Lyft’s first quarter earnings show impact of coronavirus, but a rise in revenue

Lyft’s earnings didn’t fully reflect its coronavirus problems.

Angela Lang/CNET

The last few months have been shaky for Lyft. The ride-hailing giant’s business has been curbed by the coronavirus, and the company has responded with layoffs. On Tuesday, however, Lyft’s first-quarter earnings didn’t fully reflect those problems.

Lyft reported its revenue rose 23% since the same time last year to $995.7 million, beating analysts’ expectations of $897 million. The company posted a net loss of $398.1 million for the quarter, which was greater than expected but narrower than its losses in the previous quarter.

“While the COVID-19 pandemic poses a formidable challenge to our business, we are prepared to weather this crisis,” Lyft CEO Logan Green said in a statement. “We are responding to the pandemic with an aggressive cost reduction plan that will give us an even leaner expense structure and allow us to emerge stronger.”

The coronavirus shook the entire economy during the first quarter of the year, which ended on March 31. Most all companies saw an impact on their business as the virus took hold. But, companies in the travel and tourism industries, like Lyft, Uber, Airbnb, hotels and airlines, experienced a precipitous drop in business and their stock prices. Lyft saw its stock price drop 73% from $53 in mid-February to $14 by mid-March.

Unlike its rival Uber, which has diversified its business with several different offerings, Lyft has long touted itself as being solely focused on transportation. The strategy, which the company has recently reconsidered, has proven to be its Achilles’ heel during the coronavirus pandemic. It’s seen its volume of rides plummet because of shelter-in-place orders taking effect across the country.

In March, Lyft rolled out a series of new programs that weren’t explicitly focused on transportation, such as a pilot program for delivering medical supplies and test kits to senior citizens and other vulnerable populations. It also piloted a meal delivery program and partnered with Amazon to provide the retail giant with delivery drivers.

With these new endeavors, Lyft has positioned itself as “essential” during the crisis.

“We know Lyft can be a critical lifeline for communities in need,” Lyft wrote in a March 20 blog post. “Right now, Lyft drivers are playing a vital role connecting people with essential services and goods — getting riders to grocery stores and pharmacies, doctors and nurses to work, and caretakers to family members in need.”

Still, it’s unclear how much these measures are helping the company. Last week, Lyft announced it was laying off 17% of its staff, a total of 982 employees, and furloughing another 288 people. On Wednesday, Uber said it was also cutting its workforce by 14%, letting go of 3,700 employees.