Lyft has said it was in the “early days” of building a delivery business to take on Uber Eats and others, as the coronavirus continues to weigh heavily on the company’s revenues.

Co-founder and president John Zimmer said its small-scale efforts to deliver essential goods during the pandemic had put it in contact with retailers seeking better terms on delivery.

“They told us that current delivery models, with their expensive commissions, are not working for them,” Mr Zimmer told investors on Tuesday. “They’ve emphasised that the overall incentives are not aligned between delivery platforms and individual retailers.

“This creates a significant and differentiated whitespace opportunity to help retailers and local businesses fulfil their organically obtained traffic.”

The offering would provide logistics only, rather than a marketplace “stuck in between” customers and food, Mr Zimmer added.

Unlike rival Uber, which has made up for poor conditions in the US rideshare market with huge gains in food delivery and international recovery, Lyft’s business is almost entirely reliant on transporting people in the US and Canada. Last week, Uber reported its revenues were down by 18 per cent year-on-year.

Lyft posted revenues of $499.7m for the quarter, a strong improvement on the previous quarter and higher than expected, but still down almost 50 per cent year-on-year. Losses of $460m were worse than the $418m analysts had predicted.

Lyft logged 12.5m riders in this year’s third quarter, up more than 40 per cent on the hard-hit second quarter, but down from 22.3m this time last year. Revenue per active rider increased 2 per cent on the previous quarter.

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The company’s shares jumped more than 4 per cent in after-hours trading after Lyft reiterated its target of having a positive quarter, on an Ebitda basis, by the end of next year. The company said it believed it could do that with 30 per cent fewer rides than previously forecast.

Its stock price rise follows gains of around 20 per cent earlier in the week when progress in the effort to create a coronavirus vaccine sent travel-related stocks soaring.

“Lyft’s third-quarter results reflect our focused execution and business resilience,” chief executive Logan Green said in a statement. 

“We are encouraged by the ongoing recovery in ride-sharing and the performance improvements we saw across bikes, scooters and fleet. We remain confident that demand will continue to return as we progress through the recovery.”

Via Financial Times