By Akash Sriram
(Reuters) – Lyft forecast current-quarter core earnings above analysts’ estimates and reported better-than-expected third-quarter revenue on Wednesday, helped by workers returning to office and a higher number of airport rides.
Though Lyft only commands about 29% of the ride-hailing market as of September, its share has increased this year from 27% in January after it said it will price its rides competitively with larger rival Uber.
“While operating from a more efficient cost structure is certainly part of our formula, it is by no means the only part of the margin expansion equation,” Chief Financial Officer Erin Brewer told Reuters.
Brewer added that an improved mix of airport rides, scheduled rides and priority pickups also helped margin expansion.
Lyft forecast current-quarter adjusted core profit, a key profitability metric closely watched by investors, of $50 million-$60 million, higher than expectations of $48.8 million.
Despite Uber’s dominance, analysts and investors have maintained Lyft will remain a strong second player in the sector.
Lower prices helped Lyft serve 22.4 million active riders, which jumped 10% compared with a year earlier.
Uber on Tuesday predicted a strong holiday season after a third quarter that was impacted by accounting changes.
Since CEO David Risher took the top job at Lyft, the company has looked to cut costs aggressively. It posted higher core earnings in the second quarter and forecast further profitability improvement.
“We price in line with the market, that’s the strategy, pure and simple and we don’t see any gigantic price pressure one way or the other over the coming quarter,” CEO David Risher told Reuters.
Lyft said it expects fourth-quarter revenue to grow in mid-single-digits sequentially, compared with market expectation of 4.6% growth, according to Reuters calculations.
Revenue grew 10% to $1.16 billion in the quarter ended Sept. 30, surpassing analysts’ average estimate of $1.14 billion, according to LSEG data.
Lyft’s adjusted core earnings of $92 million in the third quarter topped expectations of $82.6 million.
(Reporting by Akash Sriram in Bengaluru; Editing by Krishna Chandra Eluri)
