Shares of Lyft Inc. were up more than 10% after its CEO said the ride-hailing company will be profitable on an adjusted EBITDA basis by the fourth quarter of 2021.
"We've never laid out our path to profitability, and we know that's a question on a lot of investors' minds," Lyft co-founder and CEO Logan Green said during an Oct. 22 fireside chat hosted by The Wall Street Journal. "We're going to be profitable on an adjusted EBITDA basis a year before analysts expect us to. We're going to hit this target in Q4 2021."
Green said there are three key factors to Lyft's profitability: driving profitable growth, high-value modes and product innovation.
This includes focusing on Lyft's business travel options for companies and Shared Saver, which offers riders lower-priced rides in exchange for longer wait times and walking a few blocks to the meeting point, Green said.
Co-founder and President John Zimmer said higher prices could be one way to help Lyft become profitable but that fewer discounts for riders can also translate into higher prices.
"We were doing more coupons a couple years ago than we do now," Zimmer said. "Yes, you could call that higher prices. We were discounting rides that people wouldn't have maybe taken otherwise. It was necessary to build up scale, but it's not necessary in today's world."
Lyft went public March 29 with an offering price of $72 and closed at $78.29 the day of its debut on the Nasdaq but has failed to hit that share price since. In August, Lyft reported an adjusted net loss of $197.3 million for the second quarter, which was narrower than expected, according to S&P Global Market Intelligence.
Shares of Lyft were up 10.37% at $45.12 during midday trading Oct. 22.