Earnings

Lyft earnings: A COVID-19 referendum on ride-hailing

Lyft earnings: A COVID-19 referendum on ride-hailing
  • Q1 revenue: $955.7 million (+23% YoY, -6% QoQ vs. $898 million expected)
  • Q1 loss: $398.1 million (down 65% YoY from $1.138 billion Q1 2019, up 12% QoQ)
  • Guidance: Lyft withdrew its full-year guidance in late April and said on an earnings call Wednesday that it is focused on slashing spending by up to $300 million this year.

The big number: While the number of rides on Lyft's platform plummeted 75% in April compared to last year, the average revenue the company collected from each rider grew to $45.06, up 19% from the same time last year. Despite the pain from coronavirus, investors liked what they saw, driving the stock up more than 15% in after-hours trading. But will the tolerance for spending more on rides last in a down economy and socially distant society?

People are talking: "Rides last week were still down more than 70% year-on-year," Lyft CEO Logan Green told investors on Wednesday's earnings call. "Even as shelter-in-place orders and travel restrictions are modified or lifted, we anticipate that continued social distancing, altered consumer behavior and expected corporate cost-cutting will be significant headwinds for Lyft."

Opportunities: To survive the pandemic, Lyft and gig companies like it must navigate an escalating labor war while encouraging consumer demand for cheap on-demand services. Green told investors his company will be able to withstand plummeting ridership because of a strong balance sheet and an "inherently resilient" financial model, in which about two-thirds of costs are variable. If and when people return to ride-hailing, executives said the company will be positioned to capture laid-off workers seeking new income — although a lot is riding on whether Lyft, Uber, Instacart, DoorDash and Postmates can convince California voters to back their $90 million ballot effort to circumvent state law AB 5, which would require gig companies to compensate workers as employees.

Threats: One existential issue is what happens if courts or California voters push back on Lyft and similar companies' plans to codify low-cost, benefit-light gig work as a permanent part of the economy. Another question for the business is how deep the cuts will go in the meantime, and what will be left afterward. Just this week, Lyft slashed 17% of its workforce, furloughed nearly 300 additional employees and announced 10% to 30% pay cuts. "Every other expense line is being scrutinized," Green said, which the company expects will trim about $300 million off projected 2020 spending.

The power struggle: Watch how many drivers get back on the road in the coming weeks. As it stands, Lyft has paused onboarding of new drivers and started a wait list for applicants, executives said Wednesday. But if ridership recovers and Lyft sees anywhere near the demand for new work that gig economy peers like Instacart have seen, the company could win more political leverage in a perilous moment for unemployment. Lyft and its allies already got one tacit endorsement from on high, when lawmakers and President Trump allowed gig workers to be written into an emergency federal relief package, even though the companies hadn't paid into unemployment insurance funds and incited backlash for offering workers few protections from the virus.

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

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Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

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FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

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Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

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Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

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Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

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