LYFT TO DISPOSE SOME BIKE ASSETS, CUT JOBS IN OVERHAUL

(Bloomberg) -- Lyft Inc. plans to write down some of its bike and scooter rental assets, and cut 1% of its employees as the ride-hailing company struggles to turn consistently profitable.

The plan is part of “efforts to align strategic priorities and to reduce operating costs,” the company said in a regulatory filing on Wednesday. Measures will include “right sizing” its inventory of bikes and scooters, and taking an impairment charge, a Lyft spokesperson added in an email. The firm had nearly 3,000 employees at the end of last year.

The company expects to incur approximately $34 million to $46 million of restructuring and related charges, due to asset disposal costs, severance payments and advisory fees. The charges will primarily be incurred in the third quarter, it said.

Lyft, which operates bikesharing programs in cities including New York City, Chicago and San Francisco, issued ambitious three-year growth and profitability targets in June, signaling an effort to turn around its core ridesharing business that has struggled to gain share from rival Uber Technologies Inc.

The company had been looking since last summer for a strategic partner that can invest in its bikes and scooter rental infrastructure, but is no longer searching for a buyer, the spokesperson confirmed. The firm also raised prices for its popular e-bike rentals in New York in July in an attempt to offset high operating costs.

In a separate blog post, Lyft said it will spend less on research and development and it will no longer operate standalone dockless bikes and scooters. It will discontinue dockless scooters in Washington and is “exploring alternatives” for dockless bikes and scooters in Denver. The spokesperson added that the company will prioritize e-bikes going forward.

“We’ve always expected this part of the business to continue to be a meaningful part of Lyft’s offering now and into the future,” the spokesperson said.

As Bikeshare, E-Scooter Popularity Soars, So Does the Cost

Lyft expects the restructuring to improve annualized adjusted earnings before interest, taxes, depreciation and amortization by approximately $20 million by the end of 2025 due to savings from headcount reduction, operational efficiencies and commercial strategy enhancements, it said in the filing.

Shares of Lyft were up less than 1% at 1:32 p.m. in New York. The stock has declined about 24% this year.

(Updates with additional company comment in the fifth paragraph. An earlier version was corrected to remove references to a sale in the headline and lede.)