Lyft, Inc. (NASDAQ:LYFT) Q3 2025 Earnings Call Transcript

Lyft, Inc. (NASDAQ:LYFT) Q3 2025 Earnings Call Transcript November 5, 2025

Lyft, Inc. beats earnings expectations. Reported EPS is $0.3053, expectations were $0.3.

Aurelien Nolf: Good afternoon, and welcome to Lyft Third Quarter 2025 Earnings Call. As a reminder, this conference call is being recorded. I’m Aurelien Nolf, VP, FP&A and Investor Relations. On the call today, we have our CEO, David Risher; and our CFO, Erin Brewer. As a reminder, our full prepared remarks are available on the IR website, and we will use this time to answer your questions. We will make forward-looking statements on today’s call relating to our business strategy and performance, partnerships, future financial and operating results, trends in our marketplace and guidance. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call.

These factors and risks are described in our earnings materials and in our recent SEC filings. All of the forward-looking statements that we make on today’s call are based on our beliefs as of today, and we disclaim any obligation to update any forward-looking statements, except as required by law. Additionally, today, we are going to discuss customers. For rideshare, there are 2 customers in every car. The driver is Lyft customer and the rider is the driver customer. We care about both. Our discussion today will also include non-GAAP financial measures, which are not a substitute for GAAP results. Reconciliations of our historical GAAP to non-GAAP results can be found in our earnings materials, which are available on our IR website. And with that, I will pass the call on to David.

John Risher: Thank you, Aurelien. Wow, Q3 was another record quarter across driver hours, Active Riders and gross bookings. Adjusted EBITDA grew 29% year-over-year, and our free cash flow generation for the trailing 12 months was over $1 billion for the first time in Lyft’s history. As you saw this morning, our partnership with United Airlines is now live. You can now all link your accounts to earn miles on all eligible rides you take anywhere, not just to the airport. And even better, rides taken through your company business profile earn even more. Now that’s big stuff. Don’t worry. I’m going to give all of you about 20 seconds right now to link your account. I’m not kidding. I want you to be opening up your Lyft app. Go to that profile on the lower right-hand side, click that profile button, look for rewards, get managed rewards, add United MileagePlus .

Every single one of you. That’s going to be your ticket to ask a question today. So that give you a couple of seconds to get that done. Okay. Additionally, we focused on continuing to create AV partnerships that are differentiated and purposeful with each bringing unique learnings and dynamics to Lyft. We further build upon our AV framework this quarter with the announcements of Waymo as well as Tensor powered by NVIDIA, and we’re demonstrating how we’re positioning ourselves across the entire AV value chain. Looking ahead to 2026, we are well positioned with multiple growth catalysts converging to accelerate our momentum. I am very excited for this comeback story. And with that, let’s get to your questions.

Aurelien Nolf: Great. Thank you, David. We will now open the call to questions. [Operator Instructions] So I think our first question is coming from Doug Anmuth from JPMorgan.

Q&A Session

Douglas Anmuth: David, maybe I’ll just ask first about your very last comment there, just about the multiple converging catalysts in 2026 and what makes you so excited there. And then if you could also just comment on insurance. You had talked about the savings from SB 371. And just curious if that is still the plan to kind of benefit from all of those savings or if there’s some component that gets reinvested into the business?

John Risher: Sure. Doug, two great questions. I’m going to speak very briefly here, and then Erin is going to take both of those. But I’ll say very briefly on the catalyst side. I’ve been in this job 2.5 years now. And oh man, that we have more opportunity ahead of us than we’ve had since the first day. And again, we’ll talk about each of the different pieces there in just a couple of seconds, but I can give you some very live data since I was just in our weekly business review. We were just looking at what happened last week. Last week was Halloween, of course, and Halloween was not only our biggest day, it was actually our biggest hour by hour. We’ve never had as many rides, never been able to fulfill as many rides as we have.

It’s our biggest day. It was our biggest week and not by a little bit. Just extraordinary momentum going on here that’s allowing us to continue to grow. And I should say, just to sort of say the very obvious there, that’s just in the United States. That’s not even the FREENOW and Europe opportunity and the TBR opportunity. So we’re coming into the quarter operationally so strong, so customer test and with so many opportunities next year, it’s really a pretty extraordinary time. So I’ll turn it over to Erin to talk both about the catalyst and then the insurance question or the [indiscernible], the California question.

