Lyft Inc closed 2021 with its first full-year adjusted profit as customers eager to step out and travel paid a record amount for trips during the fourth quarter and more drivers returned to work, the ride-hailing company said on Tuesday.
Revenue per active rider jumped 13.5 percent to an average of nearly $ 52 in the quarter ended December 31 from the prior quarter at a time when prices in the United States for everything from toilet paper to gasoline also rose.
Lyft’s fourth-quarter revenue rose 70 percent to $ 969.9m from a year ago, beating analysts’ estimates of $ 940.1m, according to Refinitiv data.
The company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a measure that excludes one-time costs, primarily stock-based compensation, of $ 74.7m, slightly lower than the estimates of $ 75.59m.
Adjusted EBITDA for all of 2021 was $ 92.9m, marking the first time the company achieved its profitability target on a full-year basis.
On a net basis, Lyft still lost $ 1bn in 2021, although that was narrower than the $ 1.8bn loss of 2020.
The 2021 net loss included $ 756.1m in stock-based compensation and a roughly $ 250m charge for historical insurance liabilities.
Lyft President John Zimmer said the fourth-quarter price increase was largely due to more pricey airport rides, which more than doubled from the year prior.
“There was no major increase in our kind of base pricing, I think it’s more stemming from a different ride mix,” he told Reuters in an interview, with fewer riders commuting to work and more airport and leisure rides.
Nevertheless, Lyft never generated as much revenue per rider even in pre-pandemic times, and as customers return, Lyft and its larger rival Uber Technologies Inc discovered their surprising power to raise prices without alienating riders.
The average ride-hailing fare was about 19 percent higher on a per-mile basis in the fourth quarter of 2021 versus the same period in 2019 in the US, with fares increasing by as much as 34 percent in Seattle and 27 percent in Los Angeles , according to research firm YipitData.
Nevertheless, customers continued to return in the fourth quarter, with the number of riders increasing nearly 50 percent to 18.7 million compared to the year prior. Zimmer attributed a small dip in quarter-over-quarter ridership growth to seasonality and a less busy New Year’s Eve.
He said Lyft still had “plenty of headroom” before it reached pre-pandemic ridership numbers.
“There is a material amount before we get back to pre-pandemic levels,” Zimmer said.
Zimmer said the company noticed the impact of the Omicron coronavirus variant on ridership only towards the end of December, and more into January.
Drivers, many of whom gave up during the pandemic due to a lack of customers and safety concerns, also continued returning to the platform, Zimmer said.
“We saw much-improved conditions with drivers,” he said, adding that total active drivers in the fourth quarter were up 34 percent year over year.
The number of new drivers who never worked for Lyft previously increased 50 percent on an annual basis, Zimmer said, with the additional drivers allowing Lyft to improve its pick-up times and service levels.
The ongoing work-from-home trend, particularly on the US West Coast, and travel patterns shifting away from peak rush hours during the pandemic also proved beneficial, Zimmer said.
“The commute was never an ideal trip for us so and so the fact that the commute has changed will be an opportunity for us long term.”