Ride-hailing app Lyft will lay off 1,072 employees, roughly 26% of its corporate workforce, and won't hire for an additional 250 positions, the company said in an SEC filing Thursday. The news comes a week after a memo from new Lyft CEO David Risher confirmed that the company would trim its head count.
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Lyft began the year mired in the same ditch it ended in last year, with its ride-hailing service struggling to recover from a pandemic-driven downturn that triggered a change in leadership and layoffs that wiped out a quarter of its workforce.
It had laid off about 683 employees, or 13% of its then workforce, in November. Coming off pandemic lows, Uber and Lyft are locked in a battle for market share, and investors worry that Lyft's price cuts to avoid being a distant second in the North American ride-sharing market would squeeze its profit.
Uber dominates U.S. market shareBy April 2022, Uber sales exceeded their pre-pandemic levels and remained elevated throughout most months of 2022 and into 2023. Meanwhile, sales at Lyft are yet to reach their pre-pandemic levels as of July 2023.
Uber & Lyft SafetyWomen are especially at risk when it comes to experiencing sexual assault and harassment while using rideshare services. According to RAINN (Rape, Abuse, Incest National Network), about 90% of sexual assaults are reported by women.
There are lots of great ways to make money driving, including apps like Lyft and Uber. Many drivers choose Lyft because of the earnings, flexibility, and support. Lyft cares deeply about driver safety, and helps drivers set earnings goals within the app, score driver bonuses, and earn tips.
In our view, Lyft warrants a narrow economic moat and a stable moat trend rating, thanks to the network effect around its ride-sharing platform and intangible assets associated with riders, rides, and mapping data, which we think can drive Lyft to profitability and excess returns on invested capital.
On average, Uber paid its drivers about 6.2% more per hour than Lyftin 2022: $21.14 versus Lyft's $19.90, according to the ride-hailing business site Gridwise.
Lyft's 2022 revenue was $4.1 billion, up 28%, topping the $3.6 billion recorded in 2019, the last prepandemic year. But the stock has fallen 17% this year to a little over $9, just a smidgen above its all-time low.
As of 2022, Uber has a 71% share of sales in the U.S. rideshare market, whereas Lyft only has 29%. However, both have seen significant sales increases since 2021. As of January 2022, Uber's sales are up 84%, and Lyft sales are up 62% year-over-year.
Shares of Lyft plunged nearly 15% in after-hours trading Thursday following the earnings results. The latest earnings report comes on the heels of Lyft shaking up its the C-suite and announcing plans to cut 26% of its employees as it fights for market share and profitability.
Editor's note: Here's how this was originally reported by Bloomberg: Lyft Inc. isn't actively pursuing a sale but would be open to offers, Chief Executive Officer David Risher said in an interview on Bloomberg Television, appearing to soften his view from earlier this year about a potential transaction.
Lyft's top competitors include Cabify, Turo, and Blacklane. Cabify provides a mobility platform and ridesharing company, serving customers and drivers. Its services offer taxi cars with added features such as a choice of music, …
Lyft, Inc. is an American company offering mobility as a service, ride-hailing, vehicles for hire, motorized scooters, a bicycle-sharing system, rental cars, and food delivery in the United States and select cities in Canada.