After Argo AI announced shutting down its operations a few weeks ago, stocks of Lyft dropped. Based on their reported earnings for the past quarters, the company has still not reached its pre-pandemic level of sales.
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SAN FRANCISCO, CALIFORNIA - MARCH 11: The Lyft logo is displayed on a car on March 11, 2019 in San Francisco, California. On-demand transportation company Lyft has filed paperwork for its initial public offering that is expected to value the company at up to $25 billion.
SAN FRANCISCO, CALIFORNIA - MARCH 11: The Lyft logo is displayed on a car on March 11, 2019 in San Francisco, California. On-demand transportation company Lyft has filed paperwork for its initial public offering that is expected to value the company at up to $25 billion.
Lyft Stocks Drop
The stocks of Lyft Inc. fell by more than 15% in extended trading as the company reported during their Third Quarter Earnings Call. The company lost $135.7 Million as they were affected by the shutdown of autonomous vehicle company Argo AI a few weeks ago.
20.3 million active riders were reported by Lyft during this quarter, which is below the achievement of the company during 2019 basing 22.9 million active riders. Compared to the analysts' prediction of a $159.5 net loss, Bloomberg reported that Lyft posted a $422.2 million loss.
Lyft President John Zimmer that these numbers are just temporary as he remains confident with the company's future. He added, "I'm not concerned about inflation impacting our ride demand. I think we're going to continue to see that get healthier and healthier in the quarters ahead."
Competitors' State
Before the call, Lyft has been acknowledging its situation as it face challenging times. Just a few days ago, they stated that cutting 13% of their workforce is possible that will be affecting 700 people.
This announcement from the company was not a surprise as several companies are also experiencing the same challenges that they are facing right now because of the current state of the economy, interest rate hikes, and high inflation. These resulted to freeze hirings, mass layoffs, cut costs, and shutting down services.
For Lyft's competitor, Uber has already achieved its pre-pandemic levels. The company has also avoided wide layoffs as they take hiring on a more conservative stance. Reuters reported that Uber's success nowadays comes from a bigger portion of the rideshare market shares internationally and its food delivery business.
As per Uber Chief Executive Officer Dara Khosrowshahi, the company is also facing uncertainty with the economic outlook despite having good consumer spending on its platform. For its third-quarter revenue, Uber reported a total of $8.3 billion and $516 million of adjusted earnings.
Also Read: Uber Reports 72% Increase in Revenue, Net Loss of $1.2 Billion
Lyft and Argo AI
As TechCrunch reported, Lyft and Argo have been working together on several autonomous ride-hailing testing as they use the technology of Argo on the platform of Lyft. Last year, they launched public robotaxi services in Austin, Texas (September) and Miami, Florida (December). As of Lyft's spokesperson, the services are now discontinued.
Argo AI announced on October 27th that it will be shutting down its operations as the main backers of the company such as Ford and Volkswagen, have taken back their investments as they focus on near-term goals for their individual companies.
No plans were laid out by Lyft regarding adjustments to its AV strategy. But as per the report, the company signed a deal with Motional, an AV tech company, as they launch robotaxis in Las Vegas.
Related Article: Lyft: 60 Employees Face Expulsion, Adds to List of Tech Companies Lay Offs in This Time
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Written by Inno Flores
