Lyft - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 delivered record activity with Rides up 16% YoY to 218.4M, Active Riders up 11% to 24.2M, revenue of $1.45B (+14% YoY), Adjusted EBITDA of $106.5M (margin 2.6%), and GAAP net income of $2.6M.
• Versus S&P Global consensus, revenue of $1.45B modestly missed $1.46B*, and Primary EPS of $0.109 (normalized) missed $0.204*; prior Q3/Q4 both beat on revenue and EPS* [GetEstimates].
• Q2 2025 guidance: mid-teens rides growth YoY, Gross Bookings $4.41–$4.57B (+10–14% YoY), Adjusted EBITDA $115–$130M (margin 2.6–2.8%).
• Capital return accelerated: share repurchase authorization increased to $750M with $500M targeted within 12 months (including $200M in next 3 months), backed by trailing 12-month operating cash flow of $980.8M.

What Went Well and What Went Wrong

What Went Well

• “Strongest start to the year ever” with record Q1 Gross Bookings, Rides, and Active Riders; 16th consecutive quarter of double‑digit Gross Bookings growth.
• Cash generation nearly $1B TTM ($980.8M from operations; $919.9M FCF), enabling the buyback increase to $750M.
• Strategic advances: Lyft Silver launched to expand demographics; Earnings Assistant (AI) pilot for drivers; planned FREENOW acquisition to enter Europe and nearly double TAM.
  • “Dual‑app drivers reported a 23 percentage point preference for Lyft” and “rides reached the highest weekly levels in our history” (late March).

What Went Wrong

• Pricing remained below Q4; average prices in Q1 were still lower QoQ (modestly up YoY), contributing to lower gross bookings per ride due to mix effects (growth in Canada and underpenetrated U.S. markets).
• Delta partnership ended April 7; management expects over time ~1% impact to Rides and ~2 pts to Gross Bookings, a modest headwind embedded in guide.
• Versus consensus, Q1 revenue and Primary EPS missed, despite strong execution on operations and cash flow* [GetEstimates].

Transcript

Operator (participant)

As a reminder, this conference call is being recorded. I would now like to turn the conference over to Aurelien Nolf, VP at Investor Relations. Please go ahead.

Aurelien Nolf (VP, FP&A, and Investor Relations)

Thank you. Welcome to the Lyft Earnings Call for the First Quarter 2025. On the call today, we have our CEO, David Risher, and our CFO, Erin Brewer. Starting with this call and going forward, our full prepared remarks will be available on the IR website before the call, and we will use this time to answer more of your questions. We'll make forward-looking statements on today's call relating to our business strategy and performance, partnerships, future financial and operating results, trends in our marketplace, and guidance. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call. These factors and risks are described in our earnings materials and our recent SEC filings.

All of the forward-looking statements that we make on today's call are based on our beliefs as of today, and we disclaim any obligation to update any forward-looking statements except as required by law. Additionally, today we are going to discuss customers. For rideshare there are two customers in every car. The driver is Lyft's customer, and the rider is the driver's customer. We care about both. Our discussion today will also include non-GAAP financial measures, which are not a substitute for GAAP results. Reconciliations of our historical GAAP to non-GAAP results can be found in our earnings materials, which are available on our IR website. With that, I'll pass the call to David.

David Risher (CEO)

Thank you, Aurelien. Hi everyone, and thank you as always for joining. Q1 2025 was our strongest Q1 ever. We are innovating for drivers and riders. We are expanding outside the US in a meaningful way, and our partnership strategy continues to fuel our momentum. Lyft had year-on-year growth across regions, across modes, and across use cases, resulting in a record Q1 for active riders, rides, and driver hours. Looking at our financials, we delivered Q1 records in gross bookings, adjusted EBITDA, and free cash flow. A note on gross bookings, this was Lyft's 16th consecutive quarter of double-digit year-on-year growth, demonstrating the resilience and momentum of our customer-obsessed strategy. We approached nearly $1 billion in cash generation over the last 12 months. That demonstrates our winning formula of growth with discipline.

It's this financial strength that has enabled us to increase our share repurchase program to $750 million while maintaining the ability to invest in our most promising growth initiatives. With our expansion into new demographics by Lyft Silver and into Europe with our Freenow acquisition, we are positioning ourselves for sustained growth to build on our incredible momentum. I am so impressed and proud of the work our team has done over the last two years to build a strong foundation fueled by customer obsession and operational excellence. I am very confident we are well positioned for 2025 and beyond. With that, let's get to your questions.

Operator (participant)

We will now begin the question and answer session. At this time, I would like to remind everyone to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. One moment, please, for your first question. Your first question comes from the line of Brad Erickson of RBC Capital Markets. Please go ahead.

Brad Erickson (Internet Equity Analyst)

Hey, thanks for taking my questions. First, you know, just talk about the pricing environment. What are you seeing? Maybe just the puts and takes between sort of things within your control versus things out of your control. Then second, just on insurance, I know it's a little early to talk about this, but maybe any update you can give on how you're thinking about that adding into the pricing formula through the year. Thanks.

