Lyft takes $135.7 million from Argo AI shutdown

Ride-hailing business Lyft lost $135.7 million in the third quarter due to the shutdown of self-driving vehicle company Argo AI, in which Lyft had a small stake.

At the end of last month, Argo AI shut down as its major backers, Ford and Volkswagen, withdrew their investments to focus on shorter-term goals, such as advanced intelligence systems. driving assistance in passenger vehicles.

Lyft and Argo were working together to test self-driving ride-hailing using Argo's technology on the Lyft platform. The two companies had launched public robotaxi services in Austin, Texas, in September and in Miami, Florida, in December last year. Both of these services have now been discontinued, a Lyft spokesperson told TechCrunch.

Lyft didn't say how it will adjust its AV strategy going forward, but the company also partnered with Motional, another AV technology company, to launch the robotaxis in Las Vegas in August.

Lyft's losses from the Argo shutdown represent only about a third of the company's total losses for the quarter. In the second quarter, Lyft lost $422.2 million, which is a higher cost than the $99.7 million in the same period of 2021 and a net loss of $377.2 million in the second quarter of this year. .

Most of Lyft's losses were attributable to $224.1 million in stock-based compensation and related payroll expenses, compared to $179.1 million in the second quarter. According to a Lyft spokesperson, the slight increase is related to the top-up Lyft gave to employees when its stock price fell earlier in the year.

Lyft said the increase was not yet related to the company's round of layoffs, the first of which was in July and the second last week as Lyft tries to cut operating expenses .

With respect to this workforce reduction, Lyft expects to "incur a charge of between $27 million and $32 million" in the fourth quarter, as well as "a stock-based compensation charge and a corresponding payroll tax charge related to affected team members, as well as restructuring costs related to a decision to exit and sublet or discontinue use of certain facilities,” said Elaine Paul, Chief Financial Officer of Lyft, in Monday's earnings call. "However, we are unable to estimate these fees at this time as they depend in part on the future price of our shares."

Paul also said Lyft is working to reduce stock-based compensation in the next quarter by ceasing new hires in the US and moving the hiring tie from the US to international markets like Canada and Eastern Europe where "there is a different compensation model with little or no equity."

For the third quarter, Lyft reported revenue of $1.05 billion, slightly below Wall Street expectations of $1.06 billion. The company's earnings per share came in at -$1.18 versus $0.09 that was expected. Even active runners, who saw quarter-over-quarter improvement, only topped 20.3 million, and the street had hoped for 21.1 million. That said, Lyft's revenue per active passenger exceeded expectations by $49.94 to $51.88.

Lyft's stock, which had started to climb after Uber reported strong earnings last week, fell 14.36% after hours on Monday. Shares of the company have fallen 69.29% since the start of the year.

Lyft closed the quarter with $143.7 million in cash.

Looking forward, Lyft expects revenue to be between $1.145 billion and $1.165 billion in the fourth quarter, with revenue growth reaching between 9% and 11% quarter-to-quarter. another and 18% to 20% year over year. Part of this growth will come from increased revenue per passenger, which is supported by Lyft's recent decision to increase service fees for passengers. Paul said Lyft intends to scale back its operations...