Lyft plans to cut about $300 million in fixed annual costs by the end of this year as the company faces depleted demand, despite some recovery over the past few weeks.
In an earnings call on Wednesday, co-founder and CEO Logan Green said April rideshare rides were down 75 percent year over year after a "sharp decline" in mid-March. While rides have grown week over week for each of the past few weeks, rides as of last week still were down 70 percent compared with the same time last year.
"Even as shelter-in-place orders and travel restrictions are modified or lifted, we anticipate that continued social distancing altered consumer behavior and expected corporate cost-cutting will be significant headwinds for Lyft," Green said. "The strength and duration of these headwinds cannot presently be estimated."
Last week, Lyft laid off about 17 percent of its workforce and furloughed an additional 300 employees, according to Green. Remaining salaried employees were given a three-month pay reduction. Additional cost-cutting measures have included shutting off nearly all rider coupons and stopping new drivers from coming on board in nearly all markets.
Prior to the Covid-19 crisis, Lyft's first-quarter revenue was "exceeding our expectations," CFO Brian Roberts said. Revenue for the quarter was up 23 percent year over year to $955.7 million. Active riders for Lyft increased 3 percent year over year, and revenue per active rider was up 19 percent.
Lyft's net loss for the first quarter was $398.1 million, compared with a $1.1 billion loss in the first quarter of 2019.
The crisis has brought Lyft some new customers on the business side, co-founder and president John Zimmer said. Lyft in March launched "essential commute" programs for companies that want employees to get to work without using public transportation, and Kroger and Estée Lauder have been among its customers, he said. In addition, Lyft has added more than a dozen health systems across the U.S. as customers, helping their employees get to and from work.
"Through these programs, our platform is enabling important rides for workers, who are depending on Lyft as their new transportation solution," Zimmer said.
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