Erin Brewer (CFO)

Hi, Brad. It's Erin. Why don't we start with pricing? I'll start there and turn it over to David, and then we can come back and I'll chat about insurance. Let me just start with some facts around pricing. Obviously, we talked about it last quarter about some dynamics in the market generally resulting in lower prices in the US, which we started to see late in the fourth quarter. As of our last earnings call, they were persistent at that time. Here we are today. Average prices in Q1 were still lower than average prices in the fourth quarter, although they were up modestly year over year. David?

David Risher (CEO)

Yeah, I'll just say to remind everyone on the call that our pricing strategy remains the same. It's always to be competitive, for sure, and then to be reliable. Of course, we've talked in the past about how we're trying to sort of get prime time out of the system, introduce features like Price Lock and so forth to sort of even further increase that reliability. Really no change, as Erin has said, you know, modest differences from what we've seen in the past, but we feel good about where things are.

Erin Brewer (CFO)

Brad, back to your second question around insurance. You know, we continue to move forward with our programs. Everything that we work on across our risk team here at Lyft, we highlighted a whole bunch of that at Investor Day and have talked about it since, but it is just continuing that momentum. We have unique industry-leading capabilities. We are continuously innovating to make our platform safer through technology, products, partnerships. You know, we innovated things like the Smooth Cruiser Score, which gives drivers feedback on how they are doing and how to provide better rides. We will continue that. We are recognized by our partners, our long-standing partners, you know, for all of those advancements. We feel really good about our program. You heard us talk about our renewal, our 10-1 renewal. As you know, we have got a six-month cycle. No new updates there.

You know, it's reflected in how you see our guide in the second quarter. I don't have anything specific to call out there. We continue to make great progress. We've got a great team, and we've got great long-term partnerships.

Brad Erickson (Internet Equity Analyst)

Thanks.

Aurelien Nolf (VP, FP&A, and Investor Relations)

I think we'll take the next question.

Operator (participant)

Your next line comes from the line of Ken Gawrelski of Wells Fargo. Please go ahead.

Ken Gawrelski (Managing Director and Senior Internet Analyst)

Hi, thank you for the question. Really appreciate it. I'm curious, just a couple of things. One is the other guys, I think, as you refer to them, have talked a lot about affordability initiatives in the U.S. I'm just curious, just as you think about the go forward and the many innovations you've rolled out on the product side, how you're thinking about just the go forward there and your positioning in the market and kind of from a pricing standpoint, how the pricing outlook is for the remainder of the year. The second, if I may, please, you made an announcement to enter Europe. Could you just talk to us a little bit more? And you're expanding in Canada. Could you just talk a little bit about your broader international ambitions?

Should we think of this as the extent of it for the next, you know, select period of time, or could we see more? Thank you.

David Risher (CEO)

Sure. Yeah, good questions, both. On pricing, I do not have much more to say than what Erin said, but maybe zooming out just a little bit. I mean, look, in a marketplace like this, you know, let me actually step way, way back. You always want to be able to provide the best price you possibly can. I mean, let's be clear. That is always important. I feel, you know, good about where our pricing is, and I do not see it being a major, you know, sort of area of focus or competition. Really all I mean by that is, you know, like our, as you mentioned, innovation is kind of our big thing, right? At a certain level, there is only so much you can do with pricing.

The market, you know, sets a clearing price, you know, millions of times a day, and we sort of follow the market's lead on that. As they say, we're competitive and reliable. Once you sort of have that and you kind of take that a little bit off the table, it becomes much more interesting to think about things like the Silver or Price Lock or the earnings guarantee for drivers or whatever you can do to really drive preference for your platform. I think it's really because we've been so focused on that customer obsession and the operational excellence required to continue to execute on that that we've seen our growth be powered sort of independent of pricing sort of bouncing around a little bit. Maybe not much more to say about that.

On international, you're right to point out that we've seen great, great growth in Canada, roughly doubled year on year and now up, I think, another 50%. In fact, I think literally just today we opened up the funnel for driver onboarding in Quebec, the province of Quebec, which just gave us authorization to expand there later this year. Super excited about that. You know, looking at that, which obviously gave us a certain amount of confidence that our kind of customer-obsessed formula can work outside the U.S., we acquired FreeNow. I can talk more about that if you're interested, but I don't think I'm going to be able to say much beyond that just now. Obviously, that deal hasn't even closed. It won't until the second half of the year. A bit premature to think about further international expansion.

I will say more likely than not, the near-term focus will be kind of infill in the nine countries where FreeNow is operating rather than thinking about further expansion. That is not a never say never. It is simply the focus right now is on making sure the FreeNow acquisition, you know, exceeds its already great potential.

Operator (participant)

Next question comes from the line of Eric Sheridan of Goldman Sachs. Please go ahead.

Eric Sheridan (Managing Director and Senior Research Analyst)

Thank you so much for taking the question. Maybe I'll just ask one. You know, you obviously made the announcement with May Mobility, and we're seeing a lot of different announcements in the broader AV landscape. Would love to continue to sort of click down on how your views are evolving in terms of going to market with partners and what you think that might do in terms of the supply and demand dynamic in these cities where you bring that type of supply into your ecosystem. Thanks so much.

