Lyft jumps 17% on more riders in Q1 despite Coronavirus restrictions

Lyft Inc. (NASDAQ: LYFT) released its quarterly financial results on Wednesday that showed an increase in riders despite the Coronavirus driven restrictions on travel and transport in the U.S and pushed the company’s stock 17% higher in extended trading.

In the first quarter, the ride-hailing company saw a 3% annualized increase in active riders to 21.2 million. Much of the increase, however, was confined to early 2020 as CEO Logan Green highlighted a 75% year over year decline in rides in April. Lyft generated £36.43 of revenue per active rider in the recent quarter.

Lyft’s Q1 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £721.88 million in revenue in the first quarter. In terms of adjusted loss per share, they had estimated 50 pence. In its report on Wednesday, Lyft topped the estimate for revenue posting £772.57 million in Q1 but its loss widened to £1.06 per share in the recent quarter.

The quarterly losses, however, were significantly better than the same quarter last year when the company had seen £7.29 of adjusted loss per share. GAAP net losses, on the contrary, expanded in Q1 to £321.74 million versus £287.78 million in the fourth quarter.

In a bid to shore up finances amidst the health crisis, Lyft laid off 17% of its workforce last week and furloughed another 300 employees. The company’s non-hourly employees also saw a 10% to 30% cut on salaries. Lyft’s directors also agreed to slash their cash compensation by 30% in the second quarter.

To further improve its financial stature, Lyft is no longer recruiting new drivers at the moment and has suspended almost all ride coupons. The company, however, expressed confidence that it doesn’t see a need to further reduce its workforce anytime soon.

Lyft faces a lawsuit for wrongly classifying its drivers

While the layoff affected Lyft’s research and development division for autonomous vehicles that it calls Level 5, the CEO said that the company is committed to maintaining its investments in the self-driving technology.

Lyft is currently facing a lawsuit in California that alleges the company of wrongly classifying its drivers as contractors while the recently introduced gig economy law dictates them to be categorized as employees.

Including the surge in extended trading on Wednesday, Lyft is currently around 30% down year to date in the stock market. At the time of writing, the ride-hailing company is valued at £6.29 billion.