Lyft said that riders in multiple cities are paying higher prices, an unwelcome development for thousands of customers as the company sets its sights on achieving profitability.
The "price adjustments" started in June, the company said during its earnings call Wednesday. That followed a long period of lower prices to win a bigger customer base in the lead-up to the company's initial public offering in March.
"We're focused on trying to win on brand preference and experience - not coupons," said Chief Financial Officer Brian Roberts, on the call.
The strategy appeared to be working. The company's earnings exceeded analyst expectations as revenue rose 72 percent, to $867.3 million for the second quarter. Lyft still lost $644.2 million, from $178.9 million. Lyft said much of the loss was attributable to stock-based compensation and payroll tax expenses due to its public offering.
The company, however, projected it will record smaller losses for the remainder of 2019 than expected and reported that its share of active riders and revenue per active rider were both up for the year, sending stock prices up 4 percent in after hours trading, to $62.80.
"This was a milestone quarter on our path to profitability," Lyft CEO Logan Green said.
Uber and Lyft have been dueling for passengers in recent years, and both companies went public this spring. Since then, their stocks have largely lagged expectations as investors remain skeptical that the companies - which typically lose hundreds of millions or more per quarter - can ever show a profit.
On the call, executives noted how strong revenue growth amid dwindling passenger incentives were a welcome sign as Lyft takes on that challenge. Sales and marketing as a percentage of revenue have declined nearly 40 percent, they said, a sign of dwindling passenger incentives.
Lyft said price adjustments went into effect on "selected routes in selected cities," based on cost and demand factors. They did not specify how dramatic the price changes would be or in which cities they're taking place. They did hint that airport and premium rides, targeting the business segment, are among the companies' most lucrative trips.
"We believe these price adjustments reflect an industry trend," said Roberts, likely alluding to a cooling price war with its biggest rival. Uber's executives said earlier this year that it appeared that a long-time price war in the ridesharing industry might be waning.