Erin Brewer: Yes. Great. Thanks, Doug. I might go on a little longer than David because I’m kind of excited about this subject. But you see our Q3 results, Active Riders growth at 18% year-over-year, all-time high. Gross bookings up 16% year-over-year, another all-time high. Adjusted EBITDA, as David mentioned, up 29%, another all-time high. So that’s our consolidated business, but take any of those metrics just for North America, same, all-time highs. So we’ve got a lot of momentum. Our guide for the fourth quarter is for rides to be up mid- to high teens, gross bookings up 17% to 20%. So we see accelerating growth into the fourth quarter. And as we sort of sat and reflected on where we’ll end up for 2025, it was important for us to talk about how we see 2026.

So it really starts with our marketplace is stronger than ever, right? We’ve got record levels of Active Riders. We’ve got record driver hours, as David mentioned, record rides. And so multiple catalysts coming together to keep driving this momentum forward. And I’ll just mention a few. First, David led off with the United partnership. Doug, you were first, so maybe you connected your accounts first. That’s great. Congratulations. But we’re excited about that. We think that’s going to be a great program. Obviously, great value for Lyft, great value with our partner, United, we will see full year contributions from FREENOW, and we expect that business to grow year-over-year. We’re also going to see a full year of impact from TBR Global Chauffeuring, the acquisition that we announced recently.

That’s only going to show up for a pretty small portion of Q4 in 2025. Underpenetrated markets remain a fantastic area for us. We had previously talked about those markets in the U.S. representing about 2/3 of that 161 billion personal vehicle trips annually that we see as our market opportunity. And in Q3 alone, about 70% of our rides growth came out of those areas in North America, and we see strong continued catalyst for growth there. I’ll get to California insurance reform in a moment, but that’s another area that we think has great upside in terms of continuing — driving new demand on the platform as a result of that. And we’ve just got strength across our core platform. As you know, we’ve been driving many programs over a long period of time now to drive driver preference.

We’ve got a great driver rewards program. That’s going to underpin our platform health. We’ve got a fantastic business rewards program that we’re continuing to promote and get out there. The acquisition of TBR is a natural catalyst. A lot of those people are business travelers. So yes, there’s a lot to be excited about as we think about how we’re ending 2025 and then what the setup is for 2026. So thank you for indulging me. Hopefully, you could hear the excitement in my voice. As it relates to California, just to kind of bring everyone on the same page, some people talk about this is the California insurance reform. It’s also formerly known as SB 371. The headline here is the passage of this bill, which is going to go into effect in 2026 is a true win-win-win.

Riders win, drivers win. And the great thing is when both of those constituents win, so does Lyft. So what does it mean? Rideshare is going to become more accessible to riders with a reduction in insurance. It does away with outdated $1 million required coverage for uninsured — underinsured motorist requirements. It’s been in place for a while. And it’s 16x higher than the typical auto coverage, where a vast majority of claims are settled for under $100,000. And over time, this has increased the cost of Lyft rides. In 2025 in California, riders have been paying an average of over $6 per ride just in insurance costs alone. And then in certain areas like L.A., it’s even higher. It’s almost double than that. It’s just nuts. So this bill modernizes those regulations.

We see passing along the vast majority of those savings to riders in the form of price reduction. That’s going to stimulate demand. That’s going to be great for drivers, more earnings opportunities and then great growth opportunities for Lyft overall.

Aurelien Nolf: Our next question comes from Eric Sheridan with Goldman Sachs.

Eric Sheridan: David, I think there’s a debate going on among investors right now in the sector on how to think about the engines of growth when measured against incremental margins in the sector beyond just the end of this year, but out over the next couple of years. Can you just hit refresh on your philosophical view on how to think about the balance between incenting growth, driving innovation, but also delivering on continued margin trajectory over the next couple of years?

John Risher: Yes, sure. Good to hear from you. I mean, I think, gosh. When you hear that perspective, I think it almost immediately should make you think the people asked that question are sort of thinking a little bit small. They’re thinking kind of 0 sum. Because, again, just to sort of state the obvious, but as you say, kind of reground, we’re now doing 2.5 million rides a day. That’s a big number. And by the way, when I started this job at an Investor Day, you’ll have heard us say 2 million rides a day. Now it’s 2.5 million rides a day. But we are more profitable now than when I started by a lot. And we’re delivering better service. Here’s a fun fact. Remember those Halloween stats I was just sort of putting out, we actually pick people up faster this year than we did last year, even though we were doing more rides by a lot.