David Risher (CEO)

Yeah, sure. I'll take this one, Eric. Good to hear from you. Let's start exactly where you started with May Mobility. We're super excited about that partnership. It's scheduled and on track to launch this summer in Atlanta, which is wonderful. I think it's going to be very interesting and very instructive for us, of course, because it'll help us get feedback on what happens in markets when we do this. Next up, of course, is the partnerships that we've announced in Texas coming next year. That'll also involve a financing partner, Marubeni, which sort of maybe allows me to talk a little bit about the whole value chain for just a second and then get back specifically to your question. You know, I feel maybe I'll just start by saying, again, AVs are an absolutely extraordinary opportunity for us.

Absolutely extraordinary opportunity. It is because it brings, you know, a whole new supply, as you're mentioning, and frankly, broadens the portfolio, right? You now have use cases that maybe people were not excited about before on rideshare that now they get very excited about, whatever those might look like. It is a good product, and it is a safe product, and so on and so forth. Super, super excited about how it can expand the market and open us up to new opportunities. There is a whole set of activities that has to happen all the way from, you know, the equipment manufacturers have to be on board, the OEMs have to be on board. Financing has to be lined up. Again, I'll mention Marubeni, our partner who is in the business of fleet financing and fleet ownership. That ownership piece is quite important.

Someone's got to own these things, and hopefully it's someone with a good capital structure and so on and so on. That's where they come in. There's the whole fleet management piece, which we've talked about several times. Again, since we're on the topic, I would encourage anyone who hasn't read about the post we published a couple of weeks ago on FlexDrive, our subsidiary that does fleet management. I'd highly recommend you read it because it gives you a strong sense of why fleet management matters so much. I mean, anyone can have, you know, a couple of cars, you know, maybe even 50 cars and sort of keep them utilized.

Man, you start talking about thousands of cars, and you're talking about a lot of maintenance, a lot of repair, a lot of uptime, you know, monitoring, a lot of cost control, and so on and so forth. That's what FlexDrive provides us. We do that, you know, to the tune of 10,000-20,000 cars every year on a platform already. We're super excited about welcoming AVs to that. Of course, you have the marketplace piece. That's supply-demand management, ETA estimation, and so on and so forth, and then pricing and all the outbound marketing to generate demand. Okay. That's the whole value chain. Again, we've written about this. I recommend you read that paper as well just for education. Back to the center of your question. I mean, our general view is the more supply, the better, right?

Ken Gawrelski (Managing Director and Senior Internet Analyst)

We think it'll come from a lot of different partners. You know, May is an early one. Mobileye, of course, is another tech provider. They're the ones that are providing the tech in Texas for us. You know, there are companies that, frankly, we've never even heard of yet that will be providing this technology over the coming years. You have the current market leaders as well. Our strategy, you know, through all of this is the same, which is we want to be the absolute best way for an AV supplier of any type to monetize those assets on the platform, to monetize those assets on the platform. That's what we're setting up for, and we feel, you know, very confident in our position.

Operator (participant)

Your next question comes from the line of Ben Black of Deutsche Bank. Please go ahead.

Jeffrey Bunzel (Managing Director and Head of Equity Capital Markets)

Hi, thanks. This is Jeffrey on for Ben. Thanks for taking our questions. This is a follow-up to that on AVs. Kind of looking beyond, you know, getting the supply on the platform, what do you think the impact will be to pricing and frequency membership as AVs scale longer term? Also, would be great to hear your thoughts on the Waymo-Toyota partnership for personally owned vehicles. It would be great to get your perspective if this could impact Lyft and, I guess, the transportation market more broadly. Thank you.

David Risher (CEO)

Yeah, great questions, both. I'm sorry, the second one I'm very clear on. The first one, again, say that one more time, Jeff.

Jeffrey Bunzel (Managing Director and Head of Equity Capital Markets)

Just kind of beyond.

David Risher (CEO)

Oh, the pricing.

Jeffrey Bunzel (Managing Director and Head of Equity Capital Markets)

Yeah, pricing and frequency membership.

David Risher (CEO)

Of course. Yeah, of course. I mean, you know, we can give you our views, but I will tell you that probably the dominant thing to take away on that is a little too early to tell. The reason I say that is because if you look at the markets where AVs are operational right now, you know, you see a San Francisco, you see a Phoenix, you see an LA, you see an Austin, as an example. The dynamics in each of these is slightly different. You know, in some markets, AVs are actually priced as a premium product. In some markets, they're priced at a little bit of a discount. In most markets, the service levels are actually not as good as traditional rideshare, which, you know, you can understand why that might be. The ODDs are somewhat limited.

