Riders getting into Lyft vehicles may soon be greeted with advertising as the company has confirmed it will start rolling out in-vehicle and rooftop displays.
The advertising push comes as the rideshare business has jumped in recent months and as competitor Uber (NYSE: UBER) targets $1 billion in advertising revenue by 2024. Lyft’s efforts will come through the newly formed Lyft Media business unit and could offer drivers a cut of the revenue pie, the Wall Street Journal reported.
“We hope to provide a place for advertisers and drivers to engage with our network, while ultimately providing independent opportunities for drivers to earn money,” Kenan Saleh, general manager of Lyft Media, told the Journal.
Advertising opportunities will be available to brands through digital ads sitting on the rooftops of cars and through in-vehicle tablets. Lyft expects to offer the service in about 25% of rides in Los Angeles by the end of this year as well as in three other cities, a spokesperson told the Journal.
Lyft (NASDAQ: LYFT) is also selling ads on the docking stations for bike-sharing services it owns, including City Bike in New York City and Bay Wheels in San Francisco. In 2020, it acquired Halo Cars, a rooftop advertising platform.
“Our vision is to build the world’s largest transportation media network, delivering value to advertisers while also elevating the platform experience for riders and drivers. Over the past two years, we’ve been growing our media business and are excited to share more details about our products, new partnerships and future plans,” Lyft wrote in a blog post Monday.
In the blog, Lyft said advertising channels include rooftop vehicle advertising through Lyft Halo, Lyft in-car tablets, Lyft Bikes and Lyft Skins, an in-app advertising channel.
“Across our media portfolio, we’ve already worked with hundreds of advertisers including DoorDash, Starbucks, HBO Max, Marriott and Google,” the company wrote. “We’re excited to partner with more brand and performance advertisers to help them effectively reach our unique transportation audience.”
In its second-quarter earnings announcement last week, Lyft reported a 15.9% increase in active riders from Q2 2021, with 19,860,000 accepting rides in the quarter.
Lyft topped analyst estimates of $989.1 million in revenue, reporting $990.7 million, a 30% year-over-year (y/y) increase and a 13% quarter-over-quarter jump. However, the company missed analyst estimates of a loss of 4 cents per share, losing $1.08 per share for the quarter.
The firm suffered a net loss of $377.2 million in Q2, far greater than the $196.9 million it lost the quarter prior. That’s also an increase from its net loss of $251.9 million in the same quarter last year. Lyft said losses for Q2 include $179.1 million of stock-based compensation and related payroll tax expenses.
Despite record-high fuel prices, Lyft CEO Logan Green said the company attracted more drivers to its platform in the quarter. Drivers saw their average hourly earnings increase 18% y/y to $37 per utilized hour.
In the quarter, Lyft laid off about 2% of its workforce and shut down its rental car business.
“We pulled back on discretionary spending and significantly slowed hiring,” Green said. “We reprioritized our R&D initiatives and reorganized teams to ensure laser focus on driving profitable growth. Our Q2 performance demonstrates our continued ability to navigate uncertain operating environments and deliver strong results.”
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