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What changed in Lyft, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Lyft, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+550 added−552 removedSource: 10-K (2024-02-20) vs 10-K (2023-02-27)

Top changes in Lyft, Inc.'s 2023 10-K

550 paragraphs added · 552 removed · 418 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

58 edited+28 added−40 removed37 unchanged
Biggest changeThe ethnicity of our U.S. employees was 44% White, 30% Asian, 11% Hispanic or Latinx, 8% Black, and 6% two or more races, American Indian, Alaska Native, Native Hawaiian or other Pacific Islander. Our employee gender and ethnicity information is based on self-identification, and employees who did not disclose their gender or ethnicity have been excluded from the applicable disclosure.
Biggest changeOur employee gender and ethnicity information is based on self-identification, and employees who did not disclose their gender or ethnicity have been excluded from the applicable disclosure. As of December 31, 2023, employees who did not disclose gender represented approximately 3% of total employees, and employees who did not disclose ethnicity represented approximately 1% of total U.S. employees.
Laws, regulations and standards governing issues such as TNCs, public companies, ridesharing, worker classification, labor and employment, anti-discrimination, payments, gift cards, whistleblowing and worker confidentiality obligations, product liability, defects, recalls, auto maintenance and repairs, personal injury, text messaging, subscription services, intellectual property, securities, consumer protection, taxation, privacy, data security, competition, unionizing and collective action, antitrust, arbitration agreements and class action waiver provisions, terms of service, mobile application accessibility, autonomous vehicles, bike and scooter sharing, insurance, vehicle rentals, money transmittal, non-emergency medical transportation, healthcare fraud, waste, and abuse, environmental health and safety, greenhouse gas emissions, background checks, public health, anti-corruption, anti-bribery, political contributions, lobbying, import and export restrictions, trade and economic sanctions, foreign ownership and investment, foreign exchange controls and delivery of goods including (but not limited to) medical supplies, perishable foods and prescription drugs are often complex and subject to varying interpretations, in many cases due to their lack of specificity.
Laws, regulations and standards governing issues such as TNCs, public companies, ridesharing, worker classification, labor and employment, anti-discrimination, payments, gift cards, whistleblowing and worker confidentiality obligations, product liability, defects, recalls, auto maintenance and repairs, personal injury, advertising, text messaging, subscription services, intellectual property, securities, consumer protection, taxation, privacy, data security, competition, unionizing and collective action, antitrust, arbitration agreements and class action waiver provisions, terms of service, mobile application accessibility, autonomous vehicles, bike and scooter sharing, insurance, vehicle rentals, money transmittal, non-emergency medical transportation, healthcare fraud, waste, and abuse, environmental health and safety, greenhouse gas emissions, background checks, public health, anti-corruption, anti-bribery, political contributions, lobbying, import and export restrictions, trade and economic sanctions, foreign ownership and investment, foreign exchange controls and delivery of goods including (but not limited to) medical supplies, perishable foods and prescription drugs are often complex and subject to varying interpretations, in many cases due to their lack of specificity.
Utilizing machine learning capabilities to predict future behavior based on many years of historical data and use cases, we employ various levers to balance supply and demand in the 7 marketplace, creating increased driver earnings while maintaining strong service levels for riders. We also leverage our data science and algorithms to inform our product development.
Utilizing machine learning capabilities to predict future behavior based on many years of historical data and use cases, we employ various levers to balance supply and demand in the marketplace, creating increased driver earnings while maintaining strong service levels for riders. We also leverage our data science and algorithms to inform our product development.
We leverage our technology platform, the scale and density of our user network and insights from a significant number of rides to continuously improve our ridesharing marketplace efficiency and develop new offerings. We’ve also taken steps to ensure our network is well positioned to benefit from technological innovation in mobility.
We leverage our technology platform, the scale and density of our user network and insights from a significant number of rides to improve our ridesharing marketplace efficiency and develop new offerings. We’ve also taken steps to ensure our network is well positioned to benefit from technological innovation in mobility.
Anyone who rates a rider or driver three stars or fewer will never be matched with that individual again through the app. Government Regulation We are subject to a wide variety of laws and regulations in the United States and other jurisdictions.
Anyone who rates a rider or driver three stars or fewer will never be matched with that individual again through the app. 9 Government Regulation We are subject to a wide variety of laws and regulations in the United States and other jurisdictions.
We also provide centralized tools and enterprise transportation solutions, such as our Concierge offering, that enable organizations to manage the transportation needs of customers, employees and other constituents. • Grow Active Riders. We see opportunities to continue to grow our rider base.
We 7 also provide centralized tools and enterprise transportation solutions, such as our Concierge offering, that enable organizations to manage the transportation needs of customers, employees and other constituents. • Grow Active Riders. We see opportunities to continue to grow our rider base.
Our Transportation Network Our transportation network is comprised of: • Ridesharing Marketplace. Our core offering connects drivers with riders. The scale of our network enables us to predict demand and proactively incentivize drivers to be available for rides in the right place at the right time.
Our Transportation Network Our transportation network is primarily comprised of: • Ridesharing Marketplace. Our core offering connects drivers with riders. The scale of our network enables us to predict demand and proactively incentivize drivers to be available for rides in the right place at the right time.
We plan to continue to grow our ridesharing marketplace by prioritizing competitive service levels and attracting and retaining more drivers and riders on our network. Additionally, we will continue to evaluate ways to expand our network coverage beyond the geographies and markets we currently serve.
We plan to continue to grow our ridesharing marketplace by prioritizing competitive service levels and attracting and retaining more drivers and riders on our network. Additionally, we continue to evaluate ways to expand our network coverage beyond the geographies and markets we currently serve.
We work hard to provide riders with a quality experience every time they open the Lyft App, in order to earn the right to have Lyft be their transportation network of choice. Key benefits to riders on our platform include: • Selection and Convenience. We designed the Lyft App with a focus on simplicity, efficiency and convenience.
We work hard to provide riders with a quality experience every time they open the Lyft App, in order to earn the right to have Lyft be their transportation network of choice. Riders on our platform also have key benefits, which include: • Selection and Convenience. We designed the Lyft App with a focus on simplicity, efficiency and convenience.
The contents of our websites and corporate reports mentioned herein are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites or the contents of our websites are intended to be inactive textual references only. 13
The contents of our websites and corporate reports mentioned herein are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites or the contents of our websites are intended to be inactive textual references only. 12
We have a network of shared bikes and scooters (“Light Vehicles”) in a number of cities to address the needs of users who are looking for options that are more active and often more cost-effective and efficient for shorter trips. These modes can also help supplement the first-mile and last-mile of a multimodal trip with public transit. • Public Transit.
We have a network of shared bikes and scooters in a number of cities to address the needs of users who are looking for options that are more active and often more cost-effective and efficient for shorter trips. These transportation modes can also help supplement the first-mile and last-mile of a multimodal trip with public transit.
We founded Lyft in 2012 and changed our name to Lyft, Inc. in 2013 when we sold the assets related to our Zimride operations. 12 Available Information Our website is located at www.lyft.com, and our investor relations website is located at investor.lyft.com.
We founded Lyft in 2012 and changed our name to Lyft, Inc. in 2013 when we sold the assets related to our Zimride operations. 11 Available Information Our website is located at www.lyft.com, and our investor relations website is located at investor.lyft.com.
Trust is the foundation of our relationship with drivers and riders on our platform, and we take significant measures every day that are focused on their safety. 9 To ensure we are delivering exceptional service levels and upholding high quality standards, we have established our Safety and Customer Care, or SCC (formerly known as Customer Experience and Trust), team as a key part of our organization.
Trust is the foundation of our relationship with drivers and riders on our platform, and we take significant measures every day that are focused on their safety. To ensure we are delivering exceptional service levels and upholding high quality standards, we have established our Safety and Customer Care, or SCC, team as a key part of our organization.
Key benefits to drivers on our platform include: • Flexibility. We offer drivers the flexibility to generate income on their own schedule, so they can best prioritize what is important in their lives. • Technology.
Drivers on our platform also have key benefits, which include: • Flexibility. We offer drivers the flexibility to generate income on their own schedule, so they can best prioritize what is important in their lives. • Technology.
We announce material information to the public about us, our products and services and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, webcasts, the investor relations section of our website (investor.lyft.com), our Twitter accounts (@lyft, @Lyft_Comms, @johnzimmer and @logangreen) and our blogs (including: lyft.com/blog, lyft.com/hub and eng.lyft.com) in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD.
We announce material information to the public about us, our products and services and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, webcasts, the investor relations section of our website (investor.lyft.com), our X accounts (@lyft and @davidrisher) and our blogs (including: lyft.com/blog, lyft.com/hub and eng.lyft.com) in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD.
SCC is in charge of fielding safety and customer support inquiries and is available through multiple channels, including via self-service and assisted support directly within our apps. SCC aims to eliminate bad customer experiences, quickly resolve problems when they occur and maintain trust with drivers and riders.
SCC is in charge of fielding safety and customer support inquiries and is available through multiple channels, including via self-service and assisted support directly within our apps. SCC aims to listen to customers, quickly resolve problems when they occur and maintain trust with drivers and riders.
If a rider or driver feels uncomfortable or needs emergency assistance at any point, they are able to quickly connect with an ADT security professional, silently or by voice.
If a rider or driver feels uncomfortable or needs emergency assistance at any point, they are able to quickly connect with an ADT security professional through the Lyft App, silently or by voice.
Because we stand at a pivotal moment in the fight against climate change, Lyft made the commitment to reach 100% EVs on the Lyft Platform by the end of 2030.
Because we stand at a pivotal moment in the fight against climate change, Lyft strives to grow EVs on the platform. In 2020, we made a commitment to reach 100% EVs across the Lyft Platform by the end of 2030.
Competition The market for TaaS networks is intensely competitive and characterized by rapid changes in technology, shifting levels of supply and demand and frequent introductions of new services and offerings. We expect competition to continue, both from current competitors and new entrants in the market that may be well-established and enjoy greater resources or other strategic advantages.
Competition The market for Transportation-as-a-Service (“TaaS”) networks is intensely competitive and characterized by rapid changes in technology, shifting levels of demand and frequent introductions of new services and offerings. We expect competition to continue, both from current competitors and new entrants in the market that may be well-established and enjoy greater resources or other strategic advantages.
The more rides that are taken on our platform, the better we are able to offer riders personalized experiences most suitable to the trip being planned. • Availability. We strive to ensure that riders can get a ride when they want one.
The more rides that are taken on our platform, the better we are able to offer riders personalized experiences most suitable to their trip. • Availability and Reliability. We strive to ensure that riders can get a ride when they want one.
There are also a number of companies developing autonomous vehicle technology and TaaS offerings that may compete with us in the future, including Alphabet (Waymo), Amazon (Zoox), Apple, Aurora, Baidu, General Motors (Cruise), Motional, and Tesla as well as many other technology companies and automobile manufacturers and suppliers.
There are also a number of companies developing autonomous vehicle technology and TaaS offerings that may compete with us in the future, including Alphabet (Waymo), which is offering autonomous ride-hailing services in certain markets, Amazon (Zoox), Apple, Aurora, Baidu, General Motors (Cruise), Motional, and Tesla as well as many other technology companies and automobile manufacturers and suppliers.
Unless otherwise stated, riders are passengers who request rides from drivers in our ridesharing marketplace and renters of a shared bike, scooter or automobile, or have used services for car owners available in the Lyft App.
Unless otherwise stated, riders are passengers who request rides from drivers in our ridesharing marketplace and renters of a shared bike, scooter or automobile available on the Lyft App.
They represent all adult age groups and backgrounds and use Lyft to commute to and from work, explore their cities, spend more time at local businesses and stay out longer knowing they can get a reliable ride home.
Riders Riders are as diverse and dynamic as the communities we serve. They represent all adult age groups and backgrounds and use Lyft to commute to and from work, explore their cities, spend more time at local businesses and stay out longer knowing they can get a reliable ride home.
Our proprietary technology efficiently matches riders with drivers through advanced dispatching algorithms providing faster arrival times, localized pricing and maximum availability. Additional modes, such as Light Vehicles, offer riders more options for shorter trips.
Our proprietary technology efficiently matches riders with drivers through advanced dispatching algorithms providing faster arrival times, localized pricing and maximum availability. Additional transportation modes, such as Light Vehicles, offer more options for shorter trips. We also continue to launch new features, such as Women+ Connect.
We collect service fees and commissions from drivers for their use of our ridesharing marketplace. As drivers accept more rider leads and complete more rides, we earn more revenue.
We collect service fees and commissions from drivers for their use of our ridesharing marketplace. As drivers accept more rider leads, Gross Bookings 1 and Rides 1 increase, driving more revenue.
See the section titled “Risk Factors,” including the subsection titled “Risk Factors—Risks Related to Regulatory and Legal Factors” for additional information about the laws and regulations we are subject to and the risks to our business associated with such laws and regulations.
See the sections titled “Business” and “Risk Factors” including the subsections titled “Business – Environmental, Social and Corporate Governance - Environmental” and “Risk Factors—Risks Related to Regulatory and Legal Factors” for additional information about the laws and regulations we are subject to and the risks to our business associated with such laws and regulations.
Through our Express Drive program, drivers can enter into rental agreements with our independently managed subsidiary, Flexdrive, and our rental car partners for vehicles that may be used to provide ridesharing services on the Lyft Platform. • Lyft Rentals. In 2019, we launched Lyft Rentals to offer a rental car option for users who have long-distance trips.
Through our Express Drive program, drivers can enter into rental agreements with our independently managed subsidiary, Flexdrive, and our rental car partners for vehicles that may be used to provide ridesharing services on the Lyft Platform. • Light Vehicles.
Once a user enables this feature, a user’s trusted contacts (who they shared their location with) can see trip status and where they are on the map. • Emergency help, supported by ADT.
The Lyft App provides real-time ride tracking, so riders can share their exact location and route with family and friends. Once a user enables this feature, a user’s trusted contacts (who they shared their location with) can see trip status and where they are on the map. • Emergency help, supported by ADT.
In 2018, California passed first-of-its-kind legislation (the “California Clean Miles Standard and Incentive Program”) to mandate that TNCs reduce their GHG emissions on a GHG per passenger-mile basis, with additional requirements that TNCs increase the percentage of zero-emission vehicles on their platforms. Policymakers recently passed analogous legislation in Massachusetts and are considering similar rules in Oregon and New York City.
In 2018, California passed first-of-its-kind legislation (the “California Clean Miles Standard”) to mandate that TNCs increase the percentage of zero-emission vehicles on their platforms, with additional requirements to reduce their GHG emissions on a GHG per passenger-mile basis.
Our marketing efforts bring our brand to life across a variety of communication channels ranging from national broadcast campaigns to more direct communications like email and social media engagement. We also benefit from positive word of mouth in the existing Lyft rider and driver communities.
Our marketing efforts bring our brand to life across a variety of communication channels ranging from national broadcast campaigns to more direct communications like email and social media engagement.
Our predictive technology around ride volume and demand enables us to share key information with drivers about when and where to drive to maximize their earnings on a real-time basis. 6 • Transparent and Consistent Pay: We've released multiple features over the years aimed at providing transparency to drivers, including upfront pay, which enables drivers to see ride information and what they’ll earn before accepting a ride, and Weekly Pay Statement, which gives drivers a more clear and comprehensive view of earnings details. • Insurance.
Our predictive technology around ride volume and demand enables us to share key information with drivers about when and where to drive to maximize their earnings on a real-time basis. • Transparent and Consistent Pay: We've released multiple products over the years such as upfront pay where drivers can see ride information and what they’ll earn before accepting a ride.
Our marketing efforts educate people about Lyft products in creative and memorable ways and generate greater brand awareness among potential drivers and riders. Our brand marketing includes but is not limited to Lyft-produced content, culture and entertainment partnerships, marketing partnerships, and outdoor advertisements. We use specific channels and initiatives so we can measure the impact of our marketing spend.
We also benefit from positive word of mouth in the existing Lyft rider and driver communities. 8 Our marketing efforts educate people about Lyft products in creative and memorable ways and generate greater brand awareness among potential drivers and riders. Our brand marketing includes but is not limited to Lyft-produced content, culture and entertainment partnerships, marketing partnerships, and outdoor advertisements.
We also generate revenue from riders renting Light Vehicles, drivers renting vehicles through Express Drive, Lyft Rentals renters, car owners that use services available in the Lyft app, and by making our ridesharing marketplace available to organizations through our Lyft Business offerings, such as our Concierge and Lyft Pass programs.
We also generate revenue from riders renting Light Vehicles, drivers renting vehicles through Express Drive and by making our ridesharing marketplace available to organizations through our Lyft Business offerings, such as our Concierge and Lyft Pass programs. In 2021, we began generating revenues from licensing and data access agreements.
Item 1. Business. Our Mission Improve people’s lives with the world’s best transportation. Overview Lyft, Inc (the “Company” or “Lyft”) started a movement to revolutionize transportation. In 2012, we launched our peer-to-peer marketplace for on-demand ridesharing and have continued to pioneer innovations aligned with our mission.
