Lyft executives conceded on Wednesday evening they see a “clear path to profitability” — and to hit that goal sooner rather than latter, consumers will have to bear the brunt.
The money-losing ride-hailing outfit told analysts on a conference call it has recently hiked prices by undisclosed amounts — and undisclosed cities — in an effort to reinvest in its business. A spokesperson for Lyft didn’t immediately return a request by Yahoo Finance for comment on the extent of the price hikes or locations.
“In terms of the future, what I would say is we made modest price adjustments that went live towards the end of June, and we really began to adjust prices on select routes and in select markets based on cost and demand elasticities. And we tried to pick routes and cities where the demand impact would be the smallest,” Lyft Chief Financial Officer Brian Roberts said on the call.
“And as I mentioned, we believe these price adjustments reflect an industry trend,” Roberts said. “So, we expect that both the mix shift as well as the price adjustments will increase revenue per Active Rider in Q3 and in Q4.”
Solid quarterly results
With Lyft hyping momentum in its business coming out of the second quarter, why not try to see if the platform has more pricing power.
Lyft shares popped 6% in pre-market trading Thursday after the company beat on second quarter revenue and earnings estimates. Second quarter revenue came in at $867.3 million versus forecasts for $809.35 million. The company lost 68 cents a share versus estimates for a loss of $1.00.
Active riders tallied 21.81 million, ahead of estimates for 21.34 million.
Lyft apparently doesn’t see consumers balking at the price hikes.
The company revised its full-year EBITDA loss estimate to $850 to $875 million from $1.15 billion to $1.175 billion. Full-year sales are now seen in the $3.47 billion to $3.5 billion range versus $3.275 billion to $3.3 billion previously.