Even when there's dense supply, you know, those companies don't necessarily, or it's really that company, doesn't necessarily have the same sophistication with supply-demand balancing and so forth. It is very hard to know, you know, over the long term what's going to happen. Obviously, the bet that generally people are making is that over time this will increase supply overall and decrease cost to operating a network like this. That seems like a reasonable assumption for obvious reasons, but that can be quite a long ways away. It really could. For example, insurance, people think a lot about insurance. Gosh, AVs are safe. That's true. On the other hand, they're very expensive to repair. That's also true. They still do get in accidents because other people cause those accidents sometimes. The utilization rates are very unknown.

You know, the profitability of these on a unit basis, per car basis, will have a lot to do with whether they're utilized, you know, 14 hours a day or 18 hours a day. Sorry, back to insurance, I neglected to mention that insurance companies tend to be quite conservative when it comes to pricing insurance, particularly early on. You know, they say they like to have five to seven years of data, which means, and sort of I'd say their incentive is maybe even to overprice at the beginning so they don't get caught upside down. I might not be a very satisfying answer, but I think that's kind of the truth. Long term, I would expect, again, that it'll be very sort of expansionary and maybe bring prices down. I don't bet on that in the super short term.

I think more interesting in the short term is just how differentiated, you know, they are from the existing offering and therefore market expanding. On the issue of individual ownership and, you know, the particular Waymo-Toyota thing, I won't probably mention or talk about too much, but I think what it does is it validates that there are going to be a couple of phases of AV adoption. The first, of course, is very pilot and trial, and that's obviously where we are now. Over time, there will be, you know, owners of fleets, right? And today, those owners typically are the people who are designing and building the tech. You know, Waymo being obviously Exhibit A, they, you know, design the tech, they buy the cars from Jaguar, and then they own them themselves. Over time, you wouldn't expect that necessarily.

You would expect new companies like Marubeni and others, and even companies like Lyft at a small scale, to actually want to own the assets and manage the assets and so forth. I think in the medium and long term, you get to a very different and next level where individuals or maybe very small fleet owners of, you know, small groups of cars, you know, own cars. We're already planning for that very, very directly. This is why I think our Mobileye partnership is so important. Again, Mobileye, you know, they're the driver assistance technology that's in, you know, 800 different car models right now. They have very good relationships with OEMs, but it's level two, you know, kind of lane assist and so forth. They have a very clear strategy and a very clear roadmap.

We're dependent on that roadmap as we roll out in Texas with them to get to level four and level five. The idea there is that that technology won't just be in bespoke cars, you know, one or two OEMs or even one or two platforms within one or two OEMs, but rather ultimately universally available. As I've said before, I think there'll come a time, you know, call it the next 10 years, probably not much sooner than that, but 10 years where buying a car without an AV will be like buying a car without a radio. You know, it'd be, or actually, I think a better analogy is buying a stick shift car. I think that's a better analogy. You can buy a stick shift today. I happen to have one. They're awesome.

They're super fun to drive, but they're definitely the thing that you drive because you like to, not because you, you know, it may not be your, you know, best commuter option, you know, every single day. I think it'll be kind of like that. You know, there will be manual cars just as there are today, but increasingly AV will be everywhere. In that world, you know, this idea of Lyft Ready, every car being Lyft Ready, so that when you buy it, you can put it on the Lyft platform and have it generate, you know, revenue, have it sort of self-monetize, you might say, becomes very appealing. That's the world we're already building to. We know it's a long way away, but we also have a very long-term view on AVs.

I think you have to, again, for all the sort of short-term buzz there is and the flurry of press releases and so forth. That is one thing, but I think you have to have your eyes on the long term on this.

Operator (participant)

Your next question comes from the line of Michael Nathanson of Moffett Nathanson. Please go ahead.

Michael Nathanson (Partner and Senior Research Analyst)

Hey, good evening. Thank you for the question. To the extent you can talk about it, I know it's just announced, but I wanted to hear your thoughts on the ability to invest behind FreeNow and then maybe how you're thinking about the business mix between taxis and rideshare for FreeNow going forward versus where that mixture stands today. Then just quickly, David, as pricing increases subside, I'd love to hear about any changes you're seeing in consumer behavior that might lead them to spend more per month just because there's less sticker shock, right? If you open, you look at your morning commute, you're like, wow, it's too much. Then you start opening it, it's not going up as much, and they actually end up using it more than they would have in their prior budget.

If you're maybe seeing more shopping engagement at this point, maybe they haven't like transitioned into actual conversion yet, but anything there would be very helpful. Thank you.

David Risher (CEO)

Super perceptive questions, Michael. Why don't I do this? Maybe I'll talk just super briefly about kind of how we see FreeNow and sort of that mixed question you talked about. Maybe I can pass it to Erin to talk about investing behind it to the extent we can say anything, which to be honest won't be much. I see you smiling at me right now, which is fair. I will come back to talk about that communication and what we're seeing there. Briefly with FreeNow, maybe a thing to remember is that it is a taxi-first marketplace. Actually, I want to talk about this for a second because I think people's intuition can be a little bit sort of overweighted by maybe what you see in New York City when you think taxis, for example.