Item 1. Business. Overview Lyft, Inc. (the “Company” or “Lyft”) started a movement to revolutionize transportation. In 2012, we launched our peer-to-peer marketplace for on-demand ridesharing and have continued to pioneer innovations. Today, Lyft is one of the largest multimodal transportation networks in the United States and Canada.
We also provide drivers with a suite of resources, including access to our on-demand, 24/7 support through our Driver app, to ensure drivers have the resources they need before taking the road. By making the driver experience better and better, we can retain and attract more drivers to Lyft’s network. • Invest in our Marketplace Technology.
For example, through our Express Drive program, drivers can get access to rental cars they can use for ridesharing. We also provide drivers with a suite of resources, including access to our on-demand, 24/7 support through our Driver app, to ensure drivers have the resources they need before taking the road. • Invest in our Marketplace Technology.
Additionally, there are other non-U.S.-based TaaS network companies, non-ridesharing transportation network companies and traditional automotive manufacturers that may expand into the United States and Canada.
We also compete with other manufacturers of bike and scooter sharing equipment for sales of such equipment, particularly in markets outside of the United States. Additionally, there are other non-U.S.-based TaaS network companies, non-ridesharing transportation network companies and traditional automotive manufacturers that may expand into the United States and Canada.
Similarly, in the United States, we also continuously check driving records so that we can promptly identify and remove drivers from the platform upon detection of a disqualifying violation. • Share location . The Lyft app provides real-time ride tracking, so riders can share their exact location and route with family and friends.
In the United States, continuous criminal monitoring allows us to quickly deactivate drivers with disqualifying criminal convictions. Similarly, in the United States, we also continuously check driving records so that we can promptly identify and remove drivers from the platform upon detection of a disqualifying violation. • Share location .
The Lyft network spans rideshare, car rentals, bikes, scooters, transit and vehicle services. By integrating the fragmented transportation ecosystem, we are well positioned to deliver the best holistic experience to all of our riders and to capture significantly more of our market opportunity. • Deliver Increasing Value to Drivers.
The Lyft network spans rideshare, bikes, and scooters and we are well positioned to deliver the best holistic experience to all of our riders and to capture significantly more of our market opportunity. • Deliver Increasing Value to Drivers. We strive to provide drivers that use Lyft with the best possible experience, including access to a variety of economic opportunities.
If someone signals they need help and subsequently does not respond to a call or text from ADT, ADT will contact 911 and share the user’s location and other relevant information. • Smart trip check-in. We monitor rides, and in some instances, if we notice a ride irregularity, we reach out to riders and drivers directly.
If someone signals they need help and subsequently does not respond to a call or text from ADT, ADT will contact 911 and share the user’s location and other relevant information. • Live safety support and specialized support and advocacy.
We believe that our brand represents freedom at your fingertips: freedom from the stresses of car ownership and freedom to do and see more. Through our LyftUp initiatives, we’re working to make sure people have access to affordable, reliable transportation to get where they need to go - no matter their income or zip code.
Through our Lyft Up initiatives, we’re working to make sure people have access to affordable, reliable transportation to get where they need to go - no matter their income or zip code.
Additional investments in our payments and data science capabilities have been central to making our network more efficient and seamless to use. 8 • Thoughtfully Pursue M&A and Strategic Partnerships.
Our investments in our proprietary technology allow us to deliver a convenient and high-quality experience to drivers and riders and additional investments in our payments and data science capabilities have been central to making our network more efficient and seamless to use.
Our Commitment to Safety A strong guiding principle since day one has been to build a community that drivers and riders trust.
We continue to engage with current riders through a variety of initiatives, including emails, in-app notifications, social media content, promotions, and more. Our Commitment to Safety A strong guiding principle since day one has been to build a community that drivers and riders trust.
Our ridesharing marketplace connects drivers with riders via the Lyft mobile application (the “Lyft App”) in cities across the United States and in select cities in Canada.
Our ridesharing marketplace connects drivers with riders via the Lyft mobile application (the “Lyft App”) in cities across the United States and in select cities in Canada. We have established a scaled network of users brought together by our robust technology platform (the “Lyft Platform”) that powers rides and connections every day.
Today, our offerings include an expanded set of transportation modes in select cities, such as access to a network of shared bikes and scooters (“Light Vehicles”) for shorter rides and first-mile and last-mile legs of multimodal trips, information about nearby public transit routes, and Lyft Rentals, an offering for renters who want to rent a car for a fixed period of time for personal use.
Our offerings on the Lyft App include an expanded set of transportation modes in select cities, such as access to a network of shared bikes and scooters (“Light Vehicles”) for shorter rides and first-mile and last-mile legs of multimodal trips. Substantially all of our revenue is generated from our ridesharing marketplace that connects drivers and riders.
In the second quarter of 2021, we began generating revenues from licensing and data access agreements. In 2022, we began generating revenues from the sale of bikes and bike station software and hardware sales substantially through our acquisition of PBSC Urban Solutions Inc (“PBSC”). We have made focused and substantial investments in support of our mission.
In 2022, we began generating revenues from the sale of bikes and bike station software and hardware sales substantially through our acquisition of PBSC Urban Solutions Inc (“PBSC”). Riders and drivers want and value choice, and we believe there remains an opportunity for growth in our marketplace.
We attract new drivers and riders through referrals, partnerships, display advertising, radio, video, social media, email, search engine optimization, keyword search campaigns, and more. We continue to engage with current riders through a variety of initiatives, including emails, in-app notifications, social media content, promotions, and more.
We use specific channels and initiatives so we can measure the impact of our marketing spend. We attract new drivers and riders through referrals, partnerships, display advertising, radio, video, social media, email, search engine optimization, keyword search campaigns, and more.
We offer drivers access to 24/7 support and earnings tools as well as education resources and other support to meet their personal goals. Riders Riders are as diverse and dynamic as the communities we serve.
To help us uphold high community standards, we give both drivers and riders the opportunity to rate each other after a ride booked through the Lyft App. • Support. We offer drivers access to 24/7 support and earnings tools as well as education resources and other support to meet their personal goals.
Our car rental program for drivers, including those who want to drive using our platform but do not have access to a vehicle that meets our requirements.
For the definition of Gross Bookings and Rides, refer to the “Definitions of Key Metrics” section within Item 7 of Part II of this Annual Report on Form 10-K. 5 • Express Drive. Our car rental program for drivers, including those who want to drive using our platform but do not have access to a vehicle that meets our requirements.
Every driver is required to pass a professionally administered criminal background check before they drive and each year after that. In the United States, continuous criminal monitoring allows us to quickly deactivate drivers with disqualifying criminal convictions.
Some measures we take to promote the safety of riders and drivers on the platform include: • Annual background checks and ongoing criminal monitoring . Every driver is required to pass a professionally administered criminal background check before they drive and each year after that.
Corporate Governance Our board of directors regularly evaluates our corporate governance structure and processes to help steer the company's direction and ensure it is operating with the utmost business integrity. More information about our directors, executive officers and corporate governance will be included in our definitive Proxy Statement for our 2023 Annual Meeting of Stockholders.
Corporate Governance Our board of directors regularly evaluates our environmental, social, and corporate governance policies to make sure they fit into our strategy of driving long-term stockholder value and align with our core values. More information about our directors, executive officers and corporate governance will be included in our definitive Proxy Statement for our 2024 Annual Meeting of Stockholders.
We procure insurance that helps protect transportation network company (“TNC”) drivers against financial losses related to automobile accidents while on the platform. • Community Standards. To help us uphold high community standards, we give both drivers and riders the opportunity to rate each other after a ride booked through the Lyft App. • Support.
We also launched the Weekly Pay Statement for a clearer, more comprehensive view of driver's pay details. • Insurance. We procure insurance that helps protect transportation network company (“TNC”) drivers against financial losses related to automobile accidents while on the platform. • Community Standards.
We leverage our proprietary dispatch platform and data to help drivers and riders connect efficiently and reduce wait times. • Affordability . Our platform empowers riders to choose from a broad set of transportation options to easily optimize for cost, comfort and time. • Safety .
If a ride is more than ten minutes late for a scheduled pick-up, we will offer up to $100 in Lyft credits to make up for it. • Affordability . Our platform empowers riders to choose from a broad set of transportation options to easily optimize for cost, comfort and time.
We are a company with a diverse customer base, and the more our employees reflect that diversity, the better we can serve our customers, ultimately making our business stronger. As of December 31, 2022, our employee base was 58% male and 40% female, and women represented 40% of our leadership overall.
We have not experienced any work stoppages and we consider our relations with our employees to be positive. We believe that achieving more diversity in workforce representation is an important priority. We are a company with a diverse customer base, and the more our employees reflect that diversity, the better we can serve our customers, ultimately making our business stronger.
Since day one, we have worked continuously to enhance the safety of our platform and the ridesharing industry by developing innovative products, policies and processes. Business Lyft is evolving how businesses large and small take care of their people’s transportation needs across sectors including corporate, healthcare, auto, education and government.
Wait & Save, a substantial and growing portion of rides, offers riders a way to save money when they aren’t in a hurry. • Safety . Since day one, we have worked continuously to enhance the safety of our platform and the ridesharing industry by developing innovative products, policies and processes.
We increased representation through our sourcing tool, hireEZ, and held disability and inclusion training for team members with the Inclusively and Direct Employers organizations. We also include additional team member information in our 2022 Environmental, Social, and Corporate Governance Report, which is available on our website.
In 2023, we continued our partnerships and outreach programs by holding partnership events with organizations that aim to increase diversity in enterprise hiring pools, such as BreakLine, Tribaja, and Disability:IN. We also maintained representation in our hiring pool through our sourcing tool, hireEZ, and held disability and inclusion training for team members with the Inclusively and Direct Employers organizations.
As of December 31, 2022, we had 4,419 employees and we maintain additional offices in multiple locations in the U.S. and internationally in Montreal, Canada, Munich, Germany and Minsk, Belarus. Approximately 41% of our employees work in our product management, engineering, design and science organizations. We believe that achieving more diversity in workforce representation is an important priority.
As of December 31, 2023, we had 2,945 employees and we maintain additional offices in multiple locations in the U.S. and internationally in Montreal, Canada, Mexico City, Mexico, Kyiv, Ukraine, Berlin, Germany, Munich, Germany and Minsk, Belarus. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
In 2022, we estimate that we provided access to over 4.6 million discounted or donated car, bike and scooter rides to help under-resourced communities access key resources.
We provided access to millions of discounted or donated rideshare, bikeshare, and shared scooter rides to help people in need.
We are also proud to be leaders in the fight against climate change. We’ve made the commitment to reach 100% electric vehicles (“EVs”) on the Lyft network by the end of 2030. We believe many users are loyal to Lyft because of our values, brand and commitment to social and environmental responsibility.
We’ve achieved significant growth in EV rides on our platform by investing in EV driver incentives, expanding the Express Drive EV rental program, helping drivers access discounted fast charging and advocating for smart EV policy. We believe many users are loyal to Lyft because of our values, brand and commitment to social and environmental responsibility.
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Today, Lyft is one of the largest multimodal transportation networks in the United States and Canada. We believe that the world is at the beginning of a shift away from car ownership to Transportation-as-a-Service (“TaaS”). Lyft is at the forefront of this massive societal change.
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We have an important purpose, which is to get riders out into the world so they can live their lives together, and to provide drivers a way to work that gives them control over their time and money.
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We believe that our ridesharing marketplace allows riders to use their cars less and offers a viable alternative to car ownership while providing drivers using our platform the freedom and independence to choose when, where, how long and on what platforms they work.
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In September 2023, we launched Women+ Connect, a new feature that offers women and nonbinary drivers the option to turn on a preference within the Lyft App to prioritize matches with nearby women and nonbinary riders.
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As this evolution continues, we believe there is a massive opportunity for us to improve the lives of riders by connecting them to more affordable and convenient transportation options. We are laser-focused on revolutionizing transportation. We have established a scaled network of users brought together by our robust technology platform (the “Lyft Platform”) that powers rides and connections every day.
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We are focused on delivering a great rideshare experience and will continue to innovate for drivers and riders, creating an increasingly differentiated service over time. We are committed to building a durable, healthy and profitable business for riders, drivers and shareholders. Additionally, we aim to advocate through our commitment to social and environmental responsibility.
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We believe our transportation network offers a viable alternative to car ownership. Additionally, for those Lyft riders who have a car, we also offer car maintenance, roadside assistance, and parking to meet them where they are in their transportation journey. Substantially all of our revenue is generated from our ridesharing marketplace that connects drivers and riders.
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We can’t talk about work that serves customer needs and social goals without mentioning our responsibility to our shared environment - the air we breathe and the resilience of communities we serve.
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For example, to continually launch new innovations on our platform, we have invested heavily in research and development and have completed multiple strategic acquisitions. We have also invested in sales and marketing to grow our community, cultivate a differentiated brand that resonates with drivers and riders and promote further brand awareness.
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We’re working to make the Lyft Platform more sustainable by helping drivers transition to electric vehicles (“EVs”), riders take more sustainable transportation modes, and businesses reduce their carbon footprint.
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Together, these investments have enabled us to create a powerful multimodal platform and scaled user network. To advance our mission, we aim to build the defining brand of our generation and to advocate through our commitment to social and environmental responsibility.
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In addition to our standard rideshare offering, riders can select a variety of other rideshare offerings which include, but are not limited to, Wait & Save, Priority Pickup, XL, Extra Comfort and Black. 1 Beginning in the third quarter of 2023, we began presenting Gross Bookings and Rides as our key business metrics, which we believe best align with how management assesses our performance and measures achievement against our strategic priorities and opportunities.
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As we recover from the impacts of COVID-19, we remain confident the demand for our offerings will continue to grow as more and more people discover new ways to experience Lyft, such as our bike and scooter offerings and even Lyft Pink, which offers riders exclusive perks and benefits. 5 Impact of COVID-19 to our Business The effects of the COVID-19 pandemic continue to impact communities globally.
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We leverage our proprietary dispatch platform and data to help drivers and riders connect efficiently and reduce wait times. As of November 2023, scheduled rides to the airport are backed by our on-time pickup promise in certain major markets.
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In March 2020, when it became apparent that COVID-19 was a pandemic, governments and private businesses - at the recommendation of public health officials - began enacting precautions to mitigate the spread of the virus, including travel restrictions and social distancing measures in many regions of the United States and Canada where we operate.
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We have a dedicated safety response team, a partnership with ADT, Inc. (“ADT”) to aid in emergencies, and work with leading national organizations to inform our safety policies. We are always working to make Lyft as safe as we can. Business 6 We work with organizations across a wide range of industries to deliver transportation solutions.
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Many enterprises instituted and maintained work from home programs and limited the number of employees on site. Beginning in the middle of March 2020, the pandemic and these related responses caused decreased demand for our platform leading to decreased revenues as well as decreased earning opportunities for drivers on our platform.
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Our Safety team is standing by, ready to help via phone or chat, and every member of the Safety team is a credentialed victim advocate. Each member has training in trauma-informed care. • Smart trip check-in.
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Relative to the early days of the COVID-19 pandemic, we've seen a significant improvement in demand and in the health of our marketplace.
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We monitor rides for unusual activity, like long stops or route deviations, and in some instances, if we notice a ride irregularity, we reach out to riders and drivers directly.
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The extent to which our operations will continue to be impacted by the pandemic and related changes in work, travel and lifestyle trends will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge.
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Policymakers have since passed similar legislation in Massachusetts and New York City to grow EV TNC rides, and may do so in other jurisdictions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factor Summary Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause our actual results to be harmed, including risks regarding the following: General economic factors • the impact of the COVID-19 pandemic and responsive measures; • general macroeconomic conditions; • natural disasters, economic downturns, public health crises or political crises; Operational factors • our limited operating history; • our financial performance and any inability to achieve or maintain profitability in the future; • competition in our industries; • the unpredictability of our results of operations and uncertainty regarding the growth of the ridesharing and other markets; • our ability to attract and retain qualified drivers and riders; • our insurance coverage, the adequacy of our insurance reserves, and the ability of third-party insurance providers to service our auto-related insurance claims; • our reputation, brand, and company culture; • illegal or improper activity of users of our platform; • the accuracy of background checks on potential or current drivers and our third party providers' ability to effectively conduct such background checks; • changes to our pricing practices; • the growth and development of our network of Light Vehicles and the quality of our Light Vehicles; • our ability to manage our growth; • our autonomous vehicle technology, partnerships with other companies who offer autonomous vehicle technologies, and the overall development of the autonomous vehicle industry; • actual or perceived security or privacy breaches or incidents, as well as defects, errors or vulnerabilities in our technology and that of third-party providers or system failures and resulting interruptions in our availability or the availability of other systems and providers; • our reliance on third parties, such as Amazon Web Services, vehicle rental partners, payment processors and other service providers; • our ability to operate our Express Drive and Lyft Rentals programs; • the development of new offerings on our platform and management of the complexities of such expansion; • inaccuracies in or changes to our key metrics and estimates; • our ability to offer high-quality user support and to deal with fraud; 14 • our ability to effectively match riders on our Shared Rides offering, efficiently balance driver supply and rider demand on our Wait & Save offering and to manage our up-front pricing methodologies; • changes in the Internet, mobile device accessibility, mobile device operating systems and application marketplaces; • the interoperability of our platform across third-party applications and services; • factors relating to our intellectual property rights as well as the intellectual property rights of others; • our presence outside the United States and any future international expansion; Regulatory and Legal factors • the classification status of drivers on our platform; • changes in laws and the adoption and interpretation of administrative rules and regulations; • compliance with laws and regulations relating to privacy, data protection and the protection or transfer of personal data; • compliance with additional laws and regulations as we expand our offerings; • litigation resulting from violation of the Telephone Consumer Protection Act, antitrust, and other laws and regulations; • intellectual property litigation; • assertions from taxing authorities that we should have collected or in the future should collect additional taxes; • our ability to maintain an effective system of disclosure controls and internal control over financial reporting; • costs related to operating as a public company; • climate change and related regulatory developments; Financing and Transactional Risks • our future capital requirements and our ability to service our current and future debt, financial covenants and other operational restrictions contained in our current debt agreements, and counterparty risk with respect to our capped call transactions; • our ability to make and successfully integrate acquisitions and investments or complete divestitures, joint ventures, partnerships or other strategic transactions; • our tax liabilities, ability to use our net operating loss carryforwards and future changes in tax matters; Governance Risks and Risks related to Ownership of our Capital Stock • provisions of Delaware law and our certificate of incorporation and bylaws that may make a merger, tender offer or proxy contest difficult; • exclusive forum provisions in our bylaws; • the dual class structure of our common stock and its concentration of voting power with our Co-Founders; and • the volatility of the trading price of our Class A common stock.
