Has Lyft able to make a comeback after the pandemic? Let us take a rundown of the business
Lyft is one of the biggest global ride-hail platforms available, with more than 22 million active riders each quarter prior to the pandemic.
Since the rollout of the vaccines, ridership was able to, bit by bit, recover as more people are going outside. However, what ridership is facing now would be an uncertain future due to possible consumer habit change.
Lyft technically jumped this year as Lyft stocks continued to soar. The earnings that Lyft are experiencing started right when the recovery gained steam. Their Q1 earnings report reflected that they beat estimates by a large margin thanks to the revitalizing demand for ridership. Lyft stock cited that their adjusted loss for Q1 is 35 cents per share with a revenue of $609 million, compared to the analyst's prediction of 60 cents per share and a revenue of $558.2.
Even the number of active riders exceeded the expectations, plus the company believes that as long as the recovery continues, Lyft is bound to bounce back and deliver stronger financial results.
Companies such as Lyft often face regulatory pressure due to the nature of the business. However, they recently got a win after voters from California passed a regulation called Proposition 22 way back on the elections in November 2020. Originally, California enforced AB5, a labour law that focuses on ride-sharing platforms.
This law mandates that companies such as Lyft had to make the independent contracts as full-time employees with all the benefits associated to it. This almost broke the balance for Lyft and the other ride-sharing platforms. But came the election day, the voters rolled back the changes and chose to approve Proposition 22 instead, which allows the independent contractors to keep their status.
Although the changes brought by the economic recovery shows a positive impact on Lyft, analysts still say that the ride-hail platform is bound to keep losing money for a while as it is impossible to immediately remove all restrictions due to the pandemic.
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