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Lyft and Uber Are Moving From Cage-Match to Comfortable Duopoly
The arch-rivals must join forces to survive
It looked like everything was finally coming together for Lyft: After years of bare-knuckled competition with Uber, rising losses, constant struggles with regulators, then a rocky IPO, it had finally gotten on track. “Profitable growth” over growth at all costs was the new management mantra, and the company even had a target: breakeven, at least by its adjusted EBITDA yardstick, as soon as the last quarter of 2021.
And then the coronavirus hit.
Revenue promptly fell off a cliff: By early April, spending on Lyft and Uber was down by half, and the drop in demand continued, with ridership falling by roughly 70%. Lyft cut 17% of its workforce, furloughed another 5%, and cut salaries by 10% to 30% while Uber announced it would be laying off 3,700 employees, or 14% of its workforce.
Last Wednesday, Lyft reported earnings for Q1 2020, reporting losses of $398.1 million and revenues of $955.7 million, up 23% from last year. Lyft also achieved a record-high revenue per active rider in the first quarter of $45.06, up 19%, year over year. The company still grew during the quarter overall but said rides plummeted in April and are only slowly recovering with uncertainty looming ahead. The following…