Biggest changeRisk Factor Summary Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause our actual results to be harmed, including risks regarding the following: General economic factors • general macroeconomic conditions; • the impact of the COVID-19 pandemic and responsive measures; • natural disasters, economic downturns, public health crises or political crises; Operational factors • our limited operating history; • our financial performance and any inability to achieve or maintain profitability in the future; • competition in our industries; • the unpredictability of our results of operations and uncertainty regarding the growth of the ridesharing and other markets; • our ability to attract and retain qualified drivers and riders; • our insurance coverage, the adequacy of our insurance reserves, and the ability of third-party insurance providers to service our auto-related insurance claims; • our reputation and brand; • illegal or improper activity of users of our platform; • the accuracy of background checks on potential or current drivers and our third party providers' ability to effectively conduct such background checks; • changes to our pricing practices; • the growth and development of our network of Light Vehicles and the quality of and supply chain for our Light Vehicles; • our autonomous vehicle technology, partnerships with other companies who offer autonomous vehicle technologies, and the overall development of the autonomous vehicle industry; • claims from riders, drivers or third parties; • our ability to manage our growth; • actual or perceived security or privacy breaches or incidents and resulting interruptions in our availability or the availability of other systems and providers; • our reliance on third parties, such as Amazon Web Services, vehicle rental partners, payment processors and other service providers; • our ability to operate our Express Drive program; • our nascent advertising business, Lyft Media; • our use of artificial intelligence and machine learning; 13 • the development of new offerings on our platform and management of the complexities of such expansion; • inaccuracies in or changes to our key metrics and estimates; • our ability to offer high-quality user support and to deal with fraud; • our ability to effectively manage our Wait & Save offerings; • our ability to effectively manage our pricing methodologies; • our company culture; • our reliance on key personnel and our ability to attract and retain personnel; • changes in the Internet, mobile device accessibility, mobile device operating systems and application marketplaces; • the interoperability of our platform across third-party applications and services; • defects, errors or vulnerabilities in our technology and that of third-party providers or system failures; • factors relating to our intellectual property rights as well as the intellectual property rights of others; • our presence outside the United States and any future international expansion; Regulatory and Legal factors • changes in laws and the adoption and interpretation of administrative rules and regulations; • the classification status of drivers on our platform; • intellectual property litigation; • compliance with laws and regulations relating to privacy, data protection and the protection or transfer of personal data; • litigation and other proceedings arising in the ordinary course of our business; • compliance with additional laws and regulations as we expand our offerings; • our ability to maintain an effective system of disclosure controls and internal control over financial reporting; • changes in tax laws; • assertions from taxing authorities that we should have collected or in the future should collect additional taxes; • costs related to operating as a public company; • climate change and related regulatory developments; Financing and Transactional Risks • our future capital requirements and our ability to service our current and future debt, financial covenants and other operational restrictions contained in our current debt agreements, and counterparty risk with respect to our capped call transactions; • our ability to make and successfully integrate acquisitions and investments or complete divestitures, joint ventures, partnerships or other strategic transactions; • our tax liabilities, ability to use our net operating loss carryforwards and future changes in tax matters; Governance Risks and Risks related to Ownership of our Capital Stock • the dual class structure of our common stock, its concentration of voting power with our Co-Founders and its impact on our stock price; • the volatility of the trading price of our Class A common stock; • provisions of Delaware law and our certificate of incorporation and bylaws that may make a merger, tender offer or proxy contest difficult; and • exclusive forum provisions in our bylaws. 14 Risks Related to General Economic Factors A deterioration of general macroeconomic conditions could materially and adversely affect our business and financial results.
We rely on third-party background check providers to screen potential and existing drivers, and if such providers fail to provide accurate information, or if providers are unable to complete background checks because of data access restrictions, court closures or other unforeseen government shutdowns, or we do not maintain business relationships with them, our business, financial condition and results of operations could be adversely affected.
We rely on third-party background check providers to screen potential and existing drivers, and if such providers fail to provide accurate information, or if providers are unable to complete background checks because of data access restrictions, court closures or other unforeseen government shutdowns, or if we do not maintain business relationships with them, our business, financial condition and results of operations could be adversely affected.
Our apps have experienced fluctuations in number of downloads in the past, and we anticipate similar fluctuations in the future. Any of the foregoing risks could adversely affect our business, financial condition and results of operations.
Our apps have experienced fluctuations in the number of downloads in the past, and we anticipate similar fluctuations in the future. Any of the foregoing risks could adversely affect our business, financial condition and results of operations.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
If we fail to maintain an effective system of disclosure controls or internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
These transactions involve numerous risks, whether or not completed, any of which could harm our business and negatively affect our financial condition and results of operations, including: • intense competition for suitable acquisition and investment targets, which could increase transaction costs and adversely affect our ability to consummate deals on favorable or acceptable terms; • failure or material delay in closing a transaction; • transaction-related lawsuits or claims; • our ability to successfully obtain indemnification or representation and warranty insurance; • difficulties in integrating the technologies, operations, existing contracts and personnel of an acquired company; • challenges related to entering into new markets or geographies; • difficulties in retaining key employees or business partners of an acquired company; • diversion of financial and management resources from existing operations or alternative acquisition opportunities; • failure to realize the anticipated benefits or synergies of a transaction; • failure to identify the problems, liabilities or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, litigation, revenue recognition or other accounting practices, or employee or user issues; • acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and data security, as well as anti-bribery and anti-corruption laws, export controls, sanctions and industry-specific-regulation; • risks that regulatory bodies may enact new laws or promulgate new regulations that are adverse to an acquired company or business, or the risk that we become subject to new or additional regulatory burdens that affect our business in potentially unanticipated and significantly negative ways; • theft of our trade secrets or confidential information that we share with potential acquisition candidates; • risk that an acquired company or investment in new offerings cannibalizes a portion of our existing business; and • adverse market reaction to an acquisition.
These transactions involve numerous risks, whether or not completed, any of which could harm our business and negatively affect our financial condition and results of operations, including: • intense competition for suitable acquisition and investment targets, which could increase transaction costs and adversely affect our ability to consummate deals on favorable or acceptable terms; • failure or material delay in closing a transaction; • transaction-related lawsuits or claims; • our ability to successfully obtain indemnification or representation and warranty insurance; • difficulties in integrating the technologies, operations, existing contracts and personnel of an acquired company; • challenges related to entering into new markets or geographies; • difficulties in retaining key employees or business partners of an acquired company; • diversion of financial and management resources from existing operations or alternative acquisition opportunities; • failure to realize the anticipated benefits or synergies of a transaction; • failure to identify the problems, liabilities or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, litigation, revenue recognition or other accounting practices, or employee or user issues; • acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and data security, as well as anti-bribery and anti-corruption laws, export controls, sanctions and industry-specific-regulation; • risks that regulatory bodies may enact new laws or promulgate new regulations that are adverse to an acquired company or business, or the risk that we become subject to new or additional regulatory burdens that affect our business in potentially unanticipated and significantly negative ways; • theft of our trade secrets or confidential information that we share with potential acquisition candidates; • risk that an acquired company or investment in new offerings cannibalizes a portion of our existing business; and 46 • adverse market reaction to an acquisition.
We may incur significant operating expenses and may not be successful in our international expansion for a variety of reasons, including: • recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture across all of our offices; • competition from local incumbents that better understand the local market, may market and operate more effectively and may enjoy greater local affinity or awareness; 36 • differing demand dynamics, which may make our offerings less successful; • public health concerns or emergencies, such as the COVID-19 pandemic and other highly communicable diseases or viruses; • complying with varying laws and regulatory standards, including with respect to privacy, data protection, cybersecurity, tax, trade compliance and local regulatory restrictions and disclosure requirements; • ineffective legal protection of our intellectual property rights in certain countries or theft or unauthorized use or publication of our intellectual property and other confidential business information; • obtaining any required government approvals, licenses or other authorizations; • varying levels of Internet and mobile technology adoption and infrastructure; • currency exchange restrictions or costs and exchange rate fluctuations; • political, economic, or social instability, which has caused disruptions in certain of our office locations, including in Belarus and Ukraine as a result of the war; • tax policies, treaties or laws that could have an unfavorable business impact; and • limitations on the repatriation and investment of funds as well as foreign currency exchange restrictions.
We may incur significant operating expenses and may not be successful in our international expansion for a variety of reasons, including: • recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture across all of our offices; • competition from local incumbents that better understand the local market, may market and operate more effectively and may enjoy greater local affinity or awareness; • differing demand dynamics, which may make our offerings less successful; • public health concerns or emergencies, such as the COVID-19 pandemic and other highly communicable diseases or viruses; • complying with varying laws and regulatory standards, including with respect to privacy, data protection, cybersecurity, tax, trade compliance and local regulatory restrictions and disclosure requirements; • ineffective legal protection of our intellectual property rights in certain countries or theft or unauthorized use or publication of our intellectual property and other confidential business information; • obtaining any required government approvals, licenses or other authorizations; • varying levels of Internet and mobile technology adoption and infrastructure; • currency exchange restrictions or costs and exchange rate fluctuations; • political, economic, or social instability, which has caused disruptions in certain of our office locations, including in Belarus and Ukraine as a result of the war; • tax policies, treaties or laws that could have an unfavorable business impact; and • limitations on the repatriation and investment of funds as well as foreign currency exchange restrictions.
If we are held to have breached or failed to fully comply with all the terms and conditions of an open source software license, we could face infringement or other liability, or be required to seek costly licenses from third parties to continue providing our offerings on terms that are not economically feasible, to re-engineer our platform, to discontinue or delay the provision of our offerings if re-engineering could not be accomplished on a timely basis or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition and results of operations.
If we are held to have breached or failed to fully comply with all the terms and conditions of an open source software license, we could face infringement or other liability, or be required to seek costly licenses from third parties to continue providing our offerings on terms that are not economically feasible, to re-engineer our platform, 36 to discontinue or delay the provision of our offerings if re-engineering could not be accomplished on a timely basis or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition and results of operations.
If we do not continue to provide drivers with flexibility on our platform, compelling opportunities to increase earnings and other incentive programs, such as demand-based bonuses, that are comparable or superior to those of our competitors and other companies in the app-based work industry, or if drivers become dissatisfied with our programs and benefits or our requirements for drivers, including requirements regarding the vehicles they drive, we may fail to attract new drivers, retain current drivers or increase their utilization of our platform, or we may experience complaints, negative publicity, strikes or other work stoppages that could adversely affect our users and our business.
If we do not continue to provide drivers with flexibility on our platform, compelling opportunities to increase earnings and other incentive programs, such as demand-based bonuses, that are comparable or superior to those of our competitors and other companies in the app-based work industry or other industries, or if drivers become dissatisfied with our programs and benefits or our requirements for drivers, including requirements regarding the vehicles they drive, we may fail to attract new drivers, retain current drivers or increase their utilization of our platform, or we may experience complaints, negative publicity, strikes or other work stoppages that could adversely affect our users and our business.
To the extent that any of these auto manufacturers significantly curtail production, increase the 29 cost of purchasing cars or decline to provide cars to Flexdrive on terms or at prices consistent with past agreements, despite sourcing vehicles from the used car market and other efforts to mitigate, Flexdrive may be unable to obtain a sufficient number of vehicles for Lyft to operate the Express Drive business without significantly increasing fleet costs or reducing volumes.
To the extent that any of these auto manufacturers significantly curtail production, increase the cost of purchasing cars or decline to provide cars to Flexdrive on terms or at prices consistent with past agreements, despite sourcing vehicles from the used car market and other efforts to mitigate, Flexdrive may be unable to obtain a sufficient number of vehicles for Lyft to operate the Express Drive business without significantly increasing fleet costs or reducing volumes.
For example, it could: • make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and adverse changes in government regulation; • limit our flexibility in planning for, or reacting to, changes in our business and our industry; • place us at a disadvantage compared to our competitors who have less debt; • limit our ability to borrow additional amounts to fund acquisitions, for working capital and for other general corporate purposes; and • make an acquisition of our company less attractive or more difficult.
For example, it could: 47 • make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and adverse changes in government regulation; • limit our flexibility in planning for, or reacting to, changes in our business and our industry; • place us at a disadvantage compared to our competitors who have less debt; • limit our ability to borrow additional amounts to fund acquisitions, for working capital and for other general corporate purposes; and • make an acquisition of our company less attractive or more difficult.
Factors that could cause fluctuations in the trading price of our Class A common stock include the following: • price and volume fluctuations in the overall stock market from time to time, including fluctuations due to general economic uncertainty or negative market sentiment, in particular related to the COVID-19 pandemic; • volatility in the trading prices and trading volumes of technology stocks generally, or those in our industry, including fluctuations unrelated or disproportionate to the operating performance of those technology companies; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales or purchases of shares of our Class A common stock by us, our officers, or our significant stockholders, as well as the perception that such sales or purchases could occur; • issuance of shares of our Class A common stock, whether in connection with our equity incentive plans, an acquisition or upon conversion of some or all of our outstanding 2025 Notes; 49 • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; • the financial projections or goals we may provide to the public, any changes in those projections or goals or our failure to meet those projections or goals; • announcements by us or our competitors of new offerings or platform features; • investor sentiment and the public’s reaction to our press releases, earnings and other public announcements and filings with the SEC, or those of our competitors or others in our industry; • rumors and market speculation involving us or other companies in our industry; • short selling of our Class A common stock or related derivative securities; • actual or anticipated changes in our results of operations or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, services or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business or statements by public officials regarding potential new laws or regulations; • changes in accounting standards, policies, guidelines, interpretations or principles; • any significant change in our management or our board of directors; and • general economic conditions and slow or negative growth of our markets.
Factors that could cause fluctuations in the trading price of our Class A common stock include the following: • price and volume fluctuations in the overall stock market from time to time, including fluctuations due to general economic uncertainty or negative market sentiment; • volatility in the trading prices and trading volumes of technology stocks generally, or those in our industry, including fluctuations unrelated or disproportionate to the operating performance of those technology companies; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales or purchases of shares of our Class A common stock by us, our officers, or our significant stockholders, as well as the perception that such sales or purchases could occur; 49 • issuance of shares of our Class A common stock, whether in connection with our equity incentive plans, an acquisition or upon conversion of some or all of our outstanding 2025 Notes; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; • the financial projections or goals we may provide to the public, any changes in those projections or goals or our failure to meet those projections or goals; • announcements by us or our competitors of new offerings or platform features; • investor sentiment and the public’s reaction to our press releases, earnings and other public announcements and filings with the SEC, or those of our competitors or others in our industry; • rumors and market speculation involving us or other companies in our industry; • short selling of our Class A common stock or related derivative securities; • actual or anticipated changes in our results of operations or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, services or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business or statements by public officials regarding potential new laws or regulations; • changes in accounting standards, policies, guidelines, interpretations or principles; • any significant change in our management or our board of directors; and • general economic conditions and slow or negative growth of our markets.
In particular, any violation of applicable anti-corruption, anti-bribery, export controls, sanctions and similar laws could result in adverse media coverage, investigations, significant legal fees, loss of export privileges, severe criminal or civil penalties or suspension or debarment from U.S. government contracts, and/or substantial diversion of management’s attention, all of which could have an adverse effect on our reputation, brand, business, financial condition and results of operations.
In particular, any violation of applicable anti-corruption, anti-bribery, lobbying, export controls, sanctions and similar laws could result in adverse media coverage, investigations, significant legal fees, loss of export privileges, severe criminal or civil penalties or suspension or debarment from U.S. government contracts, and/or substantial diversion of management’s attention, all of which could have an adverse effect on our reputation, brand, business, financial condition and results of operations.
