Lyft’s losses continue, but it raises outlook

Lyft warned earlier this year that it would lose record amounts of money as it expanded its business.

But on Wednesday, the San Francisco ridehailing company walked that prediction back.

With its number of ridehailing passengers growing and its trip commissions also increasing, Lyft said its revenue for the year would be better than it had expected, rising to a range of $3.47 billion to $3.5 billion. That growth would also help crimp its losses, Lyft said, with its expected adjusted losses totaling around $875 million for the year instead of a previous projection of $1.17 billion.

“We anticipate 2019 losses to be better than previously expected and we are pleased to have updated our outlook,” CEO Logan Green, a cofounder of Lyft, said in a state

ment.

Yet the improved prospects do not mean that Lyft was close to making a profit. For the second quarter, Lyft said it lost $644.2 million, far more than the $178.9 million it lost a year earlier. A large chunk of that loss — about $296.6 million — was because of expenses related to the stock compensation that Lyft pays its employees. Revenue rose 72% from a year ago, to $867.3 million.

In an interview, Chief Financial Officer Brian Roberts said that the company’s fierce price war with Uber had abated, allowing it to cut back on the amount it spends on discounted rides. Lyft also has trimmed its sales and marketing spending by nearly in half since last year, he said.

In the most recent quarter, the company said it cut that spending even further. That was a “mikedrop moment” for Lyft and would be “music to Wall Street,” he said. ”We want to win on brand preference and customer experience, not on coupons. We are trying to drive profitable growth, not growth at all costs.”

Lyft’s financial performance has been in the spotlight since it went public in March. Ridehailing is a costly business because providers continually pay large sums to recruit drivers and passengers. As investors questioned whether Lyft could turn a profit, its shares stumbled quickly after its initial public offering, sliding below their offering price of $72.

In May, Roberts had said that 2019 would be the height of Lyft’s losses as it invested in its bicycle and scooter businesses, maintenance centers for drivers and the development of selfdriving cars.

Lyft’s earnings follow a management change at the company. Its chief operating officer, Jon McNeill, announced his departure last week and Lyft said it would not fill the role.

Lyft and Uber are facing regulatory challenges in California, where a bill in the Legislature could force them to treat drivers as employees rather than independent contractors. A change in the employment status of drivers would be costly to Lyft and could tempt lawmakers in other states to draft similar laws.

“This is still a category that investors approach a little warily because of how dynamic and fastmoving it is,” said Tom White, a senior vice president at the financial firm D.A. Davidson.

Uber reports its quarterly earnings on Thursday.