Lyft Inc on Wednesday said a price war with rival Uber was easing, boosting shares of both companies and allowing Lyft to raise its outlook for the year and forecast a faster path to profitability.
Lyft said increased revenue per rider would lift both third-quarter sales and full-year revenue above Wall Street estimates. That sent Lyft shares up 5% and shares of Uber Technologies Inc up 3.8% in after-hours trade.
“We believe these price adjustments are an industry trend,” Chief Financial Officer Brian Roberts said on a call with analysts. He said 2018 was likely the peak of losses for Lyft, an improvement from the company’s previous target of reporting its biggest loss this year.
Lyft shares temporarily turned negative after it announced plans to bring forward its lock-up period – the time after a public offering in which large shareholders are prohibited from selling shares – to Aug. 19 from Sept. 24.
Lyft estimated that about 257.6 million shares could become eligible for sale when the trading restrictions ended.
A loss of $2.23 per share in the quarter was worse than the $1.74 per-share loss expected, on average, by analysts, according to IBES data from Refinitiv.
Still, Lyft’s raising its outlook for revenue and adjusted losses for the full year were “welcome signs,” said Wedbush analyst Ygal Arounian.
Lyft’s 72% jump in revenue was fueled by more active riders, who spent about a quarter more than they had a year ago.