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Lyft soars as company charts a path out of the pandemic

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Lyft Inc shares soared more than 13% in extended trading on Tuesday after the company reported an adjusted profit for the third quarter and outlined a path to sustained profitability on the back of drastic cost cuts and a return of riders and drivers.

Lyft’s leaner cost structure allowed it to increase ridership without incurring rising expenses and executives said they targeted even higher adjusted profit in the fourth quarter, outlining their conviction for a continued recovery from a bruising pandemic.

Rides to airports, which are among the most profitable routes, nearly tripled from a year ago, executives said on an earnings call with analysts, in a sign of a broader U.S. economic recovery.

Shares of larger rival Uber Technologies Inc, which will report results on Thursday after the bell, rose 7% in after-market trading following Lyft’s release. Uber has said it expects to break even on an adjusted EBITDA basis for the first time.

Overall, Lyft’s active riders increased 11% to 18.9 million in the quarter ended Sept. 30. But ridership remains 35% below peak levels before the pandemic, with Lyft executives saying many consumers were waiting for COVID-19 vaccine booster shots or were hesitant to travel with unvaccinated children.

The company also said business travel to offices had not yet resumed, with workers particularly on the U.S. West Coast continuing to work from home. But executives said they were hopeful office workers would return in the first half of 2022.

“It’s a matter of when, not if,” Chief Financial Officer Brian Roberts said.

According to the California-based company’s own measure, Lyft was profitable for the second consecutive time in its nine-year history.

Lyft reported adjusted earnings before interest, taxes, depreciation and amortization, a measure that excludes one-time costs, primarily stock-based compensation, of $67.3 million. The metric came in significantly ahead of a Wall Street estimate for $30.7 million, according to Refinitiv data.

Lyft said it expected adjusted EBITDA of between $70 million and $75 million in the fourth quarter.

Overall, Lyft’s third-quarter revenue rose about 73% on a yearly basis to $864.4 million, beating the Wall Street estimate of $862.68 million, according to Refinitiv IBES data.

Revenue increased around 13% from last quarter, while total costs and expenses grew only 4% from the second quarter in a sign that Lyft is making do on its promise to cut both fixed and variable costs. Lyft’s contribution margin, indicating the company’s profitability excluding variable costs, rose to a record 59.4%.

Lyft’s net loss narrowed to $71.5 million, or 21 cents per share, from $459.5 million, or $1.46 per share last year, but President John Zimmer declined to say whether or when the company would target net profit.

The company posted surprise adjusted earnings per share of 5 cents in the quarter compared with a loss of 3 cents expected by Wall Street.

Lyft said driver supply was up 45% compared with last year, but did not share how far off driver numbers remained from pre-pandemic levels.

Zimmer said in an interview with Reuters that drivers were feeling safer thanks to the availability of COVID-19 vaccines and were returning to the road in greater numbers after enhanced federal unemployment payments ended in September.

“We’re seeing the right things happening in the market and will begin to taper incentives in the quarter ahead,” he said.

Lyft and Uber have been spending heavily to lure drivers with big incentives as the pandemic opened up new jobs at Amazon.com Inc’s warehouses, Instacart’s grocery services and restaurant deliveries.

But Zimmer said most ride-hail drivers worked on the platform part-time as a way to supplement income from other jobs, enjoying the flexibility provided by gig work.

“I feel very good about the supply conditions, and our ability to compete in the marketplace for talent, given the type of work and earnings that we offer,” he said.

 

(Reporting by Tina Bellon in Austin, Texas, and Nivedita Balu in Bangaluru; Editing by Matthew Lewis)

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Carry On Canadian Business. Carry On!

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Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

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Imperial to cut prices in NWT community after low river prevented resupply by barges

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NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

The Canadian Press. All rights reserved.

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U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

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TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

The Canadian Press. All rights reserved.

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