So what that tells you is there is an enormous amount of service upside that we’ve unlocked over the last couple of years that did not come at the expense of our economics. In fact, it was exactly the opposite. It’s exactly the opposite. Now why might that be? Well, that might be because those 2.5 million rides, which then translates to 900 million rides a year, let’s call it, plus the other guys, 1.5 billion rides a year, let’s call it, so 2-point-some billion rides per year is a tiny fraction of the 161 billion rides just in North America. And then remember, with our FREENOW acquisition, TBR acquisition, we now have a TAM that’s twice as big. So I sort of — I mean, like I get this kind of conceptual trade-off, but I think that conceptual trade-off is sort of a scarcity mindset sort of 0 binary, kind of like we win, the other guys lose or whatever, whatever.

I think there’s so much innovation left. I’ll give you a little tiny story there. We launched Lyft Silver, whenever that was, maybe 6 months ago. And now we’ve increased ridership just in Silver. So this is for older Americans. It’s only available in the United States right now. For older Americans, those rides have increased 50% just in the last 6 months to well over 1 million rides in total. And that’s just the beginning of that program. And that’s not like a low-cost program or sort of a margin dilutive program, whatever. So anyway, I’d go on this for a long time, but I think that the — customer obsession drives profitable growth. That continues to be our mantra. Innovation is what is — that’s how you get from tiny to small and medium to large, extra large.

And it’s a great product, and it’s only going to get a better product. And I sort of — I don’t worry a whole heck of a lot about having to buy that growth or anything like that. I think there are much better ways to get that growth, and it’s through innovation.

Aurelien Nolf: All right. Our next question is coming from Justin Post with Bank of America.

Justin Post: I’ll ask a couple on AVs. I’d love to hear your thoughts on how — nice job on the Waymo deal, but how do you think about AV economics and if that changes anything on margins? And then second, what you’re seeing in markets where Waymo is currently operating?

John Risher: Yes. Let me — it was Justin, right? Yes. Let me — I’ll take the last part first. I’ll kind of back into it a little bit and then maybe hand it over to Erin to talk a little bit about the economics of what we’re seeing. So the first — okay, the answer to the first question is, in markets where AVs operate, rideshare is growing faster than — and I’m talking about comparable apples-to-apples markets than rideshare — than markets where AVs are not operating. So that tells you right there that the first thing that happens as AVs come on is they expand the market. And this is what we — because these are new markets, right? I mean, let’s be clear. So that’s very exciting for us. As an industry, we should be very excited about AVs. It’s a good product.

It works well. People like it, and they take that and then they take traditional driver-driven rideshare as well. So that’s wonderful. So then let’s talk about the economics. So in the medium term — okay, first, like any new thing requires investment. You know that, right? So for example, in Nashville, where we’re hooking up with Waymo, we’re going to build a depot. Erin will talk to you about that in a couple of seconds. But the relationship — the reason I’m going to go into a little bit of depth on this, we spent quite a lot of time with the Waymo team really trying to work out an arrangement that was built to scale. And built to scale means it’s good for us and it’s good for Waymo and it’s good for riders. Okay. So what does that look like?

That’s good on one click. When you put AVs, we’re talking about now in Nashville, a couple of hundred AVs that will be on the ground over the next year, and that will grow over time. When you put AVs on the ground, the first thing you want to make sure is are you set up for them to be highly available. It doesn’t do any good to have an AV sitting there that’s not charged, it’s not clean, it’s not repaired, it’s not properly maintained, not ready to go. If you don’t have that, you got nothing. So why are we good at that? We’re good at that because our Flexdrive subsidiary has been doing it for many, many years. We have a 90% availability rate. Talk to the rental car guys, and they’ll tell you that, that is an admirable enviable number. So we’re good at that, and we’re only going to get better.

So that’s number one. And we get paid for that, Erin I’ll talk about that in a couple of seconds. And the second thing is you have to talk about utilization. Utilization means, okay, the car is available, but is there a rider in it because that’s how revenue is generated. And the answer there is we’ve worked very, very closely, very deeply, very technically with Waymo to set up an arrangement where regardless of whether the car is ordered on Waymo or on Lyft, we’re going to be maximizing utilization. It’s an integrated supply management system that’s quite technical, but — and will be hard to implement. But once we’ve got it right, we’ll be able to scale it up because both companies have ambitions to scale up both within Nashville and beyond over time.

So that’s sort of the structure of this thing. You got to have high availability, you got to have high utilization. You got to have systems that are super tightly integrated to make sure that the physical world and the digital world all come together seamlessly, and it’s a beautiful experience for riders, which is how you drive growth. And now we can talk about the economics, broadly speaking, of course, you’ve got to invest in some physical infrastructure, but we like the unit economics there a lot, and I’ll turn it over to Erin to talk about that.

