The ride-hailing company Lyft (NASDAQ: LYFT) saw significant growth in the fourth quarter of 2023, thanks to stadium rides to the successful tours of Taylor Swift and Beyoncé.
What Happened: The ride-hailing company Lyft saw a more than 35% increase in stadium rides in 2023, largely driven by the concerts of Swift and Beyoncé, The Guardian reported on Tuesday. This surge in stadium rides and improvements in airport pickups contributed to the company's growth.
This came after Uber Technologies Inc (NYSE: UBER) CEO Dara Khosrowshahi also confirmed the existence of the "Taylor Swift effect," acknowledging the significant boost in business during the artist's concerts. "Uber definitely ups its game for Taylor when she comes to town," Khosrowshahi said earlier this month.
Lyft's CEO, David Risher, who took over last year, led the company through a restructuring plan that included layoffs and the removal of management layers. These changes aimed to drive the company towards profitability. Lyft laid off 1,200 employees in April and decreased overall costs by 12%.
The company announced last week that it would compensate drivers if they earned less than 70% of what riders paid after external fees. This move came after Lyft and Uber agreed to pay $328 million to New York ride-share drivers in November, following accusations of wage and benefits withholding.
Despite these initiatives, concerns about safety, job security, and the public's unease with artificial intelligence have created a hostile sentiment around autonomous vehicles. To address this, Lyft has partnered with Motional to provide over 100,000 self-driving rides across the U.S.
Why It Matters: The "Taylor Swift effect" has been a recurring theme in the business world. The pop star's concert tour was estimated to have added $5 billion to the economy by the Federal Reserve in 2023. Her Eras Tour also broke a Guinness World Record for the highest-grossing music tour, further solidifying her impact on the industry.
The surge in Lyft's growth due to live events, particularly Swift's concerts, aligns with the recent industry trends. Lyft's fourth-quarter financial results showed quarterly sales of $1.22 billion. The company also guided for gross bookings of somewhere around $3.5 billion to $3.6 billion
Despite concerns about safety and job security, Lyft's partnership with Motional has seen significant progress in providing self-driving rides.