Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lyft Inc (LYFT, Financial) achieved all-time highs in rides, riders, and driver hours in 2024, marking its strongest position ever.
- The company reported its first-ever year of GAAP profitability and positive free cash flow for the full year.
- Lyft Inc (LYFT) saw a significant improvement in driver retention and earnings, with drivers collectively earning nearly $9 billion in 2024.
- The introduction of features like price lock and reduced surge pricing led to riders saving over $400 million in 2024.
- Lyft Inc (LYFT) expanded its high-margin offerings, such as Lyft Black and Lyft SUV, which grew 41% year over year.
Negative Points
- Lyft Inc (LYFT) experienced lower pricing dynamics in the US market starting late in the fourth quarter, impacting gross bookings growth.
- The company's partnership with Delta is ending in April 2025, which is expected to impact rides and gross bookings growth.
- There is a concern about the sustainability of lower pricing and its potential impact on gross margins in 2025.
- Lyft Inc (LYFT) faces competition from new market entrants like Waymo, which could affect market dynamics in key cities.
- The company anticipates a low single-digit percentage point impact on gross bookings if the lower pricing environment persists.
Q & A Highlights
Q: Can you provide more details on the factors affecting the Q1 gross bookings outlook? Is it due to downward pressure or moderating increases compared to recent years?
A: Our pricing strategy is to remain competitive and reliable. Recently, we've seen lower prices across the US, which led us to adjust base prices and increase couponing to maintain marketplace balance. Despite this, we achieved strong rides growth and profitability. In January, rides growth was in the high teens, supported by strong active rider growth and frequency. However, our price per mile was at its lowest in five quarters, reflecting the competitive pricing environment.
Q: How is Lyft responding to new market entrants like Waymo, and how confident are you in maintaining take rates and gross margins despite lower pricing?
A: In markets like San Francisco and Phoenix, where Waymo operates, our market share remains stable or even grows faster than the national average. This suggests that AVs might be expanding the market rather than taking our share. We are confident in maintaining margins through various strategies, including expanding higher-margin offerings like Lyft Black and Lyft SUV, and growing our media business.
Q: Can you discuss the state of driver supply and preferences for Lyft, and how you plan to continue improving this in 2025?
A: We've achieved a 16-point preference gap over our largest competitor by focusing on driver satisfaction through initiatives like the 70% earnings guarantee and partnerships for skill-building. This has improved driver retention and reduced acquisition costs. In 2025, we plan to introduce a driver rewards program to further enhance driver loyalty and service quality.
Q: Could you elaborate on the Marubeni and Mobileye partnership and the technical breakthroughs that improved your ETAs?
A: The partnership with Marubeni involves financing and fleet operations for AVs, starting in Dallas with plans to expand. This complements our existing AV tech partnerships. Our technical breakthroughs in reducing ETAs involve smart demand prediction, driver incentives, and reducing driver cancellations, which collectively improve pickup times and service reliability.
Q: What is the expected contribution from price lock and advertising revenue in 2025?
A: We exited 2024 with a $50 million annualized run rate for our media business and expect to reach $100 million by the end of 2025. Price lock has been well-received, with 1.6 million rides so far, and we continue to expand its availability. While we haven't disclosed specific financials for price lock, it is largely incremental and contributes to rider loyalty.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
