Lyft (LYFT) CEO David Risher says his ride-hailing company is beyond the initial turnaround phase — now investors need to take notice.
The company is in a “different stage” from when he took over as CEO in mid-2023, Risher told Yahoo Finance at the Goldman Sachs Communacopia & Technology Conference on Tuesday (video above).
Risher, a board member at Lyft since 2021, moved quickly at the helm to slash costs via sweeping layoffs and a refocus on purely ride-hailing.
“And now the question is kind of where do you go from here? And I’m just super excited about our next couple of years. I think we’ve got a huge opportunity ahead of us,” Risher says.
Risher intends to focus on Lyft’s tech stack to make it even easier for people to hail a ride, and at the best prices possible.
The company’s second quarter earnings released just a few weeks ago was a tale of two stories.
For starters, Risher’s turnaround efforts appear to be sprouting in areas such as the number of drivers on the platform, trips, and profits.
Gross bookings rose 17% from the prior year. Total revenue increased 41%. And the company notched net income of $5 million compared to a $114.3 million loss a year ago.
Active riders hit an all-time high for Lyft at 23.7 million, up 10% year over year.
But Lyft’s guidance caught a few on the Street off guard following an upbeat investor day in early June.
The company guided to third quarter gross bookings growth of 13% to 15%. That’s below the 15% compound annual growth rate Lyft shared at its investor day, which encompassed the 2024-2027 time period.
“Recent moves by the new management team to price more competitively with Uber are weighing on revenue growth and profitability through lower revenue per ride, while costs per ride are impacted by insurance renewals,” JP Morgan analyst Doug Anmuth said in a recent client note.
“We remain on the sidelines and want to see a few quarters of consistent performance and margin improvement, along with the new long-term margin targets before getting more constructive.”
Investors have expressed their uncertainty in Lyft’s future: Lyft’s stock is down 7% in the past year compared to a 50% gain for rival Uber (UBER).
Risher isn’t turning a blind eye to the relative underperformance of the stock.
“I think part of it is just sort of macroeconomic concerns about the consumer,” Risher explained, adding there has been some consumer weakness but not enough to give him concern.
“I think also there’s a lot of interest in the world and what happens in the world of autonomous vehicles and whether that’s going to be good for us or bad for us. I think it’s going to be great for us. I think it’s going to bring new supply and frankly, bring an experience onto the platform that a lot of people will find pretty cool.”
Three times each week, I field insight-filled conversations with the biggest names in business and markets on Yahoo Finance’s Opening Bid podcast. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
In the Opening Bid episode below, Tesla (TSLA) investor Alexandra Merz explains why she is bullish on the company’s robotaxi plans.
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
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