Lyft, Inc.

Good afternoon, and welcome to the List Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode to prevent any background noise. Later, we will conduct a question-and-answer session, and instructions will be given at that time. If anyone should require operator assistance, please press star to zero on your touchtone telephone. As a reminder, this conference call has been recorded. I would now like to turn the conference over to Sean Woodhull, Head of Investor Relations. You may begin.

Thank you. Good afternoon and welcome to the Lyft earnings call for the quarter ended December 31st, 2020. Joining me today to discuss Lyft's results and key business initiatives are our co-founder and CEO, Logan Green, co-founder and president, John Zimmer, and the chief financial officer, Brian Roberts. A recording of this conference call will be available on our investor relations website at investor.lyft.com shortly after this call has ended. I'd like to take this opportunity to remind you that during the call, we will be making forward-looking statements, including statements relating to the expected impact of the continuing COVID-19 pandemic, the expected performance of our business, future financial results and guidance, strategy, long-term growth, and overall future prospects, as well as statements regarding regulatory matters. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or implied during this call. In particular, those described in our risk factors included in our Form 10-Q for the third quarter of 2020 filed on November 12, 2020, and in our Form 10-K for the full year 2020 that will be filed by March 1, 2021, as well as the current uncertainty and unpredictability in our business, the markets, and economy. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of the date hereof, and LIFT disclaims any obligation to update any forward-looking statements except as required by law. Our discussion today will include non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Information regarding our non-GAAP financial results, including a reconciliation of our historical GAAP to non-GAAP results, may be found in our earnings release, which was furnished with our form 8K, filed today with the SEC, and may also be found on our investor relations website at investor.lyft.com. I would now like to turn the conference call over to Lyft's co-founder and chief executive officer, Logan Green. Logan?

Thanks, Sean. Good afternoon, everyone, and thank you for joining our call today. Despite the difficult backdrop in 2020, we focused on improving our business for the long term. The progress we've made has been significant, and I believe we are now in a stronger position than at any time in our past. Given the improvements we've made to our unit economics and our overall cost structure, we're like a tightly coiled spring, positioned to drive strong organic growth and margin expansion as the recovery takes hold. Turning to our Q4 results, ridesharing continued to rebound, but the monthly trends were uneven. Rideshare rides were down 47% year-over-year in October and 50% in November. In December, rideshare rides were down 52% year-over-year as COVID-19 cases surged and state and local governments implemented restrictions limiting people's mobility. Given the effect on demand, we were able to reduce driver acquisition and incentive spend, which had a positive impact on our financial results. So despite the pandemic headwinds, revenue for our fourth quarter grew 14% sequentially and was towards the top end of our outlook range. Recall that in early December, we said that Q4 revenue may come in at the lower end of the range. Now, as we've discussed on prior calls, recovery trends vary locally across North America, reflecting differences in COVID-19 case counts and responses. The West Coast generally remains the weakest region, while we've seen further rebounding in Florida and Texas as examples. Separately in Q4, there was a mixed shift towards higher frequency riders, which led to record revenue per active rider. In fact, revenue per active rider grew 14% quarter-over-quarter and showed positive growth year-on-year despite the pandemic overhang. Let me now shift to January. While rideshare rides were down 51% year-over-year, the trend still reflects positive week-on-week growth throughout the month, excluding the MLK holiday week. The operating environment does remain uncertain, but we currently anticipate an improvement in average daily ride growth in the months of February and March. Brian will share more details, but based on current COVID-19 recovery expectations, in Q1, we plan to invest in driver supply to improve service levels and prepare for stronger demand beginning in Q2. On the other side of the pandemic, when people are able to resume a fuller range of activities and safely come together, we anticipate a strong rebound in demand across our fully integrated transportation network. As individuals return to activities like leisure travel and entertainment in the second half of the year, we are taking steps today to ensure that we're ready to support this anticipated demand when the time comes. While we can't predict the timing or efficacy of vaccine rollouts with certainty, based on current trends, we believe the U.S. could reach critical immunity levels earlier than many international destinations. As a result, the pop in leisure travel that I mentioned may primarily occur within the U.S., which we are well positioned to capture. I think people are eager to get back to normal. There's pent-up demand to see friends go out to restaurants and bars, and attend sporting events and concerts. And by taking Lyft, these venues can all be accessed responsibly without drinking and driving. I want to take a few minutes to discuss our long-term vision. We believe the future of transportation is as a service, and we are the only company in North America that has a seamless, multimodal transportation platform that can replace car ownership. We expect autonomous vehicles to accelerate this transition. They will transform the rideshare industry and their business. Here's how we're thinking about this. We believe the first generation of AVs will be deployed on rideshare networks. Given the expected vehicle cost, one key issue will be getting first wave vehicles to break even, which will depend on utilization. This will be tricky because these vehicles will only be able to serve a subset of trips due to likely domain and weather restrictions. It'll take time for AV technology to advance to the point where AVs are able to accommodate every ride under every condition. There can be regulatory speed bumps, too. Our ride share network will help maximize AV utilization because we can dynamically dispatch AVs when the trip type and route are suitable. This is critical. Because of the nature of our multimodal platform and because we aggregate demand, we're able to match riders with a ride, whether or not it's fulfilled by an AV. This type of hybrid deployment model is well established in other industries. As wireless carriers have introduced 5G, they've rolled it out on top of existing networks for redundancy. That way, if the new 5G tower is too far away, subscribers can still be supported by 4G or 3G service. This model works because it allows the carriers to capture value as they scale. Early AVs that deploy on our rideshare network will be able to benefit from a similar dynamic. Keep in mind that daily travel patterns typically don't resemble a static horizontal line. They're closer to a heartbeat, with large spikes around morning and evening commutes and a mix of peaks and valleys during other parts of the day. Providing consistent service levels requires having infrastructure that can scale on demand. Extending the carrier analogy, imagine what would happen to the carrier's subscriber base if people were unable to access the network, not just 5G, but any network at critical points during the day. It would be a major problem. For AVs deployed on hybrid rideshare networks, the advantage is that as demand spikes, the network can supplement a fixed pool of AVs with traditional vehicles to seamlessly serve rider demand. Also, for the same reason that nationwide roaming was critical to increase mobile penetration, this broad national footprint ensures consistent service virtually everywhere we operate. We'll also be able to introduce AVs to millions of potential riders, expanding the reach of AVs to a wide audience. We've spent nine years building a business that is uniquely capable of supporting and scaling AVs. Our level five data-driven autonomy program taps into our greatest asset, our rideshare network, to help tackle some of the hardest problems in self-driving. And our open platform partners will be able to leverage our rideshare technology stack, including our dispatching and routing algorithms, our shared rides platform, and our pricing capabilities. Since we aggregate demand, These partners will have access to a scaled network of riders and drivers. Our fleet management expertise will drive additional operating efficiencies, as John will discuss. We are already leading the way in our industry. We've facilitated more than 100,000 paid AV rides on our platform since 2018 with Motional. In Q4, we announced our plans to deploy fully autonomous Motional vehicles on our network in multiple cities in 2023. This is a landmark deal and the first agreement of its kind in our industry. Through the investments we've made in our network, we've continued to build on our core competencies to be the partner of choice among autonomous programs. We're excited about the transformative impact AVs will ultimately have on our industry and on transportation broadly. Finally, we remain confident in our ability to address the significant market opportunity in front of us. And our focus on revenue growth and cost discipline continues to strengthen our financial position. Before John provides a few updates on the business, I'll turn the call over to Brian to review our financial performance and provide details on our path to profitability.