Further, we have secured debt financing which has resulted in fixed obligations and certain restrictive covenants, and any debt financing secured by us in the future would result in increased fixed obligations and could involve additional restrictive covenants relating to our capital-raising activities and other financial and operational matters, as well as liens on some or all of our assets, which may make it more difficult for us to obtain additional capital and to pursue business opportunities.
Further, we have secured debt financing which has resulted in fixed obligations and certain restrictive covenants, and any debt financing secured by us in the future would result in increased fixed obligations and could involve additional restrictive covenants relating to our capital-raising activities and other financial and 45 operational matters, as well as liens on some or all of our assets, which may make it more difficult for us to obtain additional capital and to pursue business opportunities.
If investors or analysts do not consider our metrics to be accurate representations of our business or compare our metrics to third party estimates or similarly titled metrics of our competitors or others in our industry that are not calculated on the same basis, or if we discover material inaccuracies in our metrics, then the trading price of our Class A common stock and our business, financial condition and results of operations could be adversely affected.
If investors or analysts do not consider our metrics to be accurate representations of our business or compare our metrics to third party estimates or similarly titled metrics of our competitors or others in our industry 32 that are not calculated on the same basis, or if we discover material inaccuracies in our metrics, then the trading price of our Class A common stock and our business, financial condition and results of operations could be adversely affected.
If our arbitration agreements were found to be unenforceable, in whole or in part, or specific claims are required to be exempted from arbitration, we could experience an increase in our costs to litigate disputes and the time involved in resolving such disputes, and we could face increased exposure to potentially costly lawsuits, each of which could adversely affect our business, financial condition and results of operations.
If our arbitration agreements were found to be unenforceable, in 42 whole or in part, or specific claims are required to be exempted from arbitration, we could experience an increase in our costs to litigate disputes and the time involved in resolving such disputes, and we could face increased exposure to potentially costly lawsuits, each of which could adversely affect our business, financial condition and results of operations.
The market for TaaS networks is intensely competitive and characterized by rapid changes in technology, shifting levels of supply and demand and frequent introductions of new services and offerings. We expect competition to continue, both from current competitors and new entrants in the market that may be well-established and enjoy greater resources or other strategic or technological advantages.
The market for TaaS networks is intensely competitive and characterized by rapid changes in technology, shifting levels of supply and demand and frequent introductions of new services and offerings. We expect competition to continue, both from current 17 competitors and new entrants in the market that may be well-established and enjoy greater resources or other strategic or technological advantages.
In addition, if we do not achieve sufficient utilization of our asset-intensive offerings such as our network of Light Vehicles, our business, financial condition and results of operations could be adversely affected. 20 We rely substantially on our wholly-owned subsidiary and deductibles to insure auto-related risks and on third-party insurance policies to insure and reinsure our operations-related risks.
In addition, if we do not achieve sufficient utilization of our asset-intensive offerings such as our network of Light Vehicles, our business, financial condition and results of operations could be adversely affected. We rely substantially on our wholly-owned subsidiary and deductibles to insure auto-related risks and on third-party insurance policies to insure and reinsure our operations-related risks.
If a third-party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology or other intellectual property, which could require significant time (during which we 39 would be unable to continue to offer our affected offerings), effort and expense and may ultimately not be successful.
If a third-party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology or other intellectual property, which could require significant time (during which we would be unable to continue to offer our affected offerings), effort and expense and may ultimately not be successful.
Numerous local, municipal, state, federal and international laws and regulations address privacy, data protection and the collection, storing, sharing, use, disclosure and protection of certain data, including the 40 California Online Privacy Protection Act, the Personal Information Protection and Electronic Documents Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, Canada’s Anti-Spam Law, the Telephone Consumer Protection Act of 1991, or TCPA, the U.S.
Numerous local, municipal, state, federal and international laws and regulations address privacy, data protection and the collection, storing, sharing, use, disclosure and protection of certain data, including the California Online Privacy Protection Act, the Personal Information Protection and Electronic Documents Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, Canada’s Anti-Spam Law, the Telephone Consumer Protection Act of 1991, or TCPA, the U.S.
In particular, with laws and regulations such as the CCPA and CPRA imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws and regulations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.
In particular, with laws and 41 regulations such as the CCPA and CPRA imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws and regulations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.
These jurisdictions and governmental entities may reject our applications for permits, revoke existing or deny renewals of permits to operate, delay our ability to operate, increase their fees, charge new types of fees, or impose fines and penalties, including as a result of errors in, or failures to comply with, reporting or other requirements related to our product offerings.
These jurisdictions and governmental entities may reject our applications for permits, revoke or suspend existing or deny renewals of permits to operate, delay our ability to operate, increase their fees, charge new types of fees, or impose fines and penalties, including as a result of errors in, or failures to comply with, reporting or other requirements related to our product offerings.
In addition, the Internet infrastructure that we and users of our platform rely on in any particular 34 geographic area may be unable to support the demands placed upon it. Any such failure in Internet or mobile device accessibility, even for a short period of time, could adversely affect our results of operations.
In addition, the Internet infrastructure that we and users of our platform rely on in any particular geographic area may be unable to support the demands placed upon it. Any such failure in Internet or mobile device accessibility, even for a short period of time, could adversely affect our results of operations.
Additionally, since we are focused on building our community and ecosystems for the long-term, our near-term results of operations may be impacted by our investments in the future. If we are unable to successfully manage the complexities associated with our expanding multimodal platform, our business, financial condition and results of operations could be adversely affected.
Additionally, since we are focused on building our community and ecosystems for the long-term, our near-term results of operations may be impacted by our investments in the future. If we are unable to successfully manage the complexities associated with our multimodal platform, our business, financial condition and results of operations could be adversely affected.
Further, we may in certain circumstances be or become considered a government contractor with respect to certain of our services, which would expose us to 42 certain risks such as the government’s ability to unilaterally terminate contracts, the public sector’s budgetary cycles and funding authorization, and the government’s administrative and investigatory processes.
Further, we may in certain circumstances be or become considered a government contractor with respect to certain of our services, which would expose us to certain risks such as the government’s ability to unilaterally terminate contracts, the public sector’s budgetary cycles and funding authorization, and the government’s administrative and investigatory processes.
Any default under our debt arrangements could require that we repay our loans immediately, and may limit our ability to obtain additional financing, which in turn may have an adverse effect on our cash flows and liquidity. 47 Any of these factors could harm our business, results of operations and financial condition.
Any default under our debt arrangements could require that we repay our loans immediately, and may limit our ability to obtain additional financing, which in turn may have an adverse effect on our cash flows and liquidity. Any of these factors could harm our business, results of operations and financial condition.
We have scaled our business rapidly, and significant new initiatives have in the 31 past resulted in, and in the future may result in, operational challenges affecting our business. In addition, developing and launching new offerings and enhancements to our existing offerings may involve significant up-front capital investments and such investments may not generate sufficient returns on investment.
We have scaled our business rapidly, and significant new initiatives have in the past resulted in, and in the future may result in, operational challenges affecting our business. In addition, developing and launching new offerings and enhancements to our existing offerings may involve significant up-front capital investments and such investments may not generate sufficient returns on investment.
Any actual or perceived breach or incident affecting us or other parties with which we share data or processing data on our behalf could interrupt our operations, result in our platform being unavailable or otherwise disrupted, result in loss, alteration, unavailability or improper use or disclosure of data, result in fraudulent transfer of funds, harm our reputation and brand, damage our relationships with third-party partners, result in regulatory investigations and other proceedings, private claims, demands, litigation and other proceedings, loss of our ability to accept credit or debit card payments, increased card processing fees, and other significant legal, regulatory and financial exposure and lead to loss of driver or rider confidence in, or decreased use of, our platform, any of which could adversely affect our business, financial condition and results of operations.
Any actual or perceived breach or incident affecting us or other parties with which we share data or processing data on our behalf could interrupt our operations, result in our platform being unavailable or otherwise disrupted, result in loss, alteration, unavailability or unauthorized use, disclosure or other processing of data, result in fraudulent transfer of funds, harm our reputation and brand, damage our relationships with third-party partners, result in regulatory investigations and other proceedings, private claims, demands, litigation and other proceedings, loss of our ability to accept credit or debit card payments, increased card processing fees, and other significant legal, regulatory and financial exposure and lead to loss of driver or rider confidence in, or decreased use of, our platform, any of which could adversely affect our business, financial condition and results of operations.
Our ability to operate the Express Drive program has been negatively impacted as a result of mandated closures from time to time, limited staffing availability, and increased costs for us to operate rental sites and for Flexdrive to transport, repossess, clean, and store unrented and returned vehicles.
Our ability to operate the Express Drive program has been negatively impacted as a result of mandated closures from time to time, limited staffing availability, and increased costs for us to operate rental sites and for 15 Flexdrive to transport, repossess, clean, and store unrented and returned vehicles.
The automotive insurance industry has experienced rising costs due to, among other things, inflation, supply chain challenges, and the increasing cost of medical care, which has driven an increase in actual losses in recent periods, and we expect these costs to continue to drive increased actual losses.
The automotive insurance 20 industry has experienced rising costs due to, among other things, inflation, supply chain challenges, and the increasing cost of medical care, which has driven an increase in actual losses in recent periods, and we expect these costs to continue to drive increased actual losses.
We have agreed to reimburse our payment processors for fines they are assessed by payment card networks if we or the 30 users on our platform violate these rules. Any of the foregoing risks could adversely affect our business, financial condition and results of operations.
We have agreed to reimburse our payment processors for fines they are assessed by payment card networks if we or the users on our platform violate these rules. Any of the foregoing risks could adversely affect our business, financial condition and results of operations.
Such negative public perception may result from incidents on our platform, incidents on our partners’ or competitors’ platforms, or events around autonomous vehicles more generally. Any of the foregoing risks and challenges could adversely affect our prospects, business, financial condition and results of operations.
Such negative 25 public perception may result from incidents on our platform, incidents on our partners’ or competitors’ platforms, or events around autonomous vehicles more generally. Any of the foregoing risks and challenges could adversely affect our prospects, business, financial condition and results of operations.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks 17 successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations could be adversely affected.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations could be adversely affected.
Such challenges could result in tariff liabilities, including tariffs on past imports, as well as penalties and interest. Although we have reserved for potential payments of possible tariff liabilities in our financial statements, if these liabilities exceed such reserves, our financial condition could be harmed.
Such challenges could result in tariff liabilities, including tariffs on past imports, as well as penalties and interest. Although 24 we have reserved for potential payments of possible tariff liabilities in our financial statements, if these liabilities exceed such reserves, our financial condition could be harmed.
Any of the foregoing risks and challenges could adversely affect our business, financial condition and results of operations. 19 If we fail to cost-effectively attract and retain qualified drivers on our platform, or to increase the utilization of our platform by existing drivers, our business, financial condition and results of operations could be harmed.
Any of the foregoing risks and challenges could adversely affect our business, financial condition and results of operations. If we fail to cost-effectively attract and retain qualified drivers on our platform, or to increase the utilization of our platform by existing drivers, our business, financial condition and results of operations could be harmed.
Our success depends in part on the continued service of our founders, senior management team, key technical employees and other highly skilled personnel and on our ability to identify, hire, develop, motivate, retain and integrate highly qualified personnel for all areas of our organization.
Our success depends in part on the continued service of our senior management team, key technical employees and other highly skilled personnel and on our ability to identify, hire, develop, motivate, retain and integrate highly qualified personnel for all areas of our organization.
We have previously acquired and invested in, and we continue to seek to acquire and invest in businesses, technologies, or other assets that we believe could complement or expand our business, including acquisitions of new lines of business and other opportunities that operate 45 in relatively nascent markets.
We have previously acquired and invested in, and we continue to seek to acquire and invest in businesses, technologies, or other assets that we believe could complement or expand our business, including acquisitions of new lines of business and other opportunities that operate in relatively nascent markets.
In addition, any actual or perceived breach or incident impacting autonomous vehicles, whether through our platform or our competitors’, could result in legal, regulatory and financial exposure and lead to loss of rider confidence in our platform, which could significantly undermine our business.
In addition, any actual or perceived compromise, breach or incident impacting autonomous vehicles, whether through our platform or our competitors’, could result in legal, regulatory and financial exposure and lead to loss of rider confidence in our platform, which could significantly undermine our business.
If we cannot find alternate third-party background check providers on terms acceptable to us, we may not be able to timely onboard potential drivers, and as a result, our platform may be less attractive to qualified drivers.
If we cannot find alternate third-party background check providers on 22 terms acceptable to us, we may not be able to timely onboard potential drivers, and as a result, our platform may be less attractive to qualified drivers.
For example, we are subject to the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations of the SEC and the listing standards of the Nasdaq Stock Market.
For example, we are subject to the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations of the SEC and the listing standards 44 of the Nasdaq Stock Market.
Our management team may not successfully or efficiently manage being a public company subject to significant regulatory oversight and reporting 44 obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
Our management team may not successfully or efficiently manage being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
As we continue to expand into new geographic areas, we will be relying in part on referrals from our existing riders to attract new riders, and therefore we must ensure that our existing riders remain satisfied with our offerings.
As we continue to expand into new geographic areas, we will be relying in part on referrals from our 19 existing riders to attract new riders, and therefore we must ensure that our existing riders remain satisfied with our offerings.
Regardless of the 26 outcome of any legal proceeding, any injuries to, or deaths of, any riders, drivers or third parties could result in negative publicity and harm to our brand, reputation, business, financial condition and results of operations.
Regardless of the outcome of any legal proceeding, any injuries to, or deaths of, any riders, drivers or third parties could result in negative publicity and harm to our brand, reputation, business, financial condition and results of operations.
This competition has intensified in recent periods, and could continue to intensify for such personnel. To attract and retain top talent, we have had to offer, and we believe we will need to continue to offer, competitive compensation and benefits packages.
This competition has intensified in recent periods, and could continue to intensify for such personnel. To attract and retain top talent, we have had to offer, and we believe we will need to continue to offer, 34 competitive compensation and benefits packages.
With respect to our healthcare rides matched through the Lyft Platform and provided to Medicaid or Medicare Advantage beneficiaries, we are subject to healthcare fraud, waste and abuse laws that impose penalties for violations.
With respect to healthcare rides matched through the Lyft Platform and provided to Medicaid or Medicare Advantage beneficiaries, we are subject to healthcare fraud, waste and abuse laws that impose penalties for violations.
Any failure to timely and 35 effectively resolve any such errors, defects or vulnerabilities could adversely affect our business, financial condition and results of operations as well as negatively impact our reputation or brand.
Any failure to timely and effectively resolve any such errors, defects or vulnerabilities could adversely affect our business, financial condition and results of operations as well as negatively impact our reputation or brand.
A determination in, or settlement of, any legal proceeding, whether we are party to such legal proceeding or not, that involves our industry, could harm our business, financial condition and results of operations.
A determination in, resolution of, or settlement of, any legal proceeding, whether we are party to such legal proceeding or not, that involves our industry, could harm our business, financial condition and results of operations.
We design and contract to manufacture Light Vehicles and certain assets related to our network of shared Light Vehicles and have faced delays in manufacturing and delivery as well as increased costs associated with manufacturing and shipping.
We design and contract to manufacture Light Vehicles and certain assets related to our network of shared Light Vehicles and faced delays in manufacturing and delivery as well as increased costs associated with manufacturing and shipping.
Our ability to attract new qualified drivers and new riders, retain existing qualified drivers and existing riders and increase utilization of our offerings will depend in part on our ability to successfully create and introduce new offerings and to improve upon and enhance our existing offerings.
Our ability to attract new qualified drivers and new riders, retain existing qualified drivers and existing riders and increase utilization of our offerings will depend in part on our ability to successfully create and introduce new offerings and to improve upon 31 and enhance our existing offerings.
Negative perception of our platform or company may harm our reputation, brand and networks effects, including as a result of: • complaints or negative publicity about us, drivers on our platform, riders, our product offerings, pricing or our policies and guidelines, including our practices and policies with respect to drivers, or the ridesharing industry, even if factually incorrect or based on isolated incidents; • illegal, negligent, reckless or otherwise inappropriate behavior by drivers or riders or third parties, or concerns about the safety of our platform or ridesharing in general; • a failure to provide drivers with a sufficient level of ride requests, charge drivers competitive fees and commissions or provide drivers with competitive fares and incentives; • a failure to offer riders competitive ride pricing and pick-up times or the desired range of ride types; • actual or perceived disruptions of or defects in our platform, such as privacy or data security breaches or incidents, site outages, payment disruptions or other incidents that impact the reliability of our offerings; • litigation over, or investigations by regulators into, our platform or our business; • users’ lack of awareness of, or compliance with, our policies, changes to our policies that are negatively received, or a failure to enforce our policies in a manner perceived as effective, fair and transparent; • a failure to operate our business in a way that is consistent with our stated values and mission, including modification or discontinuation of our community or sustainability programs, illegal or otherwise inappropriate behavior by our management team or other employees or contracts, or negative perception of our treatment of employees; • inadequate or unsatisfactory user support service experiences; • negative responses by drivers or riders to new offerings on our platform; 22 • accidents, defects or other negative incidents involving autonomous vehicles or Light Vehicles on our platform or Light Vehicles sold to third parties; • political or social policies or activities, including our response to employee sentiment related to these matters; or • any of the foregoing with respect to our competitors, to the extent such resulting negative perception affects the public’s perception of us or our industry as a whole.
