Shares of Lyft (NASDAQ:LYFT) have jumped today, up by 10% as of 1 p.m. EDT, after the company said ridesharing demand has started to rebound. Rides increased 26% in May compared to April.
Rides in May were still down 70% compared to a year ago, but investors are optimistic that the worst may be in the rearview mirror. As COVID-19-related lockdown orders ease, demand has steadily recovered each week for the past seven consecutive weeks, the company said. Rides are increasing across cities that are starting to lift restrictions, such as Austin, Las Vegas, Miami, Denver, and Seattle, among others.
"Riders are taking relatively more rides on weekdays versus weekends, including commute trips by essential workers as well as trips to stores selling essential goods," the ride-hailing tech company wrote in a regulatory filing. "For the last three weekends, as restrictions on certain activities were eased in parts of the country, there was stronger relative sequential growth in weekend rides versus weekly rides on Lyft's rideshare platform."
The COVID-19 pandemic has been decimating the ridesharing industry as people stay at home, and Lyft does not have other segments (such as food delivery) to fall back on like larger rival Uber. Lyft laid off 17% of its workforce earlier this year.
Considering the improvement, Lyft said adjusted EBITDA losses in the second quarter should not be any greater than $325 million, assuming that demand remains stable in June relative to May. That new adjusted EBITDA forecast is roughly 10% better than Lyft's previous expectations.