Erin Brewer: Yes, sure. A couple of things to think about here. David just sort of described what we call an integrated supply management partnership, right? So that’s number one, on the fleet side, driving availability. And number two, as we think about the sort of integrated supply piece of it, it’s about driving utilization, 2 critical things. The good thing is about this construct that we have going in with Waymo is that Lyft earns regardless of platform, right? So regardless of where the car is deployed, we’re responsible for it being available. Obviously, when a ride is deployed on Lyft, then there’s economics there. So that’s the piece of the arrangement. David mentioned we’re building a depot. We had previously disclosed we thought it would be about $10 million to $15 million investment. We signed the lease. Teams are raring to go. So we’re excited about that for 2026.

Aurelien Nolf: And our next question is coming from John Blackledge with TD Cowen.

John Blackledge: Great. Two questions. First, can you talk about the opportunity in the low-scale markets as a driver of growth over the next couple of years? And then second, I think you maybe just got through your — the annual insurance renewal. Just curious what we should expect to see in terms of impact to cost of revenue.

Erin Brewer: Sure. John, I’ll start with that, and then I’ll turn it over to David to talk about what we’re seeing in those scale markets. So yes, we just completed our 10/1 renewals. What we’re seeing is we expect a mid-single-digit increase on a per ride basis, great outcome, very competitive. Our team continues to make really strong progress in bending that insurance cost curve. All the pillars that we talked about at our Investor Day are the same things, continuing on technology and approaches to make our platform to reduce accidents and reduce accident frequency on our platform, critical pillar. We continue to make strong advancements there. We’ve continued to build — to continue to deepen our relationship with our third-party insurance partners, which has a number of benefits, including the way that we share data and can quickly and efficiently resolve claims.

And then, of course, on the policy front, we talked — I talked a little bit about California a little a minute ago, but we continue to push forward with what we think are common sense reforms on the policy front. So really, really proud of our team for the outcome on our 10/1 renewals. And I’ll turn it over to David.

John Risher: Sounds good, and we can even tag team on this. I mean — so for the last — I’ll give you just a little color. Maybe it’s been 18 months or so since we’ve really started to focus on underpenetrated markets. And the reason is, I mean, aside from just sort of diversification, let’s say, you don’t really want all your eggs in the sort of biggest city basket. But 2/3 — we look at — I just mentioned that 161 billion rides in North America. About 2/3 of those are in underpenetrated markets. And we saw in Q3, about 70% of our growth came again from those markets. So there — so I mean it’s a large part of the country, a large part of the TAM. And then there’s — we’re seeing great opportunity there by doing some very clever and careful market management in those markets.

I’ll give you some examples so you can kind of visualize. You might think of — back-to-school is just kind of come and gone. And so when you think back-to-school, you might think high school. But if you think college, you’re talking about very significant communities, Bloomington and East Lansing and state college and so forth and so on. And in each one of these, we deployed a specific program to really tap into that back-to-school market, and we saw incredible results, actually outsized results compared to the growth we’ve seen elsewhere. So this is one of those — and I will also say, without sort of tipping our hat too much, I think AI can play an interesting role here as well as we look to manage those markets more carefully than maybe we have in the past.

So a lot of opportunity there, more to come. But for sure, you should expect to see quite a bit of our growth come from there in the future.

Aurelien Nolf: And our next question is coming from Michael Morton from MoffettNathanson.

Michael Morton: This one is for David. David, with the FREENOW acquisition complete and then the TBR deal, your global vision for Lyft is starting to come into view, and you love to talk about 2 customers in the car. So what I would love to learn what is the opportunity that you see outside of the U.S. for where those 2 consumers are being underserved by the competition and how Lyft can offer a better product for both of those consumers? And then maybe a very quick one. For Erin, we’ve had a couple of questions on this so far. But the #1 question we got from investors this last 90 days and after the Waymo announcement was, how can Lyft deal be accretive when the other guys talk about that they’re losing money on AVs? So I don’t know if maybe you could talk a little bit about is the take rate different because it’s a hybrid network or anything around there, I think, would be really helpful for some of the investors asking those questions.

John Risher: For sure. So Michael, if you’ll permit me, I’m going to zoom out just a click from your question and then zoom back in. So the premise was, gosh, you’ve acquired FREENOW and you’ve acquired TBR. What are you going to learn, particularly about service and sort of maybe like underserved markets maybe for riders and drivers. I’ll come back to the second part in a second. But let’s just talk about those acquisitions for just 30 seconds each. So FREENOW, you’ll remember the theory of the case is fairly simple, right? It sets us up great in the short term to become a much, much more global company. It doubles our TAM. It works with a leader in Europe across the taxi segment in particular, which is an incredibly important part of the sort of European ecosystem kind of ethos.

