current imbalance has led to an increase in profits in April for returning drivers, with an average hourly earnings of $ 30 per hour, before spending, in the top 25 markets.
Lyft’s share price rose more than 5 percent in after-hours trading.