The pandemic continues to buffet Lyft’s ride-hailing business. The company said on Tuesday that revenue for the fourth quarter of 2020 was $570 million, a 44 percent decline from the year before but in line with Wall Street expectations. Losses increased 22 percent, to $458.2 million.
Lyft’s business had been improving early in the quarter but slumped in November and December as coronavirus cases climbed in the United States.
Still, Lyft said there were signs of recovery. Fourth quarter revenue was 14 percent above the $500 million in income from the third quarter. The company also said it had adjusted to the decline in demand by decreasing its spending on driver acquisition and marketing, which prevented the losses from being worse. And with vaccines on the horizon, Lyft said it expected stronger demand in 2021.
But the pandemic has taken an undeniable toll on Lyft’s business. Revenue for 2020 was down 35 percent, to $2.4 billion. Ride-hail drivers said they have also seen their earnings fluctuate during the pandemic and have struggled to get enough safety supplies like masks and sanitizers.
During an earnings call with analysts, Lyft executives said the company remained on track to meet its profitability goal this year.
Lyft’s shares were up 9 percent in after-hours trading.
Analysts said the need to keep drivers engaged may push Lyft to expand into the delivery business. The company has a small delivery arm that has focused on transporting essential goods during the pandemic, but a broader delivery business would provide an alternative revenue stream and keep drivers active when demand for rides is down.
“It’s becoming increasingly clear that Lyft can’t afford not to be participating in online food delivery, grocery delivery or essentials delivery,” said Tom White, a senior research analyst at D.A. Davidson.
Investors also want to know when Lyft could become profitable, Mr. White said. Lyft had aimed to turn a profit by the end of 2021, but it’s unclear whether the pandemic will change that timeline.
“Despite the difficult backdrop in 2020, we continued to focus on improving our business for the long-term,” Logan Green, Lyft’s chief executive, said in a statement. “The progress we’ve made has been significant and I believe we are now in a stronger position than at any time in our past.”
Kellen Browning contributed reporting.