And it sets us up very, very nicely for autonomous in the future because fleet management and government relations turned out to be really important in the world of autonomous. TBR, more recent, and we haven’t talked about that publicly, of course, because it happened during the quiet period. This is a global chauffeur network, very, very global. I’d say that in the sense that it operates in some 3,000 cities around the world. And we’re talking about Paris and London and Frankfurt and Manchester and Zurich and Hong Kong and Singapore and Dubai. So world capitals. Why? Because — it focuses on executives, people doing, for example, non-deal road shows, many of the bankers on the call are very familiar with big events like the Super Bowl or F1, the sorts of things.

And so — and it offers a very, very high level of service. It’s part of a $54 billion market. This is a different market from the on-demand sort of even the on-demand high-value mode, like Lyft Black, for example. This is a thing way up above that, a much, much higher service level. Okay. So if you then look at those assets that we now have, then the question becomes, right, how can you deploy them best? And also how can you take what you’ve learned in the United States and bring it globally? And just maybe a little bit of editorialization here. I think taking a North American company and making a global company is no small thing. But we’re going to do it. We’re going to do it because the great companies are truly global. They’re the ones that are not just thinking of the U.S. as center of the universe and everywhere else is kind of being less them.

They’re the ones that learn from what you see overseas and bring it back to the United States and then take it all around the world. And so for example, if you look at TBR, their service excellence is unmatched. They’re very much a global company. They’re actually headquartered in Glasgow. They have their global operations center, center of excellence in Dubai. Extraordinary, extraordinary skill set there to level up the service that Lyft can provide all up and down the stack. And then FREENOW, of course, has been a high service group forever. Okay. So what are then the opportunities? I think the opportunities are I’d say that ride-hailing in Europe, in particular, has been a little bit of a degraded experience. If you spend time overseas, it’s maybe not even to the quality here in the United States, and I’m not satisfied with where we are in the United States either.

So I don’t want to tip my hand too much, but I would say a lot of the value we’re going to add from “Lyft” is bringing some of our marketplace skills like priority pickup and wait and save and some other modes to Europe, bringing our driver obsession, I think, in particular, to Europe. And then from Europe, bringing some of the service excellence that we’re seeing, particularly at TBR, but also from FREENOW and bringing that all around the world. So a bit of a long answer, but I hope that gives you a list of flavor of how we’re thinking about it.

Erin Brewer: Yes. A couple of things maybe that I would add to that, and then I’ll come back to your question, Michael, on the Waymo deal is also as you think about FREENOW, think about the skill set that we have around the way that we drive value and volume through partnerships. And our partnerships, the partners that we are aligned with are global, right? There’s a great opportunity there. We talked about — David talked about AVs just a minute ago, another great opportunity there. I think I mentioned earlier, TBR. Obviously, David highlighted that a lot of those are business rides. We’ve been investing across our high-value modes now for some time and just organically seeing some very strong success in Q3 alone, our high-value modes were — grew 50% year-over-year.

And so TBR is a great addition to that overall strategy. Sort of back to your Waymo question, I’d talk about a couple of things. I articulated this as being about driving availability and driving utilization. So the availability side leverages Flexdrive. And I think the unique thing here and maybe a bit of the advantage we have is this is something we know. We know how to keep a car available with very high quality, very high uptime, so to speak. And so we feel great about our ability to drive value to the partnership through that in-house expertise where, again, we’re bringing skill and experience to the table. The second piece of this is all about utilization, right? And these two words are kind of, I think, the magic ingredients here, high availability and then high utilization.

And if you think about this fairly differentiated way that this integrated supply management partnership is constructed, it’s really designed for high utilization, whether the car is deployed across Waymo One, dispatched across Lyft, you’re going to get maximum utilization. It’s really sort of our vision of a hybrid network over time. So that’s the framework with which I would leave you to think about this.

John Risher: If you don’t mind, I want to underscore exactly what Erin said and point out that in the Flexdrive side, not only are we best-of-breed in terms of availability. But as Erin said, it’s an owned asset of ours. That means we don’t have to pay someone else for that. So you can partner with other fleet management but that’s going to cost you money, right? So we’ve got a very, very nice cost — both high expertise and very nice cost position on that side. And then on the utilization side, yes, we think we’ve worked out a scheme that allows whether you get the car from Waymo or the car from Lyft, it’s going to be the same pool, dynamically sort of dispatched depending on this kind of algorithmic work we do, and that will lead to higher utilization, which then improves the economics for both of us.

