MW Lyft rolls out buyback, but outlook for key demand metric comes up short

By Bill Peters

CEO says Lyft is 'in advanced discussions' with partners on autonomous vehicles. Board OKs stock repurchase of up to $500 million.

Ride-hailing platform Lyft Inc. on Tuesday rolled out a new buyback program, but its forecast for a key demand metric came in below Wall Street's expectations, as it tries to stay competitive with rival Uber Technologies Inc. on prices and service.

Lyft $(LYFT)$ said it expected first-quarter gross bookings, which measure what the company charges customers for rides and other services, of around $4.05 billion to $4.2 billion, a bit below Wall Street's expectations for $4.24 billion. In its earnings release, the company noted "the recent pricing environment in the U.S. market."

For the fourth quarter, Lyft had $4.28 billion in gross bookings, a 15% jump year over year but shy of FactSet forecasts for $4.32 billion. It had revenue of $1.55 billion, just below analysts' forecasts for $1.56 billion. Lyft earned 15 cents a share on a GAAP basis. Wall Street forecast a one-cent per-share loss.

The company said its board had authorized the repurchase of up to $500 million worth of its stock.

Shares sank 10% after hours on Tuesday.

Lyft reported the results as it starts to produce positive free cash flow and as it tries to improve profitability. Rides, active riders and service speeds improved during the quarter.

Still, shares for Uber $(UBER)$ fell last week after its own gross-bookings outlook came up short. Analysts pointed to things like foreign exchange and the impact from harsher weather and natural disasters, like the fires in Los Angeles last month.

Meanwhile, Wall Street has become more focused on the ride-hailing industry's plans to bring more autonomous vehicles into its car fleets.

"We're in advanced discussions with a number of other partners," Lyft Chief Executive David Risher said in a statement to MarketWatch. "The AV future will have many players across the value chain, including several emerging behind the scenes."

He added: "We believe the more AVs, the more the rideshare market expands and the better Lyft does."

Risher, in a post on X on Monday, said the company was planning to make autonomous vehicles available for rides in Dallas as soon as 2026. Those cars would be owned by Japan-based Marubeni - which among many other things manages vehicle fleets - and outfitted with self-driving technology from Mobileye Global Inc. (MBLY).

The ride-sharing company said it planned to expand those services to other cities in the months ahead. Lyft announced a partnership with Mobileye in November.

Last week, Lyft said it was joining forces with the artificial-intelligence company Anthropic, and said it had incorporated Anthropic's AI assistant Claude into customer-support services. Lyft said the collaboration would help it develop more AI technology elsewhere.

BofA analysts, in a research note last month, said they expected gig-economy and autonomous-vehicle companies to benefit under new U.S. Transportation Secretary Sean Duffy, who has proposed a federal-level law to govern those businesses rather than a state-by-state patchwork.

Uber Chief Executive Dara Khosrowshahi, said during last week's earnings call it could take some time before financial gains from autonomous-vehicle technology take hold, and that "many, many more players" were likely to emerge.

But he said autonomous vehicles would require clear regulations, strong safety and service standards, and cheaper hardware.

"There are national regulations, state regulations, city regulations, it's pretty complicated," he said. "Obviously, regulators have to get comfortable with this new technology on the streets affecting our every day."

"Second, in order to get regulators comfortable, we think you need a consistently superhuman safety record," he continued. "We don't think it's good enough for an autonomous driver to be better than a human. I think we have the chance to be multiple times better than a human."

-Bill Peters

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February 11, 2025 16:19 ET (21:19 GMT)

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