Lyft Shows Proof of Life in Profitable Q4

Lyft lives! Well, maybe. The No. 2 ride-hailing firm reported that it generated real cash in the fourth quarter for the first time ever, and its CEO, David Risher, predicted the company would repeat the feat for all of 2024. Initial reaction from Wall Street was euphoric—at one point Lyft shares were up 60% in after-hours trading—but that reaction turned out to be based on a mistake in Lyft’s earnings announcement. After the company’s finance chief told analysts Lyft was expecting its profit margin to rise only half a percentage point this year, not the 5 percentage points stated in the release, the stock plunged from around $20 to about $14. Don’t company staffers proofread earnings announcements?

That blunder aside, the fact that Risher has stopped the cash bleed suggests he might be able to turn Lyft into a sustainable business. Risher, a onetime Amazonian who took the reins of Lyft from its co-founders last April, has brought an Amazon ethos to his management. His thesis, as he told analysts on Tuesday, is that “customer obsession drives profitable growth.” He’s demonstrated the profit part of that. Whether Lyft can grow meaningfully while making money, though, is a whole different question.