Aurelien Nolf: Our next question is coming from Brad Erickson with RBC.

Bradley Erickson: Two for me. So first, I think last quarter, Erin, you’ve given us some nice insight on how FREENOW might layer into the model, both on bookings and then on the margins. I see the 42,000 rides in the letter, but just curious if you can update us on anything there, what you wound up seeing in Q3 and then what you’re embedding into the Q4 outlook? And then secondarily, when you’re calling for the bookings acceleration next year, I guess, in both North America and globally, just curious if you’re embedding anything additional partnerships wise that you have in the pipeline or if that’s just based on everything you’ve announced as of today?

Erin Brewer: Yes, I’ll work my way backwards. The 2026 sort of building blocks that I articulated right out at the set, if you’ll notice, it’s just all of the things that you know about today, announced partnerships, announced acquisitions, et cetera. So that’s what’s embedded overall in that outlook. And then as it relates to FREENOW, I don’t have a big update for you here for the back half of the year. We sort of talked about the incoming run rate. We expect FREENOW to accelerate in 2026. We’re expecting about EUR 1 billion on the top line overall. So hopefully, that’s helpful. We gave some additional guidance about the dynamics of how FREENOW flows into our P&L, talked about the impact on revenue margin, et cetera, but happy to go into any more detail, Brad, if you have anything else.

Bradley Erickson: I guess just — yes, you had talked about those gross margin effects last quarter. Just curious if those are playing out as expected. It sounds like they are.

Erin Brewer: Yes, they are. Yes.

John Risher: Brad, I might add just because we’re now talking about the international world outside of the U.S. Canada also turns out to be a nice growth driver for us. We’ve talked about the growth there in the past. I think we delivered about 11.5 million rides in the quarter there as well. So again, I know your question was about FREENOW, but just to sort of fill up the international story just a bit more.

Aurelien Nolf: Our next question is coming from Nikhil Devnani with Bernstein.

Nikhil Devnani: If I could please follow up on the Waymo partnership. How does the algorithm kind of balance demand between your funnel and their funnel? Presumably, you’re going to have a lot more demand on day 1 than they are. So what does that balance look like? And do you fully expect to be facilitating rides during peak times of day as well? Or is their platform the first one of choice when ride requests come in? It would be helpful to understand that. And then maybe a follow-up for Erin on insurance. Following California, are you expecting any movement in other — any other major markets as you think about 2026 and 2027?

Erin Brewer: Nikhil, I’ll start with that and then turn it over to David. So as I mentioned when I talked about our 10/1 renewal, working toward common sense, what we view as common sense policy and insurance reform has long been a pillar. I think in the past, we’ve talked about changes to reform in Florida, changes in Georgia. So this is something that’s not new. We will continue to work on it. Progress is difficult to predict. There’s nothing inherently in any of the remarks that we’ve talked about for 2026 necessarily assumed. I mean these things are difficult overall to forecast. But I would say that we are certainly optimistic that as perhaps other states see how some of the reforms in California, we believe will lead to much better ride accessibility, better earnings opportunities for drivers that they’ll think that’s pretty interesting.

John Risher: Well put. And then Nikhil, I’m not going to give you too much detail, but I’ll say a little bit, I think, maybe so that everyone kind of understands the complexity that you’re referring to. So yes, so imagine a world as will be the world we exist in next year, where there are hundreds of AVs in a market, but there’s no way that all of those AVs can satisfy all the ride requests, not even close. So okay. So — and then imagine — again, you don’t have to use your imagination. This is the future, where those ride requests for AVs are — well, those ride requests in general, but specifically for AV, of course, are coming in from 2 different platforms. They’re coming from the Waymo platform and they’re coming from the Lyft platform.

So — so you get quite a complex situation there that you have to manage if you want not to do goofy things like saying, okay, well, you, Waymo, get 100 of those and Lyft, you get 300, which is never a good idea because it means inevitably, there’ll be some stranded on one side, they don’t get to the other and get stranded on the silly stuff like that. So anyway, to your point, so then your first thought is, well, maybe you’re just going to come up with some other very basic heuristics. But it turns out those heuristics are not the way the world — the real world is very, very — head of marketplace stochastic. It changes very quickly, very dynamic. You have some peak times, you’ve got some low times. Neither one of us wants to be stuck with anyway.

