Business Maverick: Lyft Set for Biggest Drop Ever After Warning of Lower Profits

The ride-hailing company projected adjusted earnings before interest, tax, depreciation and amortization of $5 million to $15 million this quarter, missing an $83.6 million average estimate in a Bloomberg survey. Shares plunged 32% in early New York trading Friday to $10.95. If the decline holds, it’ll be the biggest drop since the San Francisco-based company’s initial public offering four years ago.

The stock plunged 74% in 2022, but had rebounded 47% this year through Thursday’s close. Lyft shares jumped in the company’s March 2019 trading debut, closing almost 9% higher than its IPO price of $72.Lyft had reduced base prices for a ride in January to keep up with a similar move by Uber. “Relative to three months ago, the competitive dynamics changed,” Green said. “We must prioritize competitive service levels.

Lyft co-founder and President John Zimmer said the company will be competitive on price and wait times. In October, the company increased the service fee riders pay directly to cover higher insurance costs. Those expenses are expected to continue to rise. Rather than have riders bear the burden, Lyft is willing to take the hit to profits instead, Zim

Zimmer said driver supply in the fourth quarter was “the best in three years” but declined to say if Lyft would be paring back spending on incentives.

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