Lyft Shares Slide After Disappointing Revenue and Ridership Numbers

The ride-sharing company ended the quarter with 20.31 million riders, short of analysts’ prediction of 21.3 million, and still below the 23 million it had in the quarter before the pandemic struck. Rival

Uber Technologies Inc.

UBER -2.47%

said last week that its rider count had bounced back to prepandemic levels. 

“We’ll always want more demand,” Lyft co-founder and President

John Zimmer

said in an interview. “We had a tough few years and the hardest part should be behind us,” he added.

The company’s shares fell more than 13% in after-hours trading after it announced its quarterly results.

Lyft’s weak ridership numbers offset stronger-than-expected adjusted earnings as well as higher revenue per rider. 

Lyft made more revenue per rider after a yearlong driver shortage pushed ride prices to record highs. Lyft earned $51.88 in revenue per active rider, beating analysts’ forecast of $49.3 and above the $45.63 per active rider in the same quarter last year. 

The company reported better-than-expected adjusted earnings, which many startups use as a measure of operational strength. Lyft reported $66.2 million in adjusted earnings before interest, tax, depreciation and amortization, beating Wall Street’s forecast of $62 million, but below the $67.3 million in the same quarter last year. 

Lyft’s net loss widened to $422.2 million compared with $99.7 million in the year-earlier quarter, as the company issued new stock to employees to make up for its eroding share price. That came in higher than the $171 million loss expected by analysts.

The company’s fourth-quarter outlook was in line with Wall Street predictions. Lyft forecast revenue between $1.15 billion and $1.17 billion in the current quarter; analysts expected $1.16 billion. It predicted adjusted earnings between $80 million and $100 million; analysts had forecast $85 million. 

Lyft shares have underperformed the broader market over the past 12 months. Through Monday’s close, its stock was down 74% from a year ago while the tech-heavy Nasdaq Composite Index was down 34%.

On Monday, Lyft reiterated its guidance of $1 billion in adjusted earnings in 2024. “I believe the market has not fully accounted for that, or seen enough evidence to account fully for that,” Mr. Zimmer said, referring to some investors’ pessimism about its stock.

Uber’s diversified business, which includes global rides operations and a food-delivery arm that became its lifeline during the pandemic, has fared better. Its stock is down about 38% in the past year. Uber reported better-than-expected third-quarter results last week, with strong rides revenue lifting is performance.

Last week, Lyft said it would cut 13% of its staff, or nearly 700 jobs, becoming the latest technology company to say it needed to reduce costs amid concerns high inflation and slow economic growth could hurt business.

In a note to staff announcing the cuts, co-founders Mr. Zimmer and

Logan Green

warned of a looming recession and rising costs.

 “We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives. Still, Lyft has to become leaner, which requires us to part with incredible team members,” they wrote.

Lyft laid off 60 people, or under 2% of its workforce, in July. In May, it said it planned to slow hiring and reduce the budgets of some of its departments.

People look for ways to earn in a recessionary environment, Mr. Zimmer said Monday, and that is bringing more drivers to Lyft. Last week, Uber said it ended its third quarter with as many ride-share drivers as it did before the pandemic, marking the first time it reached that milestone since the health crisis.  

Lyft’s Mr. Zimmer said that last quarter had the strongest quarter-over-quarter growth in the number of active drivers since the start of the pandemic. He added that wait times for riders were slowly getting closer to prepandemic levels. 

Lyft has made a big bet in the election in California this week by becoming the biggest financier of a ballot measure that seeks to tax the state’s wealthiest to cover some of the costs of transitioning to greener forms of transportation and combat wildfires. California is going to require 90% of ride-share miles to be traveled on zero-emission vehicles by 2030. The new tax money, if approved, would help pay for electric-vehicle discounts and the infrastructure needed to make that happen.

Opponents of the measure, including California Gov.

Gavin Newsom,

say no new tax is needed because the state is already investing in similar measures. The Democrat is featured in a television ad calling it “a cynical scheme devised by a single corporation to funnel state income-tax revenue to their company.”

Support for the measure was more than 50% before Mr. Newsom’s ads began airing in September. An October poll by The Public Policy Institute of California showed support falling to 41%.

“I think it’ll be close,” Mr. Zimmer said. “We’ll see what happens.”

