Lyft, which operates in 300 cities in the United States and Canada, said its active rider customer base grew to 22.3 million, up 28% from a year ago. Its revenue surged about 63% to $955.6 million in the third quarter ended Sept. 30, beating analyst expectations.
The loss-making company and its larger rival Uber Technologies Inc have historically relied on heavy subsidies to attract riders. But both companies are also spending to expand into other areas.
Insurance expenses account for roughly half of Lyft’s costs.
Lyft, in which Japanese internet firm Rakuten Inc is a significant shareholder, on average earned $42.82 in third-quarter revenue from each rider. Its sales and marketing expenses as a percentage of revenue decreased to 16%, down from 41% last year.
“We expect that these market conditions will continue as the industry focuses on achieving profitability,” Chief Financial Officer Brian Roberts said during a Wednesday call with analyst.
Profit in 2021
Lyft Chief Executive Logan Green earlier this month said the company expected to be profitable on an adjusted EBITDA basis in the fourth quarter of 2021, one year ahead of market expectations.
Analysts welcomed the guidance. James Cordwell at Atlantic Equities said the Lyft news increases confidence that profitability for Uber’s ridesharing business is also “a very imminent prospect.”
Nevertheless, third-quarter costs increased by 70% year-over-year, as Lyft reported a $463.5 million net loss, or a $1.57 per share.
Shares of Lyft were up about 1% at $44.90 in after-hours trading. Investors overall have become more picky in recent months, as Wall Street shows waning patience for money-losing former unicorn startups.
Lyft has launched new initiatives and partnered with several companies as it battles Uber for a bigger share of the ride-hailing market.
The company hopes to become a one-stop mobility shop for passengers seeking to commute via ride-hailing, public transport, bike and electric scooter sharing, recently announcing changes to its app that display all transportation methods.
CEO Green during Wednesday’s call repeatedly said his company remained focused on transportation alone.
“We’re not doing food, we’re not doing trucking, we’re 100% focused on mobility,” Green said in an apparent dig at o rival Uber, which is expanding in food delivery and autonomous trucking development.
Lyft instead hopes to generate more revenue through its electric scooter and bike shares, available in 20 and eight U.S. cities, respectively. CFO Roberts on Wednesday said winter weather would lead to a $10 million fourth-quarter revenue reduction in those segments, however.