In Europe, just to be super clear, a taxi tends to be a sort of a premium product in most parts of Europe. You know, you might think of the London black cab. You might think of taking a Mercedes from the airport in, you know, in Frankfurt. You know, the drivers oftentimes are long-term drivers. You know, some of you might know, I lived in Barcelona for many years. Many of the taxi drivers I had had been doing it for years and years. It is a very sort of stable, very important part of the landscape there.

An enormous part of the ride-hailing industry in Europe, ride-hailing broadly, including taxis and personal vehicles and, you know, everything else on the street, you know, raise your hand, all the things, it's roughly, I think, a EUR 40 billion market, but roughly half of that is still offline. It's quite traditional. You know, it really is, it's people picking up the phone and calling a taxi. Literally, as I said, I can speak from personal experience here. This is exactly what I did when I lived in Europe. As much as I like the tech, you know, there are habits that are sort of hard to break.

Part of that, and the reason for that sort of stasis, is there just has not been a lot of innovation on the sort of taxi side in particular, in part because there are so many different individual fleet operators that do not really have the scale or the capital to expand what they are doing. FreeNow brings that, and it is why they have been so successful. It is why, you know, they really are the dominant player in that space. We continue to believe that is going to be the interesting point. As I say, it is sort of a higher, when you ask people, maybe ask a friend in Paris at some point how they feel about rideshare versus taxis, and often they will talk about how rideshare feels a little bit like a sort of a less-than experience, whereas taxis feels like a more-than experience.

We really want to lean into that. Now, country by country, things differ. There are some countries where personal vehicle kind of rideshare as we think of it in the U.S. is not legal. There are some where, anyway, country by country, and FreeNow is in nine countries, you know, each country has slightly different dynamics. I would not expect the overall approach really to change very much. They have a very good model, and we can bring a lot to that model, a lot. You know, there is a lot we know about the way pricing works and market dynamics and so forth that because of our scale and our history we have. And vice versa, they will bring a lot of fleet management expertise to us because, of course, every one of these taxi operations typically needs another fleet manager to work with.

The last thing I'll say there, as I kind of alluded to earlier, is I think to the extent that there's, you know, work to do and investments and stuff, and I'm not going to speak much about this, but, you know, there may be some infill opportunities within the markets we're already working in. I think maybe I can turn it over to Erin at this point.

Erin Brewer (CFO)

Yeah. So, you know, what I'd say, look, in FreeNow, we found a partner, you know, to we see opportunities to immediately fuel growth, unlock potential for partners, you know, level up the experience for drivers and riders alike. So we're excited about it. It obviously doubles our addressable market overall. The strategic purpose of this acquisition is fully aligned with the strategy that we outlined at Investor Day. You know, very specifically, we said we would, as part of our capital strategy, you know, responsible investment and attractive growth and margin expansion opportunities was important to us. This fits that bill. The first step, however, is to close the deal. We expect that to happen sometime in the second half of the year. You know, we'll start some foundational integration, and we'll continue to evaluate opportunities for growth over time.

That's what I would add there. Maybe I'll start with the second part of the question, which is around affordability. You know, what I would say, Michael, is, you know, affordability is not something that's new to Lyft. If you look at our overall product portfolio, this is something that we've emphasized in terms of, you know, a mode for every mood, so to speak, for a period of time. You think about things like Wait and Save, obviously, which has been a great feature overall for the company. That's certainly not a monolith if you think about the ridership, right? Wait and Save riders, you know, use the mode about a third of the time. They tend to take about 2x the rides. You know, again, affordability is not new.

I think that the breadth of our portfolio and even the growth that we highlighted in some of our prepared remarks at the higher end of our portfolio is a strength. That is where you're seeing, you know, more than 16% rides growth in the quarter. Really proud of that. David mentioned some of the stats in his opening remarks. I don't know, David, do you want to add anything to the affordability question?

David Risher (CEO)

I'll add and sort of, and maybe end exactly where, you know, kind of Michael was also going. I think what's so interesting about this idea of affordability, and you actually, you touched on this, Michael, is people think of it, I think, sort of in a maybe small way as, oh, well, you know, lower prices. It's sure. I mean, obviously, again, you know, you want a great cost position. You'll remember we took $330 million out of our cost position a couple of years ago to be able to afford to give great prices and great earnings to drivers and so forth. At a certain point, that becomes a little bit, you know, kind of just baseline. You have to start to innovate on top of that. I do think Price Lock is such a good example, and I'll tell you why.

Commute is now our largest use case. It's our largest use case. And remember, 10 years ago, commute was 0% of 0% of 0% rideshare. I mean, it didn't exist, right? Now it's a third of our rides, roughly. We're talking about an enormous part of people's daily lives. You think, why isn't everybody doing it? Remember, 150 billion rides a year, of which some gigantic number of commuter rides and a fraction of a fraction of a fraction are still on rideshare. So much of it is all the irritating things that rideshare sort of introduced over the years or didn't quite get right, like surge pricing being the single biggest one. So annoying, right? You're doing the same thing every day. Why should you pay something different every day? No one wants that. That's irritating.

