Despite a difficult Q2 2020, Lyft and Uber reiterate profit promises

Lyft is sticking to its previous target to hit quarterly adjusted profitability by the fourth period of 2021, a milestone it says it can achieve even with fewer rides.

The company reiterated its quarterly adjusted profit target timeline — a milestone based on earnings before interest, taxes, depreciation and amortization — during its second-quarter earnings call yesterday. Upholding the target in this uncertain era of COVID-19 is newsworthy on its own. But what caught our attention was Lyft’s claim that it would hit this milestone even at a lower ridership than it had previously targeted.

“We now expect we can achieve adjusted EBITDA profitability with 20% to 25% fewer rides than what was assumed when we initially disclosed this last year,” Lyft CEO Logan Green said during the call.

Quarterly rides will need to be about 5% to 10% above the level achieved in the fourth quarter of 2019, according to CFO Brian Roberts. Lyft had 22.9 million rides in Q4 2019. That means Lyft needs to reach about 25 million rides a quarter to hit that target next year.

The COVID-19 pandemic crushed Lyft’s ridership in the second quarter of 2020, with total rides falling from 21.2 million in the first quarter of the year to about 8.6 million in the second quarter. But Lyft’s executive team said rides continued to recover from the doldrums of this spring and early summer. Ridership will need to continue to recover, but the company insists that measures it has taken will allow it to reach profitability.

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