Negative perception of our platform or company may harm our reputation, brand and networks effects, including as a result of: • complaints or negative publicity about us, drivers on our platform, riders, our product offerings, our ability to deliver on product promises, pricing or our policies and guidelines, including our practices and policies with respect to drivers, or the ridesharing industry, even if factually incorrect or based on isolated incidents; • illegal, negligent, reckless or otherwise inappropriate behavior by drivers or riders or third parties, or concerns about the safety of our platform or ridesharing in general; • a failure to provide drivers with a sufficient level of ride requests, charge drivers fees and commissions that are competitive or provide drivers with competitive fares and incentives; • a failure to offer riders competitive ride pricing and pick-up times or the desired range of ride types; • actual or perceived disruptions of or defects in our platform, such as privacy or data security breaches or incidents, site outages, payment disruptions or other incidents that impact the reliability of our offerings; • litigation over, or investigations by regulators into, our platform or our business, including any adverse resolution of such litigation or investigations; 21 • users’ lack of awareness of, or compliance with, our policies, changes to our policies that are negatively received, or a failure to enforce our policies in a manner perceived as effective, fair and transparent; • a failure to operate our business in a way that is consistent with our stated values and mission, including modification or discontinuation of our community or sustainability programs, illegal or otherwise inappropriate behavior by our management team or other employees or contracts, or negative perception of our treatment of employees; • inadequate or unsatisfactory user support service experiences; • negative responses by drivers or riders to new offerings on our platform; • accidents, defects or other negative incidents involving autonomous vehicles or Light Vehicles on our platform or Light Vehicles sold to third parties; • political or social policies or activities, including our response to employee sentiment related to these matters; or • any of the foregoing with respect to our competitors, to the extent such resulting negative perception affects the public’s perception of us or our industry as a whole.
Likewise, if our autonomous vehicle technology partners are delayed or prevented from developing autonomous vehicle technology, our business, financial condition and results of operations could be adversely affected. For example, a general decrease in available capital, as well as an increase in regulatory scrutiny could delay or prevent the development of autonomous vehicle technology by our partners.
Likewise, if our current or future autonomous vehicle technology partners are delayed or prevented from developing autonomous vehicle technology, our business, financial condition and results of operations could be adversely affected. For example, a general decrease in available capital, as well as an increase in regulatory scrutiny could delay or prevent the development of autonomous vehicle technology by our partners.
We rely on third-party and affiliate vehicle rental partners for our Express Drive program and Lyft Rentals program, as well as third-party vehicle supply, fleet management and finance partners to support our Express Drive program, and if we cannot manage our relationships with such parties and other risks related to our Express Drive and Lyft Rentals program, our business, financial condition and results of operations could be adversely affected.
We rely on third-party and affiliate vehicle rental partners for our Express Drive program, as well as third-party vehicle supply, fleet management and finance partners to support our Express Drive program, and if we cannot manage our relationships with such parties and other risks related to our Express Drive program, our business, financial condition and results of operations could be adversely affected.
We are currently involved in several putative class actions, several representative actions brought, for example, pursuant to California’s Private Attorney General Act, several multi-plaintiff actions and thousands of individual claims, including those brought in arbitration or compelled pursuant to our Terms of Service to arbitration, challenging the classification of drivers on our platform as independent contractors.
We are currently involved in several putative class actions, several representative actions brought, for example, pursuant to California’s Private Attorneys General Act, several multi-plaintiff actions and thousands of individual claims, including those brought in arbitration or compelled pursuant to our Terms of Service to arbitration, challenging the classification of drivers on our platform as independent contractors.
As a result of the war in Ukraine, there may be a heightened risk of potential cyberattacks by state actors or others. Further, employee and service provider error, malfeasance or other vulnerabilities, bugs or errors in the storage, use or transmission of personal information could result in an actual or perceived breach or incident.
As a result of conflicts such as the war in Ukraine, there may be a heightened risk of potential cyberattacks by state actors or others. Further, employee and service provider error, malfeasance or other vulnerabilities, bugs or errors in the storage, use or transmission of personal information could result in an actual or perceived breach or incident.
Additionally, if we are unable to obtain necessary technology from third parties, we may be forced to acquire or develop alternate technology, which may require significant time and effort and may be of lower quality or performance standards and may subject us to certain risks discussed in the preceding paragraph that are currently borne by third parties.
Additionally, if we are unable to access necessary technology from third parties, we may be forced to acquire or develop alternate technology, which may require significant time and effort and may be of lower quality or performance standards and may subject us to certain risks discussed in the preceding paragraph that are currently borne by third parties.
The scope of data protection laws may continually change, through new legislation, amendments to existing legislation and changes in enforcement, and may be inconsistent from one jurisdiction to another. For example, the CPRA require new disclosures to California consumers and affords such consumers new data rights and abilities to opt-out of certain sharing of personal information.
The scope of data protection laws may continually change, through new legislation, amendments to existing legislation and changes in enforcement, and may be inconsistent from one jurisdiction to another. For example, the CPRA requires new disclosures to California consumers and affords such consumers new data rights and abilities to opt-out of certain sharing of personal information.
Additionally, the perception of concerns relating to privacy, data protection or information security, whether or not valid, may harm our reputation and brand and adversely affect our business, financial condition and results of operations. 41 We are regularly subject to claims, lawsuits, government investigations and other proceedings that may adversely affect our business, financial condition and results of operations.
Additionally, the perception of concerns relating to privacy, data protection or information security, whether or not valid, may harm our reputation and brand and adversely affect our business, financial condition and results of operations. We are regularly subject to claims, lawsuits, government and regulatory investigations and other proceedings that may adversely affect our business, financial condition and results of operations.
If we are unable to anticipate or successfully react to competitive challenges in a timely manner, our competitive position could weaken, or fail to improve, and we could experience fluctuations or a decline in market share, a decline in revenue or growth stagnation that could adversely affect our business, financial condition and results of operations.
If we are unable to anticipate or successfully react to competitive challenges in a timely manner, our competitive position could weaken, or fail to improve, and we could experience fluctuations or a decline in market share, a decline in gross bookings, revenue or growth stagnation that could adversely affect our business, financial condition and results of operations.
We have in the past incurred, and may in the future incur, losses from various types of fraud, including use of stolen or fraudulent credit card data, claims of unauthorized payments by a rider, attempted payments by riders with insufficient funds, fraud committed by drivers and fraud committed by riders in concert with drivers.
We have in the past incurred, and may in the future incur, losses from various types of fraud, including use of stolen or fraudulent credit card data, claims of unauthorized payments by a rider, attempted payments by riders with insufficient funds, fraud committed by drivers, riders or third parties, and fraud committed by riders in concert with drivers.
Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and also provide that the federal district courts will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.
Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and also provide that the federal district courts will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933 (as amended, the “Securities Act”), each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.
Therefore, our Co-Founders, individually or together, will be able to significantly influence matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions.
Therefore, our Co-Founders, individually or together, may be able to significantly influence matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions.
New laws and regulations and changes to existing laws and regulations continue to be adopted, implemented and interpreted in response to 37 our industry and related technologies.
New laws and regulations and changes to existing laws and regulations continue to be adopted, implemented and interpreted in response to our industry and related technologies.
As we grow, we also may explore investments in new technologies, which we may develop or other parties may develop. The identification, evaluation, and negotiation of potential acquisition or strategic investment transactions may divert the attention of management and entail various expenses, whether or not such transactions are ultimately completed.
We also may explore investments in new technologies, which we may develop or other parties may develop. The identification, evaluation, and negotiation of potential acquisition or strategic investment transactions may divert the attention of management and entail various expenses, whether or not such transactions are ultimately completed.
There is no assurance that these partnerships will result in the development of market-viable technologies or commercial success in a timely manner or at all. In order to gain acceptance, the reliability of autonomous vehicle technology must continue to advance.
There is no assurance that these current or future partnerships will result in the development of market-viable technologies or commercial success in a timely manner or at all. In order to gain acceptance, the reliability of autonomous vehicle technology must continue to advance.
We have tested or launched, and expect to in the future test or launch, new pricing strategies and initiatives, such as subscription packages and driver or rider loyalty programs. We have also modified, and expect to in the future modify, existing pricing methodologies, such as our up-front pricing policy.
We have tested or launched, and expect to in the future test or launch, new pricing strategies and initiatives, such as our earnings commitment, subscription packages and driver or rider loyalty programs. We have also modified, and expect to in the future modify, existing pricing methodologies, such as our up-front pricing policy.
If the public does not perceive ridesharing or our other offerings as beneficial, or chooses not to adopt them as a result of concerns regarding public health or safety, affordability or for other reasons, whether as a result of incidents on our platform or on our competitors’ platforms, the COVID-19 pandemic, or otherwise, then the market for our offerings may not further develop, may develop more slowly than we expect or may not achieve the growth potential we expect.
If the public does not perceive ridesharing or our other offerings as beneficial, or chooses not to adopt them as a result of concerns regarding public health or safety, affordability or for other reasons, whether as a result of incidents on our platform or on our competitors’ platforms, health concerns, or otherwise, then the market for our offerings may not further develop, may develop more slowly than we expect or may not achieve the growth potential we expect.
Risks and challenges we have faced or expect to face include our ability to: • forecast our revenue and operating results and budget for and manage our expenses; • attract new qualified drivers and new riders, and retain existing qualified drivers and existing riders in a cost-effective manner; • effectively and competitively price our services and determine appropriate pricing methodologies; • comply with existing and new or modified laws and regulations applicable to our business; • manage our platform and our business assets and expenses in light of the COVID-19 pandemic and related developments, including changes in rider behavior and demand for our services; • plan for and manage capital expenditures for our current and future offerings, including our network of Light Vehicles and certain vehicles in the Express Drive program, and manage our supply chain and supplier relationships related to our current and future offerings; • develop, manufacture, source, deploy, sell, maintain and ensure utilization of our assets, including our network of Light Vehicles, our Driver Hub, and certain vehicles in the Express Drive program; • anticipate and respond to macroeconomic changes and changes in market dynamics in the markets in which we operate; • maintain and enhance the value of our reputation and brand; • effectively manage our growth and business operations, including the impacts of the COVID-19 pandemic on our business; • successfully expand our geographic reach; • hire, integrate and retain talented people at all levels of our organization; • successfully develop new platform features, offerings and services to enhance the experience of users; and • right-size our real estate portfolio.
Risks and challenges we have faced and expect to face include our ability to: • forecast our gross bookings, revenue and operating results and budget for and manage our expenses; • attract new qualified drivers and new riders, and retain existing qualified drivers and existing riders in a cost-effective manner; • effectively and competitively price our services and determine appropriate pricing methodologies; • comply with existing and new or modified laws and regulations applicable to our business; • manage our platform and our business assets and expenses in light of economic and other developments, including changes in rider behavior and demand for our services; • plan for and manage capital expenditures for our current and future offerings, including our network of Light Vehicles and certain vehicles in the Express Drive program, and manage our supply chain and supplier relationships related to our current and future offerings; • develop, manufacture, source, deploy, sell, maintain and ensure utilization of our assets, including our network of Light Vehicles and certain vehicles in the Express Drive program; • anticipate and respond to macroeconomic changes and changes in market dynamics in the markets in which we operate; • maintain and enhance the value of our reputation and brand; • effectively manage our growth and business operations, including the impacts of the COVID-19 pandemic on our business; • successfully expand our geographic reach and manage our international operations; • hire, integrate and retain talented people at all levels of our organization; • successfully develop new platform features, offerings and services to enhance the experience of users; and 16 • right-size our real estate portfolio.
In addition, international expansion has increased our risks in complying with laws and standards in the U.S. and other jurisdictions, including with respect to customs, anti-corruption, anti-bribery, export controls and trade and economic sanctions.
In addition, international expansion has increased our risks in complying with laws and standards in the U.S. and other jurisdictions, including with respect to customs, anti-corruption, anti-bribery, political activity, export controls and trade and economic sanctions.
We continue to maintain that drivers on our platform are independent contractors in such legal and administrative proceedings and intend to continue to defend ourselves vigorously in these matters, but our arguments may ultimately be unsuccessful.
We continue to maintain that drivers on our platform are independent contractors in such legal and administrative proceedings and intend to continue to defend ourselves vigorously in these matters, as applicable, but our arguments may ultimately be unsuccessful.
Each Co-Founder’s voting power is as of December 31, 2022 and includes shares of Class A common stock expected to be issued upon the vesting of such Co-Founder’s RSUs within 60 days of December 31, 2022.
Each Co-Founder’s voting power is as of December 31, 2023 and includes shares of Class A common stock expected to be issued upon the vesting of such Co-Founder’s RSUs within 60 days of December 31, 2023.
Other factors outside of our control, such as the COVID-19 pandemic, concerns about personal health and safety, increases in the price of gasoline, vehicles or insurance, or concerns about the availability of government or other assistance programs if drivers continue to drive on our platform, may also reduce the number of drivers on our platform or their utilization of our platform, or impact our ability to onboard new drivers.
Other factors outside of our control, such as concerns about personal health and safety, increases in the price of gasoline, vehicles or insurance, or concerns about the availability of government or other assistance programs if drivers continue to drive on our platform, may also reduce the number of drivers on our platform or their utilization of our platform, or impact our ability to onboard new drivers.
If any of our third-party insurance providers or administrators who handle the claim on behalf of the third-party insurance providers become insolvent, they could be unable to pay any operations-related claims that we make.
If any of our third-party insurance providers or administrators who handle the claim on behalf of the third-party insurance providers become insolvent, they could be unable to pay any claims that we make.
These actions may adversely affect our ability to attract and retain personnel and maintain our culture. If we are not able to maintain our culture, our business, financial condition and results of operations could be adversely affected.
These actions may adversely affect employee morale, our culture and our ability to attract and retain personnel. If we are not able to maintain our culture, our business, financial condition and results of operations could be adversely affected.
To expand our rider base, we must appeal to new riders who have historically used other forms of transportation or other ridesharing or bike and scooter sharing platforms. We believe that our paid marketing initiatives have been critical in promoting awareness of our offerings, which in turn drives new rider growth and rider utilization.
To expand our rider base, we must appeal to new riders who have historically used other forms of transportation or other ridesharing or bike and scooter sharing platforms. We believe that our paid marketing initiatives have been and will continue to be critical in promoting awareness of our offerings, which in turn drives new rider growth and rider utilization.
As we expand our network of Light Vehicles, we are subject to an increasing number of claims, lawsuits, investigations or other legal proceedings related to injuries to, or deaths of, riders of our Light Vehicles, including potential indemnification claims.
As we operate our network of Light Vehicles, we are subject to an increasing number of claims, lawsuits, investigations or other legal proceedings related to injuries to, or deaths of, riders of our Light Vehicles, including potential indemnification claims.
Our ability to refinance any existing or future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
Our ability to refinance any existing or future indebtedness will depend on the capital markets, general macroeconomic conditions and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
These shifts have led us to reduce our real estate footprint and may increase the risk of a cybersecurity breach or incident, result in decreased productivity, harm our company culture, adversely affect our ability to timely and accurately report our financial statements or maintain internal controls, or otherwise negatively affect our business, our financial condition and results of operations could be adversely affected. • In response to the effects of the COVID-19 pandemic on our business, we have taken certain cost-cutting measures, including reductions-in-force, which may have adversely affected employee morale, our culture and our ability to attract and retain employees. • The COVID-19 pandemic has also impacted our business operations relating to our Light Vehicles, our Express Drive program, and our autonomous vehicle partners.
These shifts have led us to reduce our real estate footprint and may increase the risk of a cybersecurity breach or incident, result in decreased productivity, harm our company culture, adversely affect our ability to timely and accurately report our financial statements or maintain internal controls, or otherwise negatively affect our business, our financial condition and results of operations could be adversely affected. • In response to the effects of the COVID-19 pandemic and macroeconomic uncertainty on our business, we took certain cost-cutting measures, including reductions-in-force, which may have adversely affected employee morale, our culture and our ability to attract and retain employees. • The COVID-19 pandemic impacted our business operations relating to our Light Vehicles, our Express Drive program, and our autonomous vehicle partners.
These factors may allow our competitors or potential competitors to derive greater revenue and profits from their existing user bases, attract and retain qualified drivers and riders at lower costs, offer more attractive pricing on their platforms or respond more quickly to new and emerging technologies and trends.
These factors may allow our competitors or potential competitors to derive greater gross bookings, revenue and profits from their existing user bases, attract and retain qualified drivers and riders at lower costs, offer more attractive pricing on their platforms or respond more quickly to new and emerging technologies, revenue opportunities and trends.
We have been subject to intense regulatory pressure from state and municipal regulatory authorities across the United States and Canada, and a number of them have imposed limitations on ridesharing and bike and scooter sharing, and different jurisdictions adopted rules governing minimum driver earnings for ridesharing platforms.