Write to Preetika Rana at preetika.rana@wsj.com

The ride-sharing company ended the quarter with 20.31 million riders, short of analysts’ prediction of 21.3 million, and still below the 23 million it had in the quarter before the pandemic struck. Rival

Uber Technologies Inc.

UBER -2.47%

said last week that its rider count had bounced back to prepandemic levels. 

“We’ll always want more demand,” Lyft co-founder and President

John Zimmer

said in an interview. “We had a tough few years and the hardest part should be behind us,” he added.

The company’s shares fell more than 13% in after-hours trading after it announced its quarterly results.

Lyft’s weak ridership numbers offset stronger-than-expected adjusted earnings as well as higher revenue per rider. 

Lyft made more revenue per rider after a yearlong driver shortage pushed ride prices to record highs. Lyft earned $51.88 in revenue per active rider, beating analysts’ forecast of $49.3 and above the $45.63 per active rider in the same quarter last year. 

The company reported better-than-expected adjusted earnings, which many startups use as a measure of operational strength. Lyft reported $66.2 million in adjusted earnings before interest, tax, depreciation and amortization, beating Wall Street’s forecast of $62 million, but below the $67.3 million in the same quarter last year. 

Lyft’s net loss widened to $422.2 million compared with $99.7 million in the year-earlier quarter, as the company issued new stock to employees to make up for its eroding share price. That came in higher than the $171 million loss expected by analysts.

The company’s fourth-quarter outlook was in line with Wall Street predictions. Lyft forecast revenue between $1.15 billion and $1.17 billion in the current quarter; analysts expected $1.16 billion. It predicted adjusted earnings between $80 million and $100 million; analysts had forecast $85 million. 

Lyft shares have underperformed the broader market over the past 12 months. Through Monday’s close, its stock was down 74% from a year ago while the tech-heavy Nasdaq Composite Index was down 34%.

On Monday, Lyft reiterated its guidance of $1 billion in adjusted earnings in 2024. “I believe the market has not fully accounted for that, or seen enough evidence to account fully for that,” Mr. Zimmer said, referring to some investors’ pessimism about its stock.

Uber’s diversified business, which includes global rides operations and a food-delivery arm that became its lifeline during the pandemic, has fared better. Its stock is down about 38% in the past year. Uber reported better-than-expected third-quarter results last week, with strong rides revenue lifting is performance.

Last week, Lyft said it would cut 13% of its staff, or nearly 700 jobs, becoming the latest technology company to say it needed to reduce costs amid concerns high inflation and slow economic growth could hurt business.

In a note to staff announcing the cuts, co-founders Mr. Zimmer and

Logan Green

warned of a looming recession and rising costs.

 “We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives. Still, Lyft has to become leaner, which requires us to part with incredible team members,” they wrote.

Lyft laid off 60 people, or under 2% of its workforce, in July. In May, it said it planned to slow hiring and reduce the budgets of some of its departments.

People look for ways to earn in a recessionary environment, Mr. Zimmer said Monday, and that is bringing more drivers to Lyft. Last week, Uber said it ended its third quarter with as many ride-share drivers as it did before the pandemic, marking the first time it reached that milestone since the health crisis.  

Lyft’s Mr. Zimmer said that last quarter had the strongest quarter-over-quarter growth in the number of active drivers since the start of the pandemic. He added that wait times for riders were slowly getting closer to prepandemic levels. 

Lyft has made a big bet in the election in California this week by becoming the biggest financier of a ballot measure that seeks to tax the state’s wealthiest to cover some of the costs of transitioning to greener forms of transportation and combat wildfires. California is going to require 90% of ride-share miles to be traveled on zero-emission vehicles by 2030. The new tax money, if approved, would help pay for electric-vehicle discounts and the infrastructure needed to make that happen.

Opponents of the measure, including California Gov.

Gavin Newsom,

say no new tax is needed because the state is already investing in similar measures. The Democrat is featured in a television ad calling it “a cynical scheme devised by a single corporation to funnel state income-tax revenue to their company.”

Support for the measure was more than 50% before Mr. Newsom’s ads began airing in September. An October poll by The Public Policy Institute of California showed support falling to 41%.

“I think it’ll be close,” Mr. Zimmer said. “We’ll see what happens.”

Write to Preetika Rana at preetika.rana@wsj.com