On the other hand, gosh, is it great to sit in the back seat and be able to text or start your work or make a phone call or, you know, whatever, say goodbye to your spouse, you know, after you left because you did not get a chance to say goodbye. Whatever it is you want to do. It is a great service, but you got to take away some of the cruddy stuff. Price Lock does that. I can tell you that with the Price Lock membership, we introduced it a couple of quarters ago. It is now up 21% compared to Q4. Very interestingly, the retention rate is super high. It is greater than 70%. I think we have said 70% in the past. It is up to about 75% right now, which means that once people sign on, they do it again. That is a form of affordability, right?

It's sort of a normalization. It's kind of like, okay, the price is not going to bounce around. I kind of understand what it is. Maybe it's a little higher than I want it to be. I don't know, whatever, but at least I can understand what it is every day. I begin to understand the value. Little by little, by little, by little, it becomes part of more and more people's lives. That is very much the way we think about these things. We like when we see a product like this have such product-market fit because it shows that we've discovered something pretty important.

Michael Nathanson (Partner and Senior Research Analyst)

Thank you.

Operator (participant)

Your next question comes from the line of Nikhil Devnani of Bernstein. Please go ahead.

Nikhil Devnani (Internet Senior Analyst)

Hi. Thank you for taking my questions. I had two pleas. First, on the taxi initiative you're rolling out in the US, do you think this can accelerate your growth in 2025 and 2026? Just trying to get a sense for the scale of it. Is there a long process to bring more taxis online in more markets, or do you think this is something where you can move fairly quickly with new cities beyond St. Louis? My second question is around AV partnerships. Do the deals that Uber is striking today actually accelerate your ability to onboard partners because there is a playbook for these AV providers to rinse and repeat, so to speak?

Or do you feel like you need to be the first one in the door because fleets are still really small and experimental, so there aren't enough cars to go around just yet? Thank you.

David Risher (CEO)

Yeah. Hey, Nikhil, two good questions. Let me touch on both. I think, and I'm sorry, now I'm thinking about your last question so much that I've already forgotten your first. It's the second time I've done it today. Say the first one more time.

Nikhil Devnani (Internet Senior Analyst)

Just on the taxi initiative in the US and the rollout of more cities.

David Risher (CEO)

Yeah, yeah, of course. Sorry about that. The two-part question is always tricky. On that, look, as you said, just to sort of level set with everyone, yeah, we started in St. Louis. It is great. You know, I know you asked specifically about is it going to accelerate your growth. I'm not going to comment on that particularly. What I will say is when we look at our strategic initiatives over the course of the year, and we set these at the end of last, expanding our sort of access to fleets was quite important. It is important for a couple of reasons. Effectively, diversity of supply really matters. It matters at sort of one end with taxis. You know, we're doing it also when it comes to what we call the high-margin modes, particularly the black cars, which also tend to be fleet cars.

They have good economics. Typically, they insure in a different way from normal insurance with us. That is all good. I'm not going to, we've only talked about St. Louis so far, so I won't speculate beyond that. I will say it is an important part of what we're doing in the U.S. Again, when you hear the FreeNow acquisition, you understand that obviously their expertise is going to come in handy for us. On the AV side, it absolutely is not the case that you have to be first. It just isn't. The reason I say that is because even if fleets are limited, which is sort of maybe the premise behind the question, I guess you sort of put it both ways, right? You said either there's a playbook or there's a limitation.

You know, I would say, first of all, every AV provider has a very strong incentive to have multiple partners. I mean, it's just clear. No one wants to be beholden, right? That's why you don't see anything that looks really exclusive because that would just be sort of self-defeating. You know, there'll be supply constraints from time to time, of course. You know, maybe one person will get a little ahead of the other, you know, for a certain period of time in a certain city. I think that's very temporary. I think much more interesting, if I'm an AV supplier of equipment or what have you, is who is the partner who can better monetize and, frankly, that I can sort of work with better? You know, who brings more to the table? You know, maybe it could be any number of things.

I won't characterize it too much. Obviously, we're very excited about the unique asset we have. We have the only sort of integrated fleet management solution to rideshare that's out there. That's obviously a huge advantage we have. I think that's probably more important at this point simply because, you know, I think really at the end, just to be super honest, I think most suppliers have an incentive to bring on, you know, at least two partners, right, so that they can differentiate, excuse me, so that they can sort of diversify and also not be beholden to anyone.

Nikhil Devnani (Internet Senior Analyst)

Thanks, David.

David Risher (CEO)

Sure.

Operator (participant)

Your next question comes from the line of Stephen Ju at UBS. Please go ahead.

Stephen Ju (Managing Director and Senior Internet Equity Research Analyst)

Okay. Thank you so much. David, I think when you offered Lyft Media targets back at the Investor Day, I think there was some amount of skepticism in the market as to whether you can actually hit those goals over the next few years. There was a very interesting angle, I thought, where to offer retailers and merchants traffic based on the user's destination, especially if they're headed to your store, right? You know, that sets you up to potentially onboard performance ad budgets. Can you talk about how this is progressing and how the outreach efforts to these performance advertisers and undoubtedly also to the awareness and brand upper funnel advertisers, how that's been progressing? Thanks.

