Lyft’s Strong Performance Signals Resilience in Rideshare Market

In a display of robust growth that defies broader economic concerns, Lyft has reported impressive quarterly results with gross bookings jumping 13% and shares surging in response. CEO David Risher, who has been at the helm for approximately two years, shared his optimistic outlook on the company’s trajectory during an appearance on CNBC’s “Squawk Box.”

“So far, we’re not seeing anything to worry about,” Risher said regarding consumer strength, echoing sentiments expressed by Uber CEO Dara Khosrowshahi earlier in the week. “Lyft is a pretty important part of people’s lives. Every day we give over 2 million rides. People make literally billions of dollars on the platform. And services tend to do well even in times of uncertainty.”

The company has now achieved its 16th consecutive quarter of growth, with rides up over 16% year-over-year. This performance has translated into substantial cash generation—nearly $1 billion annually according to Risher.

Lyft’s strategy under Risher has remained consistent: “Customer obsession drives profitable growth.” This approach appears to be yielding results both domestically and internationally, with the CEO noting that the company has doubled its business in Canada year-on-year.

The recent acquisition of Free Now, a European mobility platform, represents Lyft’s effort to diversify its revenue streams and expand its global footprint. “I think what works here in the United States is going to work well overseas and vice versa. We’re going to learn a bunch, so hopefully create an even stronger company as a result,” Risher explained.

When questioned about capital expenditure requirements, Risher emphasized Lyft’s asset-light business model: “We have 1.5 million people who drive on the platform, and yet we own almost no cars. We own very, very light assets.” This efficiency has contributed to the company’s strong cash position, with over $920 million generated in the trailing 12 months.

Despite today’s share price surge and year-to-date gains, Lyft’s stock has underperformed competitor Uber over the past year. When asked about this discrepancy, Risher referenced Benjamin Graham’s investment philosophy: “In the short term, the stock market sort of measures, in the long term it weighs. We’re really building a company for the long term.”

Risher also highlighted the significant growth potential in the rideshare industry overall, noting that Americans take approximately 160 billion rides in private vehicles annually, compared to only “a couple 3 billion on rideshare platforms.”

Unlike Uber, which has diversified into food delivery and other services, Lyft remains focused primarily on mobility. “I’m a big fan of focus,” Risher stated. This concentrated approach has allowed the company to develop targeted offerings like “Lyft Silver,” a recently launched feature designed specifically for older adults who may have given up driving.

Looking ahead, Risher acknowledged the transformative potential of autonomous vehicles while positioning Lyft to benefit from this technological shift. “We’re working super hard to be the best way for autonomous partners to plug into our network so they can use our fleet management, our demand generation, our marketplace mechanisms,” he said. The company plans to launch its first autonomous service in Atlanta “in just a couple of months” with partner May Mobility.

In a move that has pleased investors, Lyft recently increased its share repurchase authorization from $500 million to $750 million, with a commitment to execute $500 million of buybacks. This decision, according to Risher, was driven by the company’s strong cash generation rather than pressure from activist investor Engine Capital, which has since withdrawn its board nominations.

As the rideshare industry continues to evolve, Lyft’s focus on operational excellence and customer experience appears to be creating a foundation for sustainable growth in an increasingly competitive landscape.

Source: CNBC Television “Squawk Box” interview with Lyft CEO David Risher