We have been subject to intense regulatory pressure from state, provincial and municipal regulatory authorities across the United States and Canada, and a number of them have imposed limitations on ridesharing and bike and scooter sharing, and certain jurisdictions have adopted rules governing minimum driver earnings for ridesharing platforms.
Deteriorating macroeconomic conditions, including slower growth or recession, inflation, increases to fuel and other energy costs or vehicle costs, changes in the labor market or decreases in consumer spending power or confidence, are likely to result in decreased discretionary spending and reduced demand for our platform.
Deteriorating macroeconomic conditions, including slower growth or recession, inflation and related increases in interest rates, increases to fuel and other energy costs or vehicle costs, changes in the labor market or decreases in consumer spending power or confidence, are likely to result in decreased discretionary spending and reduced demand for our platform.
We have experienced and will likely continue to experience system failures and other events or conditions from time to time that interrupt the availability or reduce or affect the speed or functionality of our offerings. These events have resulted in, and similar future events could result in, losses of revenue.
We have experienced and will likely continue to experience system failures and other events or conditions from time to time that interrupt the availability or reduce or affect the speed or functionality of our offerings. These events have resulted in, and similar future events could result in, losses of revenue or additional costs and expenses.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters are located in San Francisco, California, and consist of approximately 309,000 square feet under lease agreements through May 31, 2030. We maintain additional offices in multiple locations in the U.S. and internationally in Montreal, Canada, Munich, Germany and Minsk, Belarus. We lease all of our facilities and do not own any real property.
Biggest changeItem 2. Properties. Our corporate headquarters are located in San Francisco, California, and consist of approximately 380,000 square feet under lease agreements through May 31, 2030. We maintain additional offices in multiple locations in the U.S. and internationally in Montreal, Canada, Mexico City, Mexico, Kyiv, Ukraine, Berlin, Germany, Munich, Germany and Minsk, Belarus.
We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.
We lease all of our facilities and do not own any real property. We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. 52 Recent Sale of Unregistered Securities and Use of Proceeds Recent Sale of Unregistered Securities None. Use of Proceeds None. Issuer Purchases of Equity Securities None. Item 6. [Reserved].
Biggest changeThe comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. 53 Recent Sale of Unregistered Securities and Use of Proceeds Recent Sale of Unregistered Securities None. Use of Proceeds None. Issuer Purchases of Equity Securities None. Item 6. [Reserved]. 54
As of December 31, 2022, there were six stockholders of record of our Class B common stock. All shares of Class B common stock are beneficially owned by either Logan Green or John Zimmer. Dividend Policy We have never paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future.
As of December 31, 2023, there were 6 stockholders of record of our Class B common stock. All shares of Class B common stock are beneficially owned by either Logan Green or John Zimmer. Dividend Policy We have never paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future.
Holders of Record As of December 31, 2022, there were approximately 246 stockholders of record of our Class A common stock. Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners represented by these record holders.
Holders of Record As of December 31, 2023, there were approximately 237 stockholders of record of our Class A common stock. Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners represented by these record holders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view Contribution, Contribution Margin, Adjusted EBITDA, and Adjusted EBITDA Margin in conjunction with their respective related GAAP financial measures. 67 The following table provides a reconciliation of gross profit, or revenue less cost of revenue, to Contribution (in millions): Year Ended December 31, 2022 2021 2020 (in millions) Revenue $ 4,095.1 $ 3,208.3 $ 2,364.7 Less cost of revenue (2,435.7) (1,702.3) (1,447.5) Gross profit 1,659.4 1,506.0 917.2 Gross profit margin 40.5 % 46.9 % 38.8 % Adjusted to exclude the following (as related to cost of revenue): Amortization of intangible assets 5.0 11.0 12.0 Stock-based compensation expense 44.1 39.5 28.7 Payroll tax expense related to stock-based compensation 1.2 1.8 1.5 Net amount from claims ceded under the Reinsurance Agreement (1)(2) 18.5 52.8 — Transactions related to certain legacy auto insurance liabilities (3)(4) — 20.2 62.5 Restructuring charges (5)(6) 1.6 — 3.5 Contribution (7) $ 1,729.8 $ 1,631.3 $ 1,025.4 Contribution Margin (7) 42.2 % 50.8 % 43.4 % _______________ (1) Reflects the net amount recognized on the statement of operations associated with claims ceded under the Reinsurance Agreement, including any losses related to the deferral gains on the statement of operations and any benefit from the amortization of the deferred gain in the same period, to help investors understand the ultimate economic benefit of the Reinsurance Agreement.
Biggest changeThe following table provides a reconciliation of net loss to Adjusted Net Income (Loss) (in millions): Year Ended December 31, 2023 2022 2021 Net loss $ (340.3) $ (1,584.5) $ (1,062.1) Adjusted for the following: Amortization of intangible assets 16.8 18.4 18.1 Stock-based compensation 484.5 750.8 724.6 Payroll tax expense related to stock-based compensation 12.5 17.0 31.5 Net amount from claims ceded under the Reinsurance Agreement (1)(2) — 18.5 52.8 Costs related to acquisitions and divestitures (3) — 2.3 (117.7) Transactions related to certain legacy auto insurance liabilities (4) — — 20.4 Restructuring charges (5)(6) 77.2 110.5 — Impairment charges (7) — 135.7 — Adjusted Net Income (Loss) (8) $ 250.7 $ (531.4) $ (332.6) _______________ (1) In the second quarter of 2022, we recorded a $36.8 million gain recognized in cost of revenue on the consolidated statement of operations related to the Commutation Transaction, which effectively commuted and settled the Reinsurance Agreement.
We offer various incentive programs to drivers that are recorded as reduction to revenue if we do not receive a distinct good or service in consideration or if we cannot reasonably estimate the fair value of goods or services received.
We offer various incentive programs to drivers that are recorded as reduction to revenue if we do not receive a distinct good or service in consideration or if we cannot reasonably estimate the fair value of goods or services received.
Investing Activities Cash provided by investing activities was $186.0 million for the year ended December 31, 2022, which primarily consisted of proceeds from sales and maturities of marketable securities of $4.0 billion, maturities of term deposits of $395.1 million and the sale of property and equipment of $129.8 million, partially offset by purchases of marketable securities of $4.0 billion, the acquisition of PBSC of $146.3 million, and purchases of property and equipment of $115.0 million.
Cash provided by investing activities was $186.0 million for the year ended December 31, 2022, which primarily consisted of proceeds from sales and maturities of marketable securities of $4.0 billion, maturities of term deposits of $395.1 million and the sale of property and equipment of $129.8 million, partially offset by purchases of marketable securities of $4.0 billion, the acquisition of PBSC of $146.3 million, and purchases of property and equipment of $115.0 million.
Financing Activities Cash used in financing activities was $87.5 million for the year ended December 31, 2022, which primarily consisted of repayment of loans of $67.6 million and principal payments on finance lease obligations for $34.8 million.
Cash used in financing activities was $87.5 million for the year ended December 31, 2022, which primarily consisted of repayment of loans of $67.6 million and principal payments on finance lease obligations for $34.8 million.
In November 3, 2022, we entered into a revolving credit agreement with certain lenders which provides for a $420 million revolving secured credit facility maturing on the earlier of (i) November 3, 2027 and (ii) February 13, 2025, if, as of such date, the Company’s Liquidity (as defined in the revolving credit agreement) minus the aggregate principal amount of the Company’s 2025 Notes outstanding on such date is less than $1.25 billion.
In November 3, 2022, we entered into the Revolving Credit Facility, which is a revolving credit agreement with certain lenders which provides for a $420 million revolving secured credit facility maturing on the earlier of (i) November 3, 2027 and (ii) February 13, 2025, if, as of such date, the Company’s Liquidity (as defined in the revolving credit agreement) minus the aggregate principal amount of the Company’s 2025 Notes outstanding on such date is less than $1.25 billion.
In addition, the credit facility contains restrictions on payments including cash payments of dividends. The Revolving Credit Facility provides for borrowings up to the amount of the facility, with a sublimit of $168 million for the issuance of letters of credit.
In addition, the Revolving Credit Facility contains restrictions on payments including cash payments of dividends. The Revolving Credit Facility provides for borrowings up to the amount of the facility, with a sublimit of $168 million for the issuance of letters of credit.
During the first quarter of 2020, we entered into a Novation Agreement for the transfer of certain legacy auto insurance liabilities between October 1, 2015 and September 30, 2018. Refer to Note 6 “Supplemental Financial Statement Information” to the consolidated financial statements for information regarding these transactions.
During the first quarter of 2020, we entered into a Novation Agreement for the transfer of certain legacy auto insurance liabilities between October 1, 2015 and September 30, 2018. Refer to Note 6 “Supplemental Financial Statement Information” to the consolidated financial statements regarding these transactions.
Consideration allocated to each performance obligation, the data delivery and vehicle access, are determined by assigning the relative fair value to each of the performance obligations. Revenue is recorded upon delivery of the rideshare data and ratably over the quarter for access to 56 fleet vehicles as our respective performance obligation is satisfied upon the delivery of each.
Consideration allocated to each performance obligation, the data delivery and vehicle access, are determined by assigning the relative fair value to each of the performance obligations. Revenue is recorded upon delivery of the rideshare data and ratably over the quarter for access to fleet vehicles as our respective performance obligation is satisfied upon the delivery of each.
We believe the adjustment to include sublease income to Adjusted EBITDA is useful to investors by enabling them to better assess our operating performance, including the benefits of recent transactions, by presenting sublease income as a contra-expense to the related lease charges within our operating expenses.
We believe the adjustment to include sublease income in Adjusted EBITDA is useful to investors by enabling them to better assess our operating performance, including the benefits of recent transactions, by presenting sublease income as a contra-expense to the related lease charges within our operating expenses.
An Active Rider is identified by a unique phone number. If a rider has two mobile phone numbers or changed their phone number and such rider took rides using both phone numbers during the quarter, that person would count as two Active Riders.
An Active Rider is identified by a unique phone number. If a rider has two mobile phone numbers or changed their phone number and that rider took rides using both phone numbers during the quarter, that person would count as two Active Riders.
Insurance Reserves We utilize both a wholly-owned captive insurance subsidiary and third-party insurance, which may include deductibles and self-insured retentions, to insure or reinsure costs including auto liability, uninsured and underinsured motorist, auto physical damage, first party injury coverages including personal injury protection under state law and general business liabilities up to certain limits.
Insurance Reserves and Insurance-related Accruals We utilize both a wholly-owned captive insurance subsidiary and third-party insurance, which may include deductibles and self-insured retentions, to insure or reinsure costs including auto liability, uninsured and underinsured motorist, auto physical damage, first party injury coverages including personal injury protection under state law and general business liabilities up to certain limits.
If, as a result of its qualitative assessment, it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amounts, the quantitative impairment test will be required. There was no impairment of goodwill recorded for the years ended December 31, 2022, 2021 and 2020.
If, as a result of its qualitative assessment, it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amounts, the quantitative impairment test will be required. There was no impairment of goodwill recorded for the years ended December 31, 2023, 2022 and 2021.
We are obligated to pay interest on loans under the credit facility and other customary fees for a credit facility of this size and type, including an upfront fee and an unused commitment fee. The interest rate for the credit facility is determined based on calculations using certain market rates as set forth in the credit agreement.
We are obligated to pay interest on loans under the Revolving Credit Facility and other customary fees for a credit facility of this size and type, including an upfront fee 70 and an unused commitment fee. The interest rate for the Revolving Credit Facility is determined based on calculations using certain market rates as set forth in the credit agreement.
(2) Includes a $36.8 million gain recognized in cost of revenue in the second quarter of 2022 on the consolidated statement of operations related to the Commutation Transaction, which effectively commuted and settled the Reinsurance Agreement. Refer to Note 6 "Supplemental Financial Statement Information" to the consolidated financial statements for information regarding the Commutation Transaction.
(3) Includes a $36.8 million gain recognized in cost of revenue in the second quarter of 2022 on the consolidated statement of operations related to the Commutation Transaction, which effectively commuted and settled the Reinsurance Agreement. Refer to Note 6 "Supplemental Financial Statement Information" to the consolidated financial statements for information regarding the Commutation Transaction.
The amortization of these deferred gains provided a benefit to cost of revenue over multiple periods equal to the excess benefits received. On June 21, 2022, PVIC and DARAG completed the Commutation Transaction, which effectively commuted and settled the previous Reinsurance Agreement.
The amortization of these deferred gains provided a benefit to cost of revenue over periods equal to the excess benefits received. On June 21, 2022, PVIC and DARAG completed the Commutation Transaction, which effectively commuted and settled the Reinsurance Agreement.
Revenue also consists of rental revenues recognized through leases or subleases primarily from Flexdrive, Lyft Rentals, and our network of Light Vehicles, which includes revenue generated from single-use ride fees paid by riders of Light Vehicles.
Revenue also consists of rental revenues recognized through leases or subleases primarily from Flexdrive and our network of Light Vehicles, which includes revenue generated from single-use ride fees paid by riders of Light Vehicles.
Discussions of fiscal year 2020 and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2021.
Discussions of fiscal year 2021 and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
As a result, the net amounts that will ultimately be paid to settle the liability and when amounts will be paid may significantly vary from the estimated amounts provided for in the consolidated balance sheets.
As a result, the net amounts that will ultimately be paid to settle the liabilities and when amounts will be paid may significantly vary from the estimated amounts provided for in the consolidated balance sheets.
Refer to Note 6 “Supplemental Financial Statement Information - Commutation of the Reinsurance Agreement” to the consolidated 57 financial statements for information regarding this transaction. Refer to Note 6 “Supplemental Financial Statement Information” to the consolidated financial statements for information regarding these transactions.
Refer to Note 6 “Supplemental Financial Statement Information - Commutation of the Reinsurance Agreement” to the consolidated financial 59 statements for information regarding this transaction. Refer to Note 6 “Supplemental Financial Statement Information” to the consolidated financial statements for information regarding these transactions.
(3) In the second quarter of 2021, we entered into a Reinsurance Agreement under which a third party reinsured certain legacy auto insurance liabilities.
(6) In the second quarter of 2021, we entered into the Reinsurance Agreement under which a third party reinsured certain legacy auto insurance liabilities.
(7) In the second quarter of 2021, we entered into a Reinsurance Agreement under which a third party reinsured certain legacy auto insurance liabilities.
(4) In the second quarter of 2021, we entered into a Reinsurance Agreement under which a third party reinsured certain legacy auto insurance liabilities.
We believe the adjustment to exclude these costs associated with transactions related to legacy insurance liabilities from Contribution and Adjusted EBITDA is useful to investors by enabling them to better assess our operating performance in the context of current period results and provide for better comparability with our historically disclosed Contribution and Adjusted EBITDA amounts.
We believe the adjustment to exclude these costs associated with transactions related to legacy insurance liabilities from Adjusted EBITDA and Adjusted Net Income (Loss) is useful to investors by enabling them to better assess our operating performance in the context of current period results and provide for better comparability with our historically disclosed Adjusted EBITDA and Adjusted Net Income (Loss) amounts.
We believe the adjustment to exclude this gain associated with the commutation of the Reinsurance Agreement from Contribution and Adjusted EBITDA is useful to investors by enabling them to better assess our operating performance in the context of current period results and provide for better comparability with our historically disclosed Contribution and Adjusted EBITDA amounts.
We believe the adjustment to exclude this gain associated with the commutation of the Reinsurance Agreement from Adjusted EBITDA and Adjusted Net Income (Loss) is useful to investors by enabling them to better assess our operating performance in the context of current period results and provide for better comparability with our historically disclosed Adjusted EBITDA and Adjusted Net Income (Loss) amounts.
Revenue derived from these offerings are recognized in accordance with ASC 606 58 as described in the Critical Accounting Policies and Estimates above and in Note 2 of the notes to our consolidated financial statements.
Revenue derived from these offerings is recognized in accordance with ASC 606 as described in the Critical Accounting Policies and Estimates above and in Note 2 of the notes to our consolidated financial statements.
Revenue derived from these offerings are recognized in accordance with ASC 842 as described in the Critical Accounting Policies and Estimates above and in Note 2 of the notes to our consolidated financial statements.
Revenue derived from 60 these offerings is recognized in accordance with ASC 842 as described in the Critical Accounting Policies and Estimates above and in Note 2 of the notes to our consolidated financial statements.
Losses ceded under the Reinsurance Agreement that exceed $271.5 million, but are below the aggregate limit of $434.5 million, resulted in the recognition of a deferred gain liability. The deferred gain liability was amortized and recognized as a benefit to the statement of operations over the estimated remaining settlement period of the ceded reserves.
Losses ceded under the Reinsurance Agreement that exceed $271.5 million, but are below the aggregate limit of $434.5 million, result in the recognition of a deferred gain liability. The deferred gain liability is amortized and recognized as a benefit to the statement of operations over the estimated remaining settlement period of the ceded reserves.
Reconciliation of Non-GAAP Financial Measures We use Contribution, Contribution Margin, Adjusted EBITDA, and Adjusted EBITDA Margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance.
