Lyft CEO: 'Business Has Never Been Stronger'

Summary

The company is experiencing strong demand with impressive numbers, including 800 million rides and $16 billion in bookings last year, alongside profitability and free cash flow of $766 million. Service improvements, such as faster pickups and better pricing strategies, have enhanced their competitive edge. While some analysts worry that price reductions could hurt long-term profits, the company believes it is in a strong position due to its large customer base and premium services, like black cars and SUVs, which have higher margins. The company feels confident about sustaining growth and profitability despite competition.

Takeaways

• 😀 The company has strong demand, with 800 million rides last year and $16 billion in bookings.
• 😀 They were profitable with a free cash flow of $766 million, indicating strong business performance.
• 😀 Service improvements include picking up passengers a minute faster than competitors.
• 😀 The company is seeing slightly lower pricing but isn't heavily focused on it.
• 😀 Competitors might be lowering prices to compete, but the company remains conservative on pricing.
• 😀 The company has 45 million riders and products like 'price shock' to increase customer frequency.
• 😀 The company has responded to pricing competition by improving service speed and efficiency.
• 😀 Analysts are concerned that pricing cuts could erode long-term profits, but the company disagrees.
• 😀 The company emphasizes that pricing changes were initiated by competitors, not themselves.
• 😀 The company is increasing the share of higher-margin products like black cars and SUVs by 40% year on year.
• 😀 Faster pickup times and premium service offerings are improving the company's economic position.

Q & A

What is the current state of demand for the business?

Demand is not a problem; the company has strong demand, as evidenced by last year's 800 million rides.

How much revenue did the company generate last year?

The company generated $16 billion in bookings last year.

Has the company been profitable recently?

Yes, the company was profitable last year, with free cash flow of $766 million.

How does the company’s service compare to competitors?

The company’s service has been performing better, with a faster pick-up time, about one minute faster than competitors.

Is the company lowering its prices to remain competitive?

Yes, there has been some slight price reduction, but the company hasn't focused heavily on it. Competitors may be trying to compete by lowering their prices.

What concerns have analysts raised regarding the company’s pricing strategy?

Some analysts are concerned that lowering prices to compete with Uber could erode the company's profits in the long term.

How does the company view the concern about lowering prices?

The company believes the concern is misplaced, stating that competitors started lowering prices first. The company is in a good position to respond due to its large rider base and products like price shock.

What strategies is the company using to mitigate the impact of lower prices?

The company is increasing its premium services, like black cars and SUVs, which have higher margins and have grown by 40% year on year.

What is the current rider base size of the company?

The company has 45 million riders.

How is the company improving its operational efficiency?

The company is improving its pick-up times, making them faster than ever, which enhances the economics of the business.