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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.

Protocol | Enterprise

Alphabet goes deep into industrial robotic software with Intrinsic

If it succeeds, the gambit could help support Google Cloud's lofty ambitions in the manufacturing sector.

Alphabet is aiming to make advanced robotic technology affordable to customers.

Photo: Getty Images

Alphabet launched a new division Friday called Intrinsic, which will focus on building software for industrial robots, per a blog post. The move plunges the tech giant deeper into a sector that's in the midst of a major wave of digitization.

The goal of Intrinsic is to "give industrial robots the ability to sense, learn, and automatically make adjustments as they're completing tasks, so they work in a wider range of settings and applications," CEO Wendy Tan-White wrote in the post.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

As President of Alibaba Group, I am often asked, "What is Alibaba doing in the U.S.?"

In fact, most people are not aware we have a business in the U.S. because we are not a U.S. consumer-facing service that people use every day – nor do we want to be. Our consumers – nearly 900 million of them – are located in China.

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J. Michael Evans
Michael Evans leads and executes Alibaba Group's international strategy for globalizing the company and expanding its businesses outside of China.
People

To combat disinformation, centralize moderation

There's more to content moderation than deplatforming.

In addition to interplatform collaboration, big tech companies would also benefit from greater collaborations with academic researchers, government agencies or other private entities, the authors argue.

Image: Twitter

Yonatan Lupu is an associate professor of political science and international affairs at George Washington University. Nicolás Velasquez Hernandez is a lecturer at the Elliott School of International Affairs and a postdoctoral researcher at GW's Institute for Data, Democracy and Politics.

Florida Gov. Ron DeSantis' signing of a bill that penalizes social media companies for deplatforming politicians was yet another salvo in an escalating struggle over the growth and spread of digital disinformation, malicious content and extremist ideology. While Big Tech, world leaders and policymakers — along with many of us in the research community — all recognize the importance of mitigating online and offline harm, agreement on how best to do that is few and far between.

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Protocol | Fintech

Marqeta turns to a fintech outsider

Randy Kern, a Salesforce and Microsoft veteran, is taking a plunge into the payments world.

Randy Kern is joining Marqeta after decades at Microsoft and Salesforce.

Photo: Marqeta

Marqeta has just named a new chief technology officer. And it's an eyebrow-raising choice for a critical post as the payments powerhouse faces new challenges as a public company.

Randy Kern, who joined Marqeta last month, is a tech veteran with decades of engineering and leadership experience, mainly in enterprise software. He worked on Microsoft's Azure and Bing technologies, and then went on to Salesforce where he last served as chief customer technology officer.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

Protocol | Policy

What can’t Jonathan Kanter do?

Biden's nominee to lead the DOJ's antitrust section may face calls to remove himself from issues as weighty as cracking down on Google and Apple.

DOJ antitrust nominee Jonathan Kanter's work as a corporate lawyer may require him to recuse himself from certain cases.

Photo: New America/Flickr

Jonathan Kanter, President Joe Biden's nominee to run the Justice Department's antitrust division, has been a favorite of progressives, competitors to Big Tech companies and even some Republicans due to his longtime criticism of companies like Google.

But his prior work as a corporate lawyer going after tech giants may require him to recuse himself from some of the DOJ's marquee investigations and cases, including those involving Google and Apple.

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Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

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