Reconciliation of Non-GAAP Financial Measures We use our non-GAAP financial measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance.
(6) Includes third-party costs incurred related to our acquisition of PBSC in the second quarter of 2022 and our transaction with Woven Planet in the second quarter of 2021. In the third quarter of 2022, this includes adjustments to the contingent consideration related to our acquisition of PBSC.
(5) Includes third-party costs incurred related to our acquisition of PBSC in the second quarter of 2022 and our transaction with Woven Planet in the second quarter of 2021. This also includes adjustments to the contingent consideration related to our acquisition of PBSC in the third quarter of 2022.
The settlement period of the ceded reserves was based on the life-to-date cumulative losses collected and extended over periods longer than a quarter. The amount of the deferral that was amortized was recalculated each period based on loss payments and updated estimates of the portfolio’s total losses.
The settlement period of the ceded reserves is based on the life-to-date cumulative losses collected and likely extends over periods longer than a quarter. The amount of the deferral that is amortized was recalculated each period based on loss payments and updated estimates of the portfolio’s total losses.
In the first quarter of 2023, we expect to finalize the exit of certain leases as part of the plan of termination and we completed a transaction for the divestiture of certain assets related to our first party vehicle services business to align with our anticipated operating needs.
In the first quarter of 2023, we finalized the exit of certain leases as part of the 2022 plan of termination and we completed a transaction for the divestiture of certain assets related to our first party vehicle services business to align with our anticipated operating needs.
This section of this Form 10-K generally discusses fiscal years 2022 and 2021 and year-to-year comparisons between 2022 and 2021.
This section of this Form 10-K generally discusses fiscal years 2023 and 2022 and year-to-year comparisons between 2023 and 2022.
When the amount and timing of the reinsurance recoveries were uncertain, the recovery method was used to calculate the amount of amortization in period. The deferral of gains had a negative impact in respective periods to cost of revenue as the losses on direct liabilities were not offset by gains from excess benefits under the Reinsurance Agreement.
When the amount and timing of the reinsurance recoveries are uncertain, the recovery method should be used to calculate the amount of amortization in period. The deferral of gains had a negative impact in respective period to cost of revenue as the losses on direct liabilities were not offset by gains from excess benefits under the Reinsurance Agreement.
The total impact of the transaction to reinsure certain legacy auto insurance liabilities on our consolidated statement of operations was $20.4 million, with $20.2 million in cost of revenue and $0.2 million in general and administrative expense in the year ended December 31, 2021. (4) In the first quarter of 2020, we transferred certain legacy auto insurance liabilities.
The total impact of the transaction to reinsure certain legacy auto insurance liabilities on our consolidated statement of operations was $20.4 million, with $20.2 million in cost of revenue and $0.2 million in general and administrative expense in the year ended December 31, 2021.
We calculate Adjusted EBITDA as net loss, adjusted for: • interest expense; • other income (expense), net; • provision for (benefit from) income taxes; • depreciation and amortization; • stock-based compensation; • payroll tax expense related to stock-based compensation; • net amount from claims ceded under the Reinsurance Agreement; • sublease income; • costs related to acquisitions and divestitures, if any; and • restructuring charges, if any.
We calculate Adjusted EBITDA as net loss, adjusted for: • interest expense; • other income (expense), net; • provision for (benefit from) income taxes; • depreciation and amortization; • stock-based compensation; • payroll tax expense related to stock-based compensation; • net amount from claims ceded under the Reinsurance Agreement; • sublease income; • transaction costs related to certain legacy auto insurance liabilities, if any; • costs related to acquisitions and divestitures, if any; and • restructuring charges, if any.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the section titled “Selected Consolidated Financial and Other Data” and the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.
The plan involved the termination of approximately 683 employees, representing 13% of our employees. As a result of the restructuring plan, in the fourth quarter of 2022, we recorded $29.5 million in employee severance and other employee costs and $9.5 million in net stock-based compensation expense related to equity compensation for employees impacted by the plan of termination.
As a result of the restructuring plan, in the fourth quarter of 2022, we recorded $29.5 million in employee severance and other employee costs and $9.5 million in net stock-based compensation expense related to equity compensation for employees impacted by the plan of termination.
Therefore, in the event that the net amount of any reserve adjustments and any benefits from deferred gains related to claims ceded under the Reinsurance Agreement is recognized on the statement of operations, those amounts will be excluded from the calculation of Contribution and Adjusted EBITDA through the exclusion of the “Net amount from claims ceded under the Reinsurance Agreement”.
Therefore, in the event that the net amount of any reserve adjustments and any benefits from deferred gains related to claims ceded under the Reinsurance Agreement was recognized on the statement of operations, those amounts would be excluded from the calculation of Adjusted EBITDA and Adjusted Net Income (Loss) through the exclusion of the “Net amount from claims ceded under the Reinsurance Agreement”.
We believe the costs associated with these transactions related to certain legacy auto insurance liabilities do not illustrate the current period performance of our ongoing operations despite this transaction occurring in the current period because the impacted insurance liabilities relate to claims that date back years.
We believed the costs associated with these transactions related to certain legacy auto insurance liabilities did not illustrate the current period performance of our ongoing operations at the time despite this transaction occurring in the current period because the impacted insurance liabilities related to claims that date back years.
This adjustment will help investors understand the economic benefit of our Reinsurance Agreement on future trends in our operations, as they improve over the settlement period of any deferred gains.
This adjustment helped investors understand the economic benefit of our Reinsurance Agreement on future trends in our operations, as they improved over the settlement period of any deferred gains.
For more information regarding the limitations of Adjusted EBITDA and Adjusted EBITDA Margin and a reconciliation of net loss to Adjusted EBITDA, see the section titled “Reconciliation of Non-GAAP Financial Measures”.
For more information regarding the limitations of Adjusted EBITDA and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) and a reconciliation of net loss to Adjusted EBITDA, see the section titled “Reconciliation of Non-GAAP Financial Measures”.
As a result, in the first quarter of 2023, the Company expects to record lease termination penalties and additional impairment charges related to the cease use of certain facilities to real estate operating lease right-of-use assets. The remaining employee related charges, which include employee severance, benefits and stock-based compensation, will not be material in the first quarter of 2023.
As a result, we recorded lease termination penalties and additional impairment charges related to the cease use of certain facilities to real estate operating lease right-of-use assets. The remaining employee related charges, which include employee severance, benefits and stock-based compensation, were not material in the first quarter of 2023.
The impact of these factors on ultimate costs for insurance is difficult to estimate and could be material. However, while we believe that the insurance reserve amount is adequate, the ultimate liability may be in excess of, or less than, the amount provided.
The impact of these factors on ultimate costs for insurance is difficult to estimate and could be material. However, while we believe that the insurance reserve and insurance-related accrual amounts are adequate, the ultimate liabilities may be in excess of, or less than, the amounts provided.
As a result of these charges, we incurred net restructuring charges of $120.3 million in the fourth quarter of 2022. We also announced the intention to pursue a sale of certain assets related to our first-party vehicle service business on a blog post dated November 3, 2022 available on the Company’s website.
As a result of these charges, we incurred net restructuring charges of $120.3 million in the fourth quarter of 2022. We also announced the intention to pursue a sale of certain assets related to our first-party vehicle service business.
The total impact of the transaction to reinsure certain legacy auto insurance liabilities on our consolidated statement of operations was $20.4 million, with $20.2 million in cost of revenue and $0.2 million in general and administrative expense in the year ended December 31, 2021. (8) In the first quarter of 2020, we transferred certain legacy auto insurance liabilities.
The total impact of the transaction to reinsure certain legacy auto insurance liabilities under the Reinsurance Agreement on our consolidated statement of operations was $20.4 million, with $20.2 million in cost of revenue and $0.2 million in general and administrative expense in the year ended December 31, 2021.
If a ride has been requested by an organization using our Concierge offering for the benefit of a rider, we exclude this rider in the calculation of Active Riders unless the ride is accessible in the Lyft App. Revenue per Active Rider is calculated by dividing revenue for a period by Active Riders for the same period.
If a ride has been requested by an organization using our Concierge offering for the benefit of a rider, we exclude this rider in the calculation of Active Riders unless the ride is accessible in that rider’s Lyft App.
Liquidity and Capital Resources As of December 31, 2022, our principal sources of liquidity were cash and cash equivalents of approximately $281.1 million, short-term investments of approximately $1.5 billion, exclusive of restricted cash, cash equivalents and investments of $1.1 billion, and a revolving credit agreement which provides for a $420 million revolving secured credit facility.
Liquidity and Capital Resources As of December 31, 2023, our principal sources of liquidity were cash and cash equivalents of approximately $558.6 million, short-term investments of approximately $1.1 billion, exclusive of restricted cash, cash equivalents and investments of $1.0 billion, and a revolving credit agreement which provides for a $420 million revolving secured credit facility described below.
(3) Reflects the net amount recognized on the statement of operations associated with claims ceded under the Reinsurance Agreement, including any losses related to the deferral gains on the statement of operations and any benefit from the amortization of the deferred gain in the same period, to help investors understand the ultimate economic benefit of the Reinsurance Agreement.
(4) Reflects the net amount recognized on the statement of operations associated with claims ceded under the Reinsurance Agreement (described above), including any losses related to the deferral gains on the statement of operations and any benefit from the amortization of the deferred gain in the same period.
Cash used in financing activities was $72.5 million for the year ended December 31, 2021, which primarily consisted of repayment of loans of $44.4 million and principal payments on finance lease obligations for $35.5 million.
Financing Activities Cash used in financing activities was $122.1 million for the year ended December 31, 2023, which primarily consisted of repayment of loans of $72.5 million and principal payments on finance lease obligations for $43.5 million.
Cost of Revenue Year Ended December 31, 2022 to 2021 % change 2021 to 2020 % Change 2022 2021 2020 (in thousands, except for percentages) Cost of revenue $ 2,435,736 $ 1,702,317 $ 1,447,516 43 % 18 % Cost of revenue increased $733.4 million, or 43%, in 2022 as compared to the prior year.
Cost of Revenue Year Ended December 31, 2023 to 2022 % change 2022 to 2021 % Change 2023 2022 2021 (in thousands, except for percentages) Cost of revenue $ 2,543,954 $ 2,435,736 $ 1,702,317 4 % 43 % Cost of revenue increased $108.2 million, or 4%, in 2023 as compared to the prior year.
In the fourth quarter of 2022, we committed to a plan of termination to reduce operating expenses and adjust cash flows. We have also incurred restructuring charges related to the exit and sublease or cease use of certain facilities to align with our anticipated operating needs in fourth quarter of 2022 and the first quarter of 2023.
We have also incurred restructuring charges related to the exit and sublease or cease use of certain facilities to align with our anticipated operating needs in the fourth quarter of 2022 and the first quarter of 2023.
The following table provides a reconciliation of net loss to Adjusted EBITDA (in millions): Year Ended December 31, 2022 2021 2020 (in millions) Net loss $ (1,584.5) $ (1,062.1) $ (1,752.9) Adjusted to exclude the following: Interest expense (1) 20.8 52.8 34.2 Other (income) expense, net (2) 100.0 (135.9) (43.7) Provision for (benefit from) income taxes 5.9 11.2 (44.5) Depreciation and amortization 154.8 139.3 157.3 Stock-based compensation 750.8 724.6 565.8 Payroll tax expense related to stock-based compensation 17.0 31.5 23.7 Net amount from claims ceded under the Reinsurance Agreement (3)(4) 18.5 52.8 — Sublease income (5) 11.6 6.6 — Costs related to acquisitions and divestitures (6) 2.3 1.5 0.4 Transactions related to certain legacy auto insurance liabilities (7)(8) — 20.4 64.7 Restructuring charges (9)(10) 86.6 — 35.5 Adjusted EBITDA (11) $ (416.5) $ (157.5) $ (959.3) _______________ (1) Includes interest expense for Flexdrive vehicles and the 2025 Notes. $1.1 million related to the interest component of vehicle related finance leases in each of the years ended December 31, 2022 and 2021.
The following table provides a reconciliation of net loss to Adjusted EBITDA (in millions): Year Ended December 31, 2023 2022 2021 (in millions) Net loss $ (340.3) $ (1,584.5) $ (1,062.1) Adjusted to exclude the following: Interest expense (1) 29.7 20.8 52.8 Other (income) expense, net (2) (170.1) 100.0 (135.9) Provision for (benefit from) income taxes 8.6 5.9 11.2 Depreciation and amortization 116.5 154.8 139.3 Stock-based compensation 484.5 750.8 724.6 Payroll tax expense related to stock-based compensation 12.5 17.0 31.5 Net amount from claims ceded under the Reinsurance Agreement (3)(4) — 18.5 52.8 Sublease income 4.8 11.6 6.6 Costs related to acquisitions and divestitures (5) — 2.3 1.5 Transactions related to certain legacy auto insurance liabilities (6) — — 20.4 Restructuring charges (7)(8) 76.2 86.6 — Adjusted EBITDA (9) $ 222.4 $ (416.5) $ (157.5) Gross Bookings $ 13,775.2 $ 12,057.3 $ 9,745.7 Net loss as a percentage of Gross Bookings (2.5) % (13.1) % (10.9) % Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) 1.6 % (3.5) % (1.6) % _______________ (1) Includes interest expense for Flexdrive vehicles and the 2025 Notes. $3.4 million, $1.1 million and $1.1 million related to the interest component of vehicle related finance leases in the year ended December 31, 2023, 2022, and 2021.
Drivers enter into terms of service (“ToS”) with us in order to use our Lyft Driver App. We provide a service to drivers to complete a successful transportation service for riders. This service includes on-demand lead generation that assists drivers to find, receive and fulfill on-demand requests from riders seeking transportation services and related collection activities using our Lyft Platform.
We provide a service to drivers to complete a successful transportation service for riders. This service includes on-demand lead generation that assists drivers to find, receive and fulfill on-demand requests from riders seeking transportation services and related collection activities using our Lyft Platform.
We believe the adjustment to exclude the costs related to restructuring from Contribution and Adjusted EBITDA is useful to investors by enabling them to better assess our operating performance in the context of current period results and provide for better comparability with our historically disclosed Contribution and Adjusted EBITDA amounts.
We believe the adjustment to exclude the costs related to restructuring from Adjusted EBITDA and Adjusted Net Income (Loss) is useful to investors by enabling them to better assess our ongoing operating performance and provide for better comparability with our historically disclosed Adjusted EBITDA and Adjusted Net Income (Loss) amounts.
(9) In the fourth quarter of 2022, we incurred restructuring charges of $29.2 million of severance and other employee costs and $57.4 million related to lease termination and other restructuring costs.
(8) In the year ended December 31, 2022, we incurred restructuring charges of $29.2 million of severance and other employee costs and $57.4 million related to lease termination and other restructuring costs.
Research and Development Year Ended December 31, 2022 to 2021 % change 2021 to 2020 % Change 2022 2021 2020 (in thousands, except for percentages) Research and development $ 856,777 $ 911,946 $ 909,126 (6) % — % Research and development expenses decreased $55.2 million, or 6%, in 2022 as compared to the prior year.
Research and Development Year Ended December 31, 2023 to 2022 % change 2022 to 2021 % Change 2023 2022 2021 (in thousands, except for percentages) Research and development $ 555,916 $ 856,777 $ 911,946 (35) % (6) % Research and development expenses decreased $300.9 million, or 35%, in 2023 as compared to the prior year.
The increase was due primarily to a $669.5 million increase in insurance costs driven by an increase in rider demand and recent economic factors including the high inflationary environment, increased litigation, and higher than expected losses across the commercial auto industry.
There was also a $16.6 million increase in insurance costs driven by recent economic factors including the high inflationary environment, increased litigation and higher than expected paid losses across the commercial auto industry as well as an increase in rider demand.
(4) Includes a $36.8 million gain recognized in cost of revenue in the second quarter of 2022 on the consolidated statement of operations related to the Commutation Transaction, which effectively commuted and settled the Reinsurance Agreement. Refer to Note 6 "Supplemental Financial Statement Information" to the consolidated financial statements for information regarding the Commutation Transaction.
During the second quarter of 2022, we completed the Commutation Transaction, which effectively commuted and settled the Reinsurance Agreement. The Commutation Transaction resulted in a $36.8 million gain recorded to cost of revenue on the consolidated statement of operations. Refer to Note 6 “Supplemental Financial Statement Information” to the consolidated financial statements for information regarding these transactions.
The gain associated with this Commutation Agreement, which commutes and settles the Reinsurance Agreement, will be excluded from the calculation of Contribution and Adjusted EBITDA through the exclusion of the “Net amount from claims ceded under the Reinsurance Agreement.” We announced a restructuring plan in the fourth quarter of 2022 to reduce operating expenses and adjust cash flows.
The gain associated with this Commutation Agreement. which commutes and settles the Reinsurance Agreement was excluded from the calculation of Adjusted EBITDA and Adjusted Net Income (Loss) through the exclusion of the “Net amount from claims ceded under the Reinsurance Agreement.” We announced restructuring plans in the fourth quarter of 2022 and the second quarter of 2023 to reduce operating expenses.
