Lyft CEO addresses major typo in earnings report

Lyft CEO David Risher has finally addressed a typo on the company’s recent earnings report that caused the shares of the company to increase by 62% shortly after it was released.

On Feb.13, the ride-share company released its fourth-quarter earnings for 2023, and in the report, it said that Lyft would see its margin expansion, which is the rate of profit a company earns from its product or service, grow by 5%, or 500 basis points, in 2024. But minutes after the report was released, the company told investors in an earnings call that the number was incorrect, and that the margin will actually increase by 0.5%, or 50 basis points.

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“It was a bad error, and that’s on me,” said Risher while speaking to CNBC “Squawk Box” host Andrew Ross Sorkin. “But, I don’t want us to take an ounce of attention away from everyone at Lyft who busted their butts to deliver the best financial quarter in the company’s history. That’s really what I’m focused on.”

Before the earnings report was first released, shares for the company were selling for around $12 each. After the report was unveiled with the typo, the price for the company’s shares were almost $20 a piece.

Risher claims that an extra zero managed to slip into the company's earnings report even though it had “thousands of eyes” on it. He claims that after there was an increased amount of interest in the margin during an earnings call discussing the report, a team member investigated and spotted the error which he said made her “jaw drop.”

“Thank goodness we caught it pretty fast, and we issued an immediate correction,” he said.

Even after Lyft swiftly identified and fixed the error, its shares price decreased, but it is still higher than it was before the report was released as it is currently selling for around $16.39 each.

Reporting inaccurate information on a financial earnings report can have serious consequences. It can damage the reputation of a company and cause it to lose credibility. Investors can lose trust in a company even if the error on the report was unintentional.

Lenders may start to even look at a company as a risk for those mistakes and can charge it increased interest rates or become more cautious about giving it loans. Some mistakes on financial reports can even lead a company to face fines and penalties from the IRS.

Despite the recent mishap in its earnings report, Lyft appears to have delivered strong financial results during the last few months of 2023. The company beat analyst estimates of its gross bookings which generated $3.7 million in revenue, which is a 17% increase compared to the same time period in 2022. It also increased its revenue by 4% year-over-year, raking in $1.2 billion for the fourth quarter.

Risher’s clarifications on the error that caused a frenzy amongst investors come during a time where a plethora of Lyft drivers across multiple cities around the nation are at odds with the company. Justice for App Workers, which is a group of unionized rideshare and delivery drivers from multiple companies (including Lyft) organized a strike on Feb. 14 to protest harsh work conditions.

“Uber, Lyft, and delivery drivers are TIRED of being mistreated by the app companies,” reads the union’s press release announcing the strike. “We’re sick of working 80 hours/week just to make ends meet, being constantly scared for our safety, and worrying about being deactivated with the click of a button.”

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