Lyft Inc. has reported an adjusted profit for Q3 2021 after the challenging year of COVID-related cost cuts pays off while more riders, as well as drivers, return to the company’s ride-hailing platform.
According to Lyft President John Zimmer, airport rides have tripled from a year ago, with an 11% surge in active riders, now accounting for 18.9 million as of the quarter that ended in September.
Lyft’s recovering earnings show that consumers have been traveling again after being stranded at home for more than a year, indicating a larger economic rebound for the United States.
Even the company’s shares rose 4% after the closing at 2.3%, marking it as profitable for the second time in its history of nine years.
Lyft reported USD 67.3 million in adjusted earnings before interest, taxes, depreciation, and amortization, which excludes one-time charges such as stock-based compensation. In total, Lyft's third-quarter revenue increased 73% year-over-year to USD 864.4 million, exceeding the Wall Street estimation of USD 862.68 million.
It has been observed that Lyft’s revenue jumped by 13% since the previous quarter, while total expenses and costs increased by only 4%, indicating that Lyft is keeping its pledge to minimize both fixed and variable costs.
Lyft's contribution margin, which measures profitability excluding the variable costs, hit a new high of around59.4%. Meanwhile, the net loss fell to USD 71.5 million, or 21 cents per share, from USD 459.5 million, or USD 1.46 per share last year, although Zimmer refused to say when the firm will aim for net profit.
Notably, as the pandemic has created new jobs at Amazon's warehouses, Instacart's grocery services, and restaurant delivery, Lyft and Uber have been investing significantly to entice more drivers with larger incentives.