Revenue generated from Flexdrive and Lyft Rentals is recognized evenly over the rental period, which is typically seven days or less. Due to the short-term nature of the Flexdrive, Lyft Rentals, and Light Vehicle transactions, we classify these rentals as operating leases.
Revenue generated from single-use ride fees paid by Light Vehicles riders are recognized upon completion of each related ride. Revenue generated from Flexdrive is recognized evenly over the rental period, which is typically seven days or less. Due to the short-term nature of the Flexdrive and Light Vehicle transactions, we classify these rentals as operating leases.
Although there has been an improvement in overall demand and our marketplace health, demand for our platform has not returned to pre-pandemic levels in all markets and the timing of demand and supply improvements has not always aligned.
We have experienced volatility in the health of our overall marketplace, including fluctuations in driver supply and service levels. Although there has been an improvement in our overall marketplace health, demand for our platform has not returned to pre-pandemic levels in all markets and the timing of demand increases have not always aligned with supply availability.
Operations and Support Year Ended December 31, 2022 to 2021 % change 2021 to 2020 % Change 2022 2021 2020 (in thousands, except for percentages) Operations and support $ 443,846 $ 402,233 $ 453,963 10 % (11) % Operations and support expenses increased $41.6 million, or 10%, in 2022 as compared to the prior year.
Operations and Support Year Ended December 31, 2023 to 2022 % change 2022 to 2021 % Change 2023 2022 2021 (in thousands, except for percentages) Operations and support $ 427,239 $ 443,846 $ 402,233 (4) % 10 % Operations and support expenses decreased $16.6 million, or 4%, in 2023 as compared to the prior year.
(2) Includes a $135.7 million impairment charge related to a non-marketable equity investment and other assets in the third quarter of 2022, a $119.3 million pre-tax gain from the transaction with Woven Planet in the third quarter of 2021 and interest income which was reported as a separate line item on the consolidated statement of operations in periods prior to the second quarter of 2020.
(2) Includes a $135.7 million impairment charge related to a non-marketable equity investment and other assets in the third quarter of 2022 and a $119.3 million pre-tax gain from the transaction with Woven Planet in the third quarter of 2021 and interest income.
Insurance claims may take years to completely settle, and we have limited historical loss experience. Because of the limited operational history, we make certain assumptions based on currently available information and industry statistics, with the loss development factors as one of the most significant assumptions, and utilize actuarial models and techniques to estimate the reserves.
Because of the limited operational history, we make certain assumptions based on currently available information and industry statistics, with the loss development factors as the most significant assumptions related to the insurance reserves and the frequency and severity assumptions as the most significant assumptions related to insurance-related accruals, and utilize actuarial models and techniques to estimate the reserves.
We collect the fare and related charges from riders on behalf of drivers at the time the ride is delivered using the rider’s authorized payment method, and we retain any fees owed to us before making the remaining disbursement to drivers. Accordingly, we maintain no accounts receivable from drivers.
As of December 31, 2023, no amounts had been drawn under the credit facility. We collect the fare and related charges from riders on behalf of drivers at the time the ride is delivered using the rider’s authorized payment method, and we retain any fees owed to us before making the remaining disbursement to drivers.
General and Administrative Year Ended December 31, 2022 to 2021 % change 2021 to 2020 % Change 2022 2021 2020 (in thousands, except for percentages) General and administrative $ 1,286,180 $ 915,638 $ 946,127 40 % (3) % General and administrative expenses increased $370.5 million, or 40%, in 2022 as compared to the prior year.
General and Administrative Year Ended December 31, 2023 to 2022 % change 2022 to 2021 % Change 2023 2022 2021 (in thousands, except for percentages) General and administrative $ 871,080 $ 1,286,180 $ 915,638 (32) % 40 % General and administrative expenses decreased $415.1 million, or 32%, in 2023 as compared to the prior year.
Our contracts with insurance providers require reinsurance premiums to be deposited into trust accounts with a third-party financial institution from which the insurance providers are reimbursed for claims payments. Our restricted reinsurance trust investments were $1.0 billion as of December 31, 2022 and 2021. We continue to actively monitor the impact of the COVID-19 pandemic.
Accordingly, we maintain no accounts receivable from drivers. Our contracts with insurance providers require reinsurance premiums to be deposited into trust accounts with a third-party financial institution from which the insurance providers are reimbursed for claims payments. Our restricted reinsurance trust investments were $837.3 million and $1.0 billion as of December 31, 2023 and 2022, respectively.
During the second quarter of 2021, we entered into a Quota Share Reinsurance Agreement for the reinsurance of legacy auto insurance liabilities between October 1, 2018 to October 1, 2020, based on the reserves in place as of March 31, 2021.
Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) is calculated by dividing Adjusted EBITDA for a period by Gross Bookings for the same period. 65 During the second quarter of 2021, we entered into a Quota Share Reinsurance Agreement (the “Reinsurance Agreement”) for the reinsurance of legacy auto insurance liabilities between October 1, 2018 to October 1, 2020, based on the reserves in place as of March 31, 2021.
We define Contribution as gross profit, or revenue less cost of revenue, adjusted to exclude the following items from cost of revenue: • amortization of intangible assets; • stock-based compensation expense; • payroll tax expense related to stock-based compensation; • net amount from claims ceded under the Reinsurance Agreement; • transaction costs related to certain legacy auto insurance liabilities, if any; and • restructuring charges, if any.
We define Adjusted Net Income (Loss) as net loss adjusted for: • amortization of intangible assets; • stock-based compensation; 66 • payroll tax expense related to stock-based compensation; • net amount from claims ceded under the Reinsurance Agreement; • transaction costs related to certain legacy auto insurance liabilities, if any; • costs related to acquisitions and divestitures, if any; • impairment charges, if any; and • restructuring charges, if any.
With $1.8 billion in unrestricted cash and cash equivalents and short-term investments as of December 31, 2022, as well as our credit facility, we believe we have sufficient liquidity to meet our working capital and capital expenditures needs for at least the next 12 months and beyond.
While we cannot be certain that our actions will mitigate the impact of the uncertain macroeconomic environment, with $1.7 billion in unrestricted cash and cash equivalents and short-term investments as of December 31, 2023, as well as our credit facility, we believe we have sufficient liquidity to meet our working capital and capital expenditures needs for at least the next 12 months.
Sales and Marketing Year Ended December 31, 2022 to 2021 % change 2021 to 2020 % Change 2022 2021 2020 (in thousands, except for percentages) Sales and marketing $ 531,512 $ 411,406 $ 416,331 29 % (1) % Sales and marketing expenses increased $120.1 million, or 29%, in 2022 as compared to the prior year.
Sales and Marketing Year Ended December 31, 2023 to 2022 % change 2022 to 2021 % Change 2023 2022 2021 (in thousands, except for percentages) Sales and marketing $ 481,004 $ 531,512 $ 411,406 (10) % 29 % Sales and marketing expenses decreased $50.5 million, or 10%, in 2023 as compared to the prior year.
Other Income (Expense), Net Year Ended December 31, 2022 to 2021 % change 2021 to 2020 % Change 2022 2021 2020 (in thousands, except for percentages) Other income (expense), net $ (99,988) $ 135,933 $ 43,669 (174) % 211 % Other income, net decreased $235.9 million, or 174%, in 2022 as compared to the prior year.
Other Income (Expense), Net Year Ended December 31, 2023 to 2022 % change 2022 to 2021 % Change 2023 2022 2021 (in thousands, except for percentages) Other income (expense), net $ 170,123 $ (99,988) $ 135,933 270 % (174) % Other income (expense), net increased $270.1 million, or 270%, in 2023 as compared to the prior year.
This consisted primarily of a net loss of $1.6 billion. This was offset by non-cash stock-based compensation expense of $750.8 million, depreciation and amortization expense of $154.8 million and impairment charges of $135.7 million. Cash used in operating activities was $101.7 million for the year ended December 31, 2021.
This consisted primarily of a net loss of $340.3 million. This was offset by non-cash stock-based compensation expense of $484.5 million and depreciation and amortization expense of $116.5 million. Cash used in operating activities was $237.3 million for the year ended December 31, 2022. This consisted primarily of a net loss of $1.6 billion.
Liabilities are determined on a quarterly basis by internal actuaries through an analysis of historical trends, changes in claims experience including consideration of new information and application of loss development factors among other inputs and assumptions. On an annual basis, an independent third-party actuary will evaluate the liabilities for appropriateness with claims reserve valuations.
Liabilities are determined on a quarterly basis by internal actuaries through an analysis of historical trends, changes in claims experience including consideration of new information and application of loss development factors for the insurance reserves and frequency and severity assumptions for the insurance-related accruals, among other inputs and assumptions.
Revenue Recognition Revenue consists of revenue recognized from fees paid by drivers for use of our Lyft Platform offerings, Concierge platform fees from organizations that use our Concierge offering, subscription fees paid by riders to access transportation options through the Lyft Platform, revenue from our vehicle service centers, revenue from the bikes and bike station hardware and software sales and revenue from licensing and data access agreements.
Components of Results of Operations Revenue Revenue consists of revenue recognized from fees paid by drivers for use of our Lyft Platform offerings, Concierge platform fees from organizations that use our Concierge offering, subscription fees paid by riders to access transportation options through the Lyft Platform, revenue from bikes and bike station hardware and software sales, revenue from licensing and data access agreements and revenue from arrangements to provide advertising services to third parties that are interested in reaching users of our platform.
We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized. 60 Results of Operations The following table summarizes our historical consolidated statements of operations data: Year Ended December 31, 2022 2021 2020 (in thousands) Revenue $ 4,095,135 $ 3,208,323 $ 2,364,681 Costs and expenses Cost of revenue 2,435,736 1,702,317 1,447,516 Operations and support 443,846 402,233 453,963 Research and development 856,777 911,946 909,126 Sales and marketing 531,512 411,406 416,331 General and administrative 1,286,180 915,638 946,127 Total costs and expenses 5,554,051 4,343,540 4,173,063 Loss from operations (1,458,916) (1,135,217) (1,808,382) Interest expense (19,735) (51,635) (32,678) Other income (expense), net (99,988) 135,933 43,669 Loss before income taxes (1,578,639) (1,050,919) (1,797,391) Provision for (benefit from) income taxes 5,872 11,225 (44,534) Net loss $ (1,584,511) $ (1,062,144) $ (1,752,857) The following table sets forth the components of our consolidated statements of operations data as a percentage of revenue: Year Ended December 31, 2022 2021 2020 Revenue 100.0 % 100.0 % 100.0 % Costs and expenses Cost of revenue 59.5 53.1 61.2 Operations and support 10.8 12.5 19.2 Research and development 20.9 28.4 38.4 Sales and marketing 13.0 12.8 17.6 General and administrative 31.4 28.5 40.0 Total costs and expenses 135.6 135.4 176.5 Loss from operations (35.6) (35.4) (76.5) Interest expense (0.5) (1.6) (1.4) Other income (expense), net (2.4) 4.2 1.8 Loss before income taxes (38.5) (32.8) (76.0) Provision for (benefit from) income taxes 0.1 0.3 (1.9) Net loss (38.7) % (33.1) % (74.1) % Comparison of Years Ended December 31, 2022 and 2021 Revenue Year Ended December 31, 2022 to 2021 % change 2021 to 2020 % Change 2022 2021 2020 (in thousands, except for percentages) Revenue $ 4,095,135 $ 3,208,323 $ 2,364,681 28 % 36 % Revenue increased $886.8 million, or 28%, in 2022 as compared to the prior year, driven primarily by the increase in the number of Active Riders throughout 2022 as demand continued to recover from the impacts of COVID-19.
We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized. 61 Results of Operations The following table summarizes our historical consolidated statements of operations data: Year Ended December 31, 2023 2022 2021 (in thousands) Revenue $ 4,403,589 $ 4,095,135 $ 3,208,323 Costs and expenses Cost of revenue 2,543,954 2,435,736 1,702,317 Operations and support 427,239 443,846 402,233 Research and development 555,916 856,777 911,946 Sales and marketing 481,004 531,512 411,406 General and administrative 871,080 1,286,180 915,638 Total costs and expenses 4,879,193 5,554,051 4,343,540 Loss from operations (475,604) (1,458,916) (1,135,217) Interest expense (26,223) (19,735) (51,635) Other income (expense), net 170,123 (99,988) 135,933 Loss before income taxes (331,704) (1,578,639) (1,050,919) Provision for (benefit from) income taxes 8,616 5,872 11,225 Net loss $ (340,320) $ (1,584,511) $ (1,062,144) The following table sets forth the components of our consolidated statements of operations data as a percentage of revenue: Year Ended December 31, 2023 2022 2021 Revenue 100.0 % 100.0 % 100.0 % Costs and expenses Cost of revenue 57.8 59.5 53.1 Operations and support 9.7 10.8 12.5 Research and development 12.6 20.9 28.4 Sales and marketing 10.9 13.0 12.8 General and administrative 19.8 31.4 28.5 Total costs and expenses 110.8 135.6 135.4 Loss from operations (10.8) (35.6) (35.4) Interest expense (0.6) (0.5) (1.6) Other income (expense), net 3.9 (2.4) 4.2 Loss before income taxes (7.5) (38.5) (32.8) Provision for (benefit from) income taxes 0.2 0.1 0.3 Net loss (7.7) % (38.7) % (33.1) % Comparison of Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, 2023 to 2022 % change 2022 to 2021 % Change 2023 2022 2021 (in thousands, except for percentages) Revenue $ 4,403,589 $ 4,095,135 $ 3,208,323 8 % 28 % Revenue increased $308.5 million, or 8%, in 2023 as compared to the prior year, due primarily to growth in demand along with our improved marketplace health and competitive pricing adjustments initiated in early 2023.
Recent Accounting Pronouncements See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently issued accounting pronouncements not yet adopted as of the date of this report. Components of Results of Operations As noted above, we expect the ongoing impacts of the COVID-19 pandemic to continue to suppress demand for our platform.
Recent Accounting Pronouncements See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently issued accounting pronouncements not yet adopted as of the date of this report.
The decrease was primarily due to a $135.7 million impairment charge related to a non-marketable equity investment in a privately held company and other assets in the third quarter of 2022 and a pre-tax gain of $119.3 million as a result of the transaction with Woven Planet in the third quarter of 2021.
The increase was primarily due to a $135.7 million impairment charge related to a non-marketable equity investment in a privately held company and other assets in the third quarter of 2022.
Cash provided by investing activities was $267.0 million for the year ended December 31, 2021, which primarily consisted of proceeds from sales and maturities of marketable securities of $3.8 billion and maturities of term deposits of $675.5 million, partially offset by purchases of marketable securities of $3.8 billion and term deposits of $0.5 billion.
Investing Activities Cash provided by investing activities was $599.8 million for the year ended December 31, 2023, which primarily consisted of proceeds from sales and maturities of marketable securities of $3.9 billion and the sale of property and equipment of $92.6 million, partially offset by purchases of marketable securities of $3.3 billion and purchases of property and equipment of $149.8 million.
As of December 31, 2022, the total unrecognized compensation cost related to RSUs was $499.5 million, which we expect to recognize over the remaining weighted-average period of approximately 1.0 year.
As of December 31, 2023, the total unrecognized compensation cost related to all unvested awards was $203.1 million, which we expect to recognize over the remaining weighted-average period of approximately 1.2 years.
For example, we intend to invest further in EVs in order to achieve compliance with the California Clean Miles Standard and Incentive Program, which sets the target that 90% of rideshare miles in California must be in EVs by the end of 2030, and New York City’s recently announced goals to get to 100% of rideshare miles in EV by 2030.
For example, we intend to invest further in EVs in order to achieve compliance with the California Clean Miles Standard which sets the target that 90% of rideshare miles in California must be in EVs by the end of 2030; the Massachusetts’ Climate Bill; New York City's goal to get to 100% of rideshare rides in EVs or wheelchair accessible vehicles by 2030, and the City of Toronto’s push to bring the industry to 100% electric by 2030.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical 100 basis points change in interest rates would not have a material impact on our financial condition or results of operations due to the short-term nature of our investment portfolio. As of December 31, 2022, we had long-term debt of $839.5 million, 88% of which consisted of the fixed-rate Convertible Senior Notes we issued in May 2020.
Biggest changeA hypothetical 100 basis points change in interest rates would not have a material impact on our financial condition or results of operations due to the short-term nature of our investment portfolio. As of December 31, 2023, we had long-term debt of $865.2 million, 86% of which consisted of the 2025 Notes we issued in May 2020.
As of December 31, 2022, we had unrestricted cash, cash equivalents and short-term investments of approximately $1.8 billion, which consisted primarily of institutional money market funds, certificates of deposits, commercial paper, corporate bonds, and term deposits, which each carry a degree of interest rate risk, and restricted cash, cash equivalents and restricted investments of $1.1 billion.
As of December 31, 2023, we had unrestricted cash, cash equivalents and short-term investments of approximately $1.7 billion, which consisted primarily of institutional money market funds, certificates of deposits, commercial paper, corporate bonds, and term deposits, which each carry a degree of interest rate risk, and restricted cash, cash equivalents and restricted investments of $1.0 billion.

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