The ridesharing companies have also been keen on expanding themselves in New York City. However, the companies experienced a flat trip growth in October 2019. This turned out to be a major concern for Lyft as NYC is its largest market and likely most profitable market. The trip lost could lower the top-line growth for Lyft.
Lyft’s revenue growth will be benefited by price increases, higher take rates, and market share gains from competitors and traditional taxis. However, cheap prices, which is the ridesharing companies’ best strategy for customer acquisition, could lower the top-line growth.
The company has been struggling in lowering costs and raising prices for cashing in from the strong customer base and proven demand for its services. Also, the company has been facing concerns from continual discounting that will shrink its product, and growth through market share that does not assure profitability.
For the third quarter, Lyft reported a narrower loss helped by higher revenue. The company said its continued focus on consumer transportation is yielding meaningful improvements in monetization and strong operating leverage. During the quarter, the company reported a 28% increase in active riders to 22.3 million. Revenue per active rider increased by 27% to $42.82.
Meanwhile, investors turned positive on the long term outlook as the company expects to become profitable within the next 18-24 months. Also, the company’s strategy of investing in its products could yield better returns in the future. Lyft has been an aggressive player and working to capture a substantial share of the $700 billion profit pool.
The company has been eying on the autonomous driving technology for profitability in the automobile industry. The stock is likely to make a lackluster run till it achieves profitability or unveils any new strategy for attracting customers.