https://wccftech.com/lyft-gets-a-bump-after-co-founders-expect-profits-a-year-earlier/

Lyft (NASDAQ:LYFT) popped 10% today before sliding back down to end the day up about 6.5%.  The reason the company saw this boost today is that The Wall Street Journal reported today the company co-founders are expecting to reach profitability a year earlier than previously anticipated. The co-founders estimated that Lyft will be able to reach this profitability on an adjusted EBITDA basis in the fourth quarter of 2021. EBITDA for those new to the concept is earnings before interest, tax, depreciation, and amortization. These are the key components reported by a company to show earnings and expenses.  Speaking in an interview Tuesday at WSJ Tech Live conference Zimmer said, “We have in the bank over $3 billion, we have a clear path to profitability and the team is executing well. We need to build trust with a new class of investors and with two quarters beating expectations, we’re excited for the next few quarters.” Uber (NASDAQ:UBER) also received a bump today on the news.

This is great news for the shareholders in the company but other problems may derail this sentiment as Lyft fights California over AB5 which is an attempt to reclassify their independent drivers as employees for the purposes of taxes, benefits, and hourly compensation. Contributing to these problems are reports coming out from Jalopnik stating that drivers recently faced a mandatory app update that removed from the drivers the ability to see the rate that customers are paying from the drivers.  This may be an argument in California’s favor that the drivers by being denied access to this information are correct in classifying the drivers as employees. By obfuscating the ability of the drivers to see the rates paid by the riders the company may be able to charge the customer surge pricing while not paying a commensurate increase to the drivers during peak demand, thus pocketing the profits.