(Reuters) – Lyft Inc said on Wednesday that cost cuts put the company on the right track to reach its target of becoming profitable on an adjusted basis by the end of 2021, even though its second-quarter revenue tumbled 61% due to coronavirus-related restrictions.
FILE PHOTO: Lift
In a post-revenue call, executives said the company would be forced to suspend operations in California on a preliminary ban preventing it from classifying drivers as independent contractors coming into effect on August 21.
Major rival Uber Technologies Inc has also repeated similar problems.
Lyft said that the number of active riders fell by 60% to 8.69 million during the second quarter, but added that it is encouraged by the recovery trends.
“We saw a decline in demand during the second quarter and have seen further evidence of this trend since the end of the second quarter. Rideshare rides in July were 78% larger than April, ”says CEO Logan Green.
Uber last week said while its gross booking decreased by 75% overall in the second quarter, bookings in some regions outside the US exceeded levels before COVID-19.
Unlike Uber, which operates in 69 countries, Lyft only offers rides in the United States and Canada.
This region is the largest market for both companies, but it is still among the hardest hit by the health crisis, with business travel and travel still across the United States.
Lift’s quarterly revenue fell to $ 339.3 million, while adjusted EBITDA loss of $ 280.3 million was less than its previous estimate of a loss of $ 325 million.
In April, the company announced wage cuts and laid off nearly 1,000 employees, or 17% of the workforce, in an effort to reduce costs.
Lifting also remains completely dependent on consumers’ demand for rides, shared bicycle and snowmobile trips, while Uber has expanded its food delivery service Uber Eats during the pandemic.
Reporting by Tina Bellon in New York and Munsif Vengattil in Bengaluru; Additional reporting by Akanksha Rana; Editing by Sriraj Kalluvila