Lyft is doing great despite losing hundreds of millions in 2016

It wants be profitable by 2018.

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REUTERS/Stephen Lam
REUTERS/Stephen Lam

Lyft lost a lot of money last year, but it's doing better than ever. The ride-hailing company doesn't disclose its earnings, but according to The Information, it lost around $600 million in 2016 after generating $700 million in revenue. Sure, that loss is no joke, but its $700 million revenue is 250 percent higher than the $200.6 million the service generated in 2015. That's when it also also lost $412 million, which is twice the money it made. No wonder a spokesperson told the publication that they "have never been more optimistic about [their] future."

While the ride-sharing service did well overall, it wasn't all smooth-sailing for Lyft the whole year. The second quarter of 2016 was its worst quarter ever due to subsidies, marketing and incentives to get both drivers and riders to sign up. It only started recovering in the second half of the year by taking certain measures: it stopped offering free coupons, controlled the entry of new hires and reduced how much it spent in marketing. It also expanded and promoted its shared ride option Lyft Line, which makes more money than the standard Lyft

The publication says it's encouraging that both Uber's and Lyft's losses "as a percentage of total revenue are falling." However, they still need to find more ways to achieve profitability, such as getting drivers to stay, since it's spending so much to entice them to sign up. The company aims to keep reducing losses every quarter until it becomes profitable by 2018.

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