So I can go into detail about this maybe another time. But the point is it’s not going to be straightforward. It’s not going to be like, okay, someone so gets the first 10 and then you get the next 10 or whatever it is. Literally, every single time a ride request comes in, the work that we have done and we’ll continue to do will be to figure out what is the absolute best way to fulfill that ride. And there will be many, many dimensions of that. Some of it is ETA and so forth, ETA, meaning how fast it is pick you up. Some of it might be time of day. It might make all the sense in the world to start picking people up at certain times of day using only AVs for certain reasons. So anyway, it’s sort of a non-answer, non-answer. I grant you that.

But this is the reason why this partnership, frankly, took quite a while for us to work out. But we’re very confident, both companies are very confident having run a [ bajillion ] models across this thing that we have something that is going to be effectively accretive for both and keep these assets best utilized. The last thing I’ll say is I think in a sense, this is really the argument for the big thing, which is a hybrid network. It’s really, really hard to satisfy demand just with AVs anytime in the near future. There’s just not enough supply in the world. And so — but drivers, they own their own cars of that size. There’s no asset ownership you have to have, and they come on and off quite dynamically, again, depending on pricing. So that’s the third dimension.

Put it all together, and we think we’re going to create something where the whole is great than some of the parts. Maybe someday down the road, we’ll tell you a little bit more about how we do that, but that’s the big picture.

Aurelien Nolf: All right. Our next question is coming from Ben Black with Deutsche Bank.

Unknown Analyst: This is Kunal for Ben. A couple of follow-ups on the AV and the Waymo opportunity. One would be in terms of building out the centers, the service centers in each market. Is that something that you’re going to do ahead of time like planning for the next few markets? Or is that going to be on a market-by-market basis based on partnerships that you have already entered into? And then second, what level of availability and utilization do you need to be breakeven or contribution profit neutral for the network to kind of pay off? So like in a 24-hour day, how many hours do you need the vehicle to be available? And how many hours of usage does it need to have?

Erin Brewer: So Kunal, I’ll start there. And then maybe, David, do you want to talk about how we think about over a much longer period of time, how you scale AVs across a broader set of partners. Short answer here, Kunal, is I’m not going to go into the details, obviously. As we ramp up this partnership, as we gain experience together, we have a lot of optimism. Obviously, both the teams will have more to say down the road, but I’m going to stop it at that.

John Risher: Yes. This is going to be an area where we’re going to have to be a bit a little vague. The thing — so, yes. Let me just — let me talk about utilization for one more second and then zoom out. So you might think to yourself, well, it’s not that hard to keep an AV utilized because you don’t have that many of them and you got a lot of demand. Well, it turns out that’s not the way riders think about things. Riders think about things, is this close enough? So I need to get some place. And is this car close enough to pick me up on time? And if it is, then I’ll take it. If it’s priced right. And if it’s not, then I won’t. And so this is where our history comes in, right? I mean we’ve been operating in Nashville for a decade now.

So we have an enormous amount of data about what time you would expect supply to be needed, where the demand is going to be, specifically, I mean, down to the block-by-block level. So it is this sort of — the inputs here are everything from geography to history, to weather, to special events, is a big event weekend and so on and so forth. And that’s something we’ve been doing for many, many years. And that’s expertise that we can bring even in a — in a new city, like it’s a new city for Waymo, not a new city for us. So — that’s kind of the good news. And then you’ve got to make sure that, as I say, the car is available to drive and that it’s priced right and so forth and so on. Again, I’m not going to talk about exactly those breakeven points.

But I will say that we look at the economics of this, and we don’t — we’re not scared by effect of the opposite. The unit economics you would expect would favor AVs over time, you would expect because the variable cost, obviously, to running an AV is relatively low, not 0, to be clear. There are cloud costs or electricity costs and maintenance costs and so forth. But it’s — there are certain costs you don’t have to pay. And then you would expect insurance to be lower as well. So those are sort of some of the inputs that we put in our model when we try to model these things out. But we like the economics of AVs a lot and think that we’ve set up something that from the start is going to be accretive and then we’ll get better from there.

Aurelien Nolf: Great. So our next question is coming from Walt [indiscernible] from [indiscernible].

Unknown Analyst: Can you hear me now? David, I just want to go back to the earlier question in terms of Nashville, and I think you said expand beyond Nashville. I think you meant maybe downtown Nashville, but can you just update us on how you see that relationship going over time if you execute with this kind of shared inventory that you have with Waymo that obviously is different than how Uber has structured it in Phoenix. Is there opportunity to get additional markets? And what time line do you think would have to occur before that relationship could expand not just beyond downtown Nashville, but into new markets?

John Risher: Yes. Good question and good clarification, Walt. So we have structured this partnership. I would say it this way. Both companies have ambitions to scale beyond just Nashville. And we built this partnership with the belief that, that’s the goal. Talking about time lines is premature. But I would say that certainly, the constructs we’re using here are constructs that both companies believe can be the basis of something that expands to other markets, and I’ll just sort of leave it at that.