David Risher (CEO)

Sure. Yeah. Great question. And good memory. Let's start big picture first, and then we'll kind of dive in. At the time, yeah, I remember the skepticism. That was not lost on me. We're on track, as we said before, to reach a $100 million run rate at the end of the year. Very much on track and feel quite good about that. I will also say, by the way, quite good about the leader who's getting us there, Susie. I've mentioned her in the past. She really helped build YouTube's ad platform and then Wave later. Anyway, I cut break. Actually, as long as I'm bragging on people, I'll brag on the whole team there. It's an extraordinary team. We're actually adding new folks. In fact, we just got a new person on yesterday.

Super excited about how we're building that out. The results we've seen so far have been really strong. As I say, we're on track for $100 million. I think part of it is because, particularly, I'll come back to your point in a second, but particularly when we look at some of the big brand partnerships we have, we continue to see, and again, this is third-party data, but we continue to see third-party measurement platforms telling us that we have, this is their numbers, not ours, seven times the impact relative to the norm on brand perception. We still have about 10 times the standard click-through rate. Super good there. We're also expanding our formats.

Aaron mentioned Wait and Save a little while ago as a nice product from a consumer so that they can choose to wait a little longer and save some money. It's also nice for us because it gives us a little bit more time to engage with riders. We now have a new ad unit, which is sort of a vertical takeover video unit that takes over while you're waiting, right? You've got time on your hands while you're waiting and saving. Might as well use it, you know, checking out a movie trailer or kind of a brand activation or whatever. Very excited about it. Still early days, of course, in a lot of ways, but I feel very, very good about the platform we're building and the opportunity there is.

When it comes to what we internally called sponsored rides, yeah, we're still super excited about that. It's very much in experimentation mode. I think I don't actually have, I just don't know whether we can mention the partners live now. I'm not sure that we can. We have a couple of partners that we're working with to try that out and encouraging results. You know, there are certain things you try at small scale, and then you just don't know yet. I still have a lot of conviction around it.

I know that any, look, any store, any retailer, any, you know, restaurant, anyone who depends on, you know, that marginal person to walk in the door, you know, to make the, you know, sort of make the week or make the night, you know, they become very interested when they start talking to partners who can literally deliver effectively foot traffic to their door. Good memory. Nothing to share on it right now, but definitely an area where we've still got real conviction based on what we see.

Stephen Ju (Managing Director and Senior Internet Equity Research Analyst)

Thank you.

Operator (participant)

Your next question comes from the line of Doug Anmuth, JP Morgan. Please go ahead.

Doug Anmuth (Head of U.S. Internet Equity Research)

Thanks for taking the questions. I have two. Just as you continue to see strength in rides with the 200 basis points of acceleration, but pricing was down 3% year over year. Can you just talk about what's driving the lower gross bookings per ride, particularly as you continue to grow luxury modes and, you know, are you seeing more discounts and promotions or just industry-wide pricing dynamics tied to insurance easing? Then maybe on 2Q and just thinking about Delta, is there any shift or change from kind of how you were thinking about the 100 basis point impact to rides and 200 basis point impact from gross bookings? Thanks.

Erin Brewer (CFO)

Thanks, Doug. This is Erin. I'll take the question starting with gross bookings overall. You know, I'd start with framing that we remain very focused on penetrating that 161 billion private vehicle TAM that we've talked about, that we highlighted at our Investor Day. We continue to grow in our top markets. One of the, you know, and commute, David mentioned earlier, commute is particularly strong, which we're really proud of. One of the biggest opportunities for us is to really penetrate and grow in what have been historically underrepresented markets. You've heard us talk about Canada now for a while and our progress there, right? We grew that market 100% in 2024. We grew rides 55% in Q1. We're about to launch in Quebec and a few cities. We'll continue our growth path there.

In that market, overall gross bookings per ride is lower than the average in the U.S. Another area that we highlighted in our prepared remarks is underpenetrated markets in the U.S. This is not new. We've been kind of taking our formula for operational excellence and customer obsession more broadly in the U.S. We've seen fantastic results out of that. We highlighted, for example, in our prepared remarks, we talked about growth in Indianapolis, but it's, you know, cities like Indianapolis, Charlotte, you know, where we grew in both cases more than 30% year over year in Q1. You know, that's fantastic because we are continuing that really strong growth in active riders and frequency and in rideshare really is a great option across now multiple markets in addition to the growth of our top markets. There is a mixed impact.

That's the way you should think about that as you see some of that gross bookings per ride dynamic overall. Your second question as it relates to Delta, maybe just starting with the fact that the Delta partnership ended on April 7th. Still pretty early days. I think the right way to think about this is, you know, when you, whether you're entering or exiting a partnership like this, it tends to have an impact over time. In this case, that curve is going to depend on the offer that they're getting. Also, frankly, our efforts around retention and competitiveness, and we have amazing service levels, et cetera. Price and benefits are really just one part of the process, the decision-making process on behalf of the rider.

