A traveler wearing a protective mask expects to place a suitcase in the back of the car for sharing the trip displaying Lyft signals at San Francisco International Airport on Monday, May 4, 2020.
Paul Morris | Bloomberg through Getty Images
Lyft just reported second-quarter revenue, including a 61% drop in revenue over the same period last year, but a glimmer of hope for its core business hailed with monthly trips rising 78% in July, compared to April.
Lyft president and co-founder John Zimmer said in a earnings call Wednesday that the company may need to suspend its operations in California if a court does not overturn its final decision, which requires the company and its rivals , Uber, to classify executives as qualified employees for benefits, rather than independent contractors. The greeting companies have about a week left to appeal the pre-order.
Here’s how the company did against Wall Street expectations for the period ending June 30, 2020:
- Loss per share: 86 cents, adjusted versus the expected 99 cents, adjusted, according to analysts surveyed by Refinitiv.
- Income: $ 339 million, versus the $ 337 million expected for Refinitiv.
- Active riders: 8.7 million
- Income for active riders: $ 39.06
Analysts’ estimates ranged from losses of 50 cents a share to $ 1.15 a share, adjusted, for Lyft, and $ 269.5 million to $ 572.7 million for quarterly earnings.
Shares rose up to 6% in the news.
Net losses for Lyft totaled $ 437.1 million in the second quarter, compared to $ 644.2 million in the same period last year.
The company did not provide detailed guidance, but said it is on track to achieve adjusted profitability during the fourth quarter of next year. He expects to become profitable with 20% to 25% fewer trips than he had predicted since October 2019.
Lyft makes money through travel greeting, sharing scooters and bicycles, and his relatively new car rental business. Unlike its main competitor, Uber, the company does not have a food delivery, freight or overseas investment and operations to help it offset losses in travel and transportation.
To test drivers and riders feel comfortable with the ride greeting again, despite Covid-19’s insistence in the US, Lyft made it a requirement for motorcyclists and drivers to wear a mask during trips starting in May, and after in addition they started distributing masks and hand sanitizers to drivers. Last month, the company announced it was distributing tens of thousands of vehicle-sharing shields to its top drivers as a protection against the new coronavirus. Now, the company also sells its protective barriers to drivers who want them.
But California state regulators want Lyft to do even more for drivers – treat them as employees rather than independently.
On Monday, a California court issued a preliminary injunction requiring Uber and Lyft to classify drivers as full-time employees in the state, at least pending further action by the court. Doing so would mean that drivers would be eligible for benefits like health insurance, paid sick leave and more. Travel greeting companies requested a brief stay during the appeal process, and now they have until August 20 to make that change.
Uber CEO Dara Khosrowshahi said in an interview with MSNBC on Wednesday that the company may have to suspend service in California if the court does not overturn the decision.
Lyft and Uber are facing numerous lawsuits in the US for false allegations of driver misclassification and pay theft. They have previously treated drivers strictly as independent contractors. Like others in the “concert economy”, Uber and Lyft have argued that workers want freedom and flexibility they cannot get if they are classified as employees.
Critics including UC Hastings employment law professor Veena Dubal say a desire for flexibility should not be confused with a desire to remain an independent contractor. Interviewing drivers, Dubal found that they crushed many employee benefits, even after fearing how companies (including Uber, Lyft and others) might behave like employers.
This story is unfolding.