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Lyft acquires Freenow and is expecting an increase in luxury travel bookings as stock prices rise.
Lyft Inc. gave a fourth-quarter forecast for a vital measure of demand that surpassed Wall Street's expectations and said its push into Europe would provide a sales boost next year, even though the ride-hailing service said it predicts higher insurance costs. For the fourth quarter, Lyft said it anticipates gross bookings to be in the range of about $5.01 billion to $5.13 billion, with the midpoint above FactSet analyst estimates of $5.02 billion. It also expects ride growth in the "mid-to-high-teens" percentage range.
"Imagine you book a chauffeur for the day. On the ride in, you spill coffee on your shirt minutes before your first meeting. After the meeting, your driver has a backup shirt ready for you and a fresh nonfat vanilla latte waiting in the cup holder," said Lyft. "That's service," the company added. "That level of care is what will create a halo effect for our entire brand." Lyft said this level of care reflects its focus on luxury travel, stating, "Luxury belongs at Lyft." The ride-hailing service is seeing benefits from the Freenow acquisition as well as luxury travel. Lyft acquisitions Freenow, a ride-hailing app in Europe, over the summer, and is another way for it to enter into more international markets.
During the 3rd quarter, gross bookings, or the dollar value of all transactions taken on the app, in this case, were up by 16% at $4.8 billion. The expectation on Wall Street was a number of $4.74 billion. The company noted strong growth with rides and back to school demand from earlier time phases. Uber Technologies Inc. (UBER), Lyft's larger rival, said its plans related to self-driving cars were unlikely to be profitable for some time. Shares of Uber finished 2% lower. Lyft reported the results as Wall Street remains focused on the ride-hailing industry's push into Robotaxis. Shares of Lyft are up more than 55% so far this year.
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