You know, the other thing is that our partnership, our past partnership with Delta, you know, offered more benefits than the one that there is today with the other guys. You know, there's a couple of different decision criteria, I think, that any rider is going to go through. Still relatively early days. We do still believe that over time this will have an impact of about 1% to our rides, about 2 percentage points to our gross bookings. That's how I would highlight those.

Doug Anmuth (Head of U.S. Internet Equity Research)

Great. Thank you, Erin.

Erin Brewer (CFO)

Yep.

Operator (participant)

Your next question comes from the line of Steven Fox of Fox Advisors. Please go ahead.

Steven Fox (Founder and Senior Research Analyst)

Hi, good afternoon. Just one question, just following up on that last one. If we think more deeply about the Q2 guidance in terms of ride growth and monetizing per ride basis, like what would be the sort of how you would directionally talk about it? Is there any consideration for any consumer spending risks? You know, and then where would be, you know, some of the things you've highlighted, you know, on this call about growth on different platforms, what would be the major drivers? Would it still be commute leading the way or something else? Thanks.

Yeah, sure. So, you know, again, starting at a high level, we provide a range overall for our guide. Our intention is for that range to bracket, you know, of course, for a number of different scenarios overall. We expect commute to continue to be strong. You know, we think this mix of the results of our efforts in some of these underpenetrated markets, we continue to see great momentum there. We think that will, you know, have an impact in the second quarter, as well as growth in our top markets. Some of those similar dynamics that I just talked about for Q1, I would expect to, you know, consider for Q2. Maybe I'll start with the consumer sentiment side. David, if you want to add anything. I think the headline here is we are just not seeing anything in our data.

As you know, we do not have a lot of leading indicators, but we are not seeing in our data signs of weakening. We see continued growth across modes, across different use cases overall. David, do you want to add anything to that?

David Risher (CEO)

I mean, you just said it. It's so interesting. You know, we can all probably talk openly about this. We all read the same headlines, but at the same time, when we look at the data, you know, we had our strongest ride week, I think the last week of March ever. And then even as recently as this past week, when we look at Cinco de Mayo, which is another area where people tend to take rideshare, super, super strong. Again, everyone understands the uncertainty in the future. Of course, we have a business that's sort of resilient to that. We can talk about that separately if you're interested. In terms of sentiment so far, things look strong.

Steven Fox (Founder and Senior Research Analyst)

Yeah, thank you. If you did want to follow up, I'd love to understand just the key headlines on how resilient the business could be in, you know, in a downturn. Thanks.

David Risher (CEO)

Sure. I mean, I think let's talk about the sector first before Lyft. I do think this sector has a certain amount of resilience built into it. If you look at demand, let's start with the basics, right? Is there demand there? There's definitely demand there. You know, and we see it week on week. Again, we've made this point in different ways now. This is part of people's daily lives. We've talked about commute a lot. You might talk about a much different part of the sort of spectrum, healthcare. I think our healthcare rides, it's called non-emergency medical transportation, have grown something like 30% year on year. This is literally people, you know, going to doctors and medical appointments and stuff, often paid for by somebody else. The point being that rides have become very foundational for a lot of people.

Demand is there. When you sort of look at the supply side, actually, hold on, let's talk more about demand. You could imagine a world where, let's say, tariffs increase the price of cars. You can imagine a world where, if that's the case, people become even more interested in rideshare because it's a lot more approachable to think of a, you know, $10 or $15 ride than it is a, you know, a $30,000 car that just got more expensive. You know, that's kind of interesting. I'll point to sort of broad data that says, in general, and of course, every economic downturn, if there is such a thing, is a little different. In general, services tend to be more reliable than durable goods. Durable goods flux a little, but services tend to be somewhat more reliable.

Within that context, obviously, rideshare falls. And then when you look on the supply side, again, this is not any new data, but remember, you know, we have 1.4 million people who drive on the platform. And they like it. I'll come back to that in a second. But that's also quite an important part of a lot of people's lives. And remember, again, at almost a macroeconomic level, you know, it's actually quite stabilizing for the U.S. economy because what it sort of means is that if a person loses their job, which could happen, of course, in economic downturn times, you know, 48 hours later, literally 48 hours later, they could be driving and earning again. So, you know, just big picture again, it feels like a very, very stable place. You never say never. You don't know exactly what the future holds.

Certainly, we believe that we're very well positioned going to come what may.

Operator (participant)

Further questions at this time. With that, I will now turn the call to David Risher, Chief Executive Officer, for closing remarks. Please go ahead.

David Risher (CEO)

Yeah, thank you, everyone. Thank you, Aurelien. Thank you, Erin. Thank you, everyone on the team who's worked so hard to do all of the work we've done to put together a great quarter. I really appreciate everyone on the call, as always, and your support in Lyft. We've never been in a stronger position as we continue to deliver on our mission to serve and connect. Thank you all very much, and we will see you next time.

Operator (participant)

Ladies and gentlemen, this concludes today's conference call. We thank you for participating and ask that you please disconnect your line.