Unknown Analyst: And do you think — just a quick follow-up. Do you think the structure of how you’ve done this deal with Waymo, because it obviously is different when you’re sharing that fleet, right, as opposed to separate fleets and Flexdrive make it a stickier relationship. Obviously, if you execute on both, it becomes maybe harder for Waymo to — at least in those markets that you launched to try and execute on something different.

John Risher: I mean I don’t want to comment exactly on how they view it, but I would certainly say that our goal, and I’m speaking just from a Lyft perspective here, is to provide such a great level of service that no one has any reason to look anywhere else. But yes, and I think it’s also fair to say that the deeper a partnership, the more likely it is that neither one wants to do too many other things beyond that. But here, I’m just speaking sort of generically.

Aurelien Nolf: And our next question is coming from Stephen Ju with UBS.

Stephen Ju: David, I don’t think I’ve seen you guys talk about the university programs in a while. And I suppose the opportunity is as attractive as it’s ever been as you get to onboard these users who get hopefully very accustomed to using Lyft on other people’s money. But I also recall there were all kinds of other directions for these partnerships between getting folks to doctors’ appointments, et cetera. So can we talk about the resources that you might be putting together to maybe accelerate the signing of the, I suppose, the enterprise customers because it seems like such a win-win development for everybody involved.

John Risher: Yes, Stephen, I appreciate the question. I guess maybe as — I don’t know if my habit today, I’ll zoom out a touch before kind of zooming in. So business-to-business opportunity, and there are different types, right? You mentioned universities as a particular area of interest, and we have specific relationships with certain universities to provide transportation on campus, very interesting. We have health care. Lyft Healthcare remains a leader in the field. It’s called nonemergency medical transportation, and it’s getting quite a lot of additional focus now versus the past. We’ve got a new — Buck, who continues to lead that is the same, but then over him, Suzie now brings kind of new perspective and new energy to that.

And then B2B, when you’re thinking about kind of corporate transportation of various different types. Of course, TBR is a very high-end thing. We talked about that already, but many companies have preferred travel partners and so forth. So I’d say each of these areas is getting renewed focus. One of the nice things about really focusing on rideshare is there are a lot of — like we’re not distracted by food delivery and all kinds of things, like we can really, really focus on rideshare and look at all the different segments and how we’re treating each one of them in the highest quality way. So — maybe what I’ll do, if you don’t mind, I’ll pivot just a tiny bit towards the business rewards or the business side of things rather than just the university and the health care side.

We, for a number of years, if I’m honest, we haven’t had a great offering for business travel managers who want to give their companies — excuse me, their employees a reason to choose Lyft. Now we have one. We rolled one out at the beginning of September. You get 6% back. You just mentioned this idea of other people’s money. So yes, so often as a company, it’s the company that’s paying. We’re giving you 6% back. You can then use that on your personal rides as well. That’s literally Lyft cash back, you can use it in personal rides. We’ve seen great uptake there. And by the way, how much does it cost? 0. It costs 0, which is different from the other guys that cost not 0. So that’s an area where we — so I would say just generally, again, business-to-business has become an increased area of focus for us.

We’re seeing really good traction in some of these early programs we put out. Health care has been a strength of ours for a long time. And then universities, I’m glad you bring it up. Maybe stay tuned for more on that one.

Aurelien Nolf: All right. Thank you, Stephen. Thank you, David. David, any closing remarks?

John Risher: I think if that’s it, my main including remark is you — then, well, better be hooking up your United MileagePlus to Lyft because that’s a great program and up to 4 miles back for every dollar you spend. Look, we’ve had a great quarter. And the reason we’ve had a great quarter is not just because of what we’ve done in the last 3 months. It’s because we’ve been doing over the last at least 2.5 years since I’ve been here, obsessing of our customers. That’s what drives profitable growth. I think when Erin and I started, I think the first quarter, I think we had consumed $329 million of cash, if I’m not mistaken. Now we’re producing $1 billion of cash. It’s a $1.3 billion swing. And the reason that’s happened is because we’ve been obsessed with our customers, and we have an incredible team every single day that wakes up and just crushes it, and they’re the ones that get all the credit.

So we get to talk about it. They’re the ones that do the work. And thank you all very much to investors for traveling along with us, and we’re looking forward to keeping up to date.

Aurelien Nolf: Great. Thank you, David. Thank you, Erin. This concludes today’s conference. Thank you for joining, and you may now disconnect.