Lyft forecasts strong fourth-quarter bookings on robust commuter demand, shares rise

Lyft on Wednesday forecast gross bookings for the current quarter to come in above estimates after reporting positive quarterly revenue, indicating steady demand for its ride-hailing services from people returning to work.

Lyft shares, whose price typically fluctuates significantly after quarterly results, rose about 22% in extended trading.

As more companies enforce return-to-office policies, workers are increasingly turning to app-based taxi services like Lyft and Uber for their daily commutes, leading to a surge in demand for ride-hailing services on weekdays.

To better compete with its larger rival, Lyft introduced a price lock that allows users to avoid price increases during peak hours.

“We are seeing Price Lock riders taking an average of four more trips per month than they did before purchasing the pass,” CEO David Risher said in an emailed statement to Reuters.

While Uber reported better-than-expected third-quarter revenue last week, its forecast for the holiday quarter fell short of analysts' estimates.

Despite Uber's dominance in the industry, Wall Street expects Lyft to maintain its strong second place.

“We believe the company had a solid third quarter with impressive gross bookings and revenue growth. We believe the company is also working effectively to increase its size as both rides and riders have increased year over year,” Morningstar analyst Malik Ahmed Khan said.

Lyft has implemented several initiatives this year to attract and retain more drivers, including a guaranteed minimum wage and higher pay for longer trips, to meet increasing demand and compete with Uber.

Revenue rose 31.5% to $1.52 billion in the quarter ended Sept. 30, beating analysts' average estimate of $1.44 billion, according to data compiled by LSEG.

Gross bookings for the year are expected to rise about 17%, higher than Wall Street's expectation of 16.3%.

Lyft said it expected fourth-quarter gross bookings to be between $4.28 billion and $4.35 billion, above estimates of $4.23 billion.

For the current quarter, adjusted core profit was forecast to be between $100 million and $105 million, above expectations of $85.1 million.

The company's adjusted profit was 29 cents per share, beating estimates of 20 cents per share.