Lyft Try Again in a Couple Minutes

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Lyft(LYFT -7.96%)
Q1 2022 Earnings Telephone call
May 03, 2022, 4:thirty p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Skillful afternoon and welcome to the Lyft beginning quarter 2022 earnings call. [Operator instructions] As a reminder, this conference call is being recorded. I would at present like to turn the conference over to Sonya Banerjee, head of investor relations. Yous may begin.

Sonya Banerjee -- Head of Investor Relations

Thank you. Welcome to the Lyft earnings call for the quarter ended March 31st, 2022. Joining me today to hash out Lyft'southward results and key business initiatives are our co-founder and CEO, Logan Green; co-founder and president, John Zimmer; and master financial officer, Elaine Paul. 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 y'all that during the telephone call, we will be making forrard-looking statements. This includes statements relating to the expected affect of the continuing COVID-xix pandemic, the operation of our business, future financial results and guidance, strategy, long-term growth, and overall future prospects. Nosotros may also brand statements regarding regulatory matters. These statements are subject area 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 x-Grand/A for full twelvemonth 2021 filed on April 29th, 2022, and in our Form ten-Q for the first quarter of 2022 that will be filed past May tenth, 2022, as well every bit the current doubt and unpredictability in our business concern, the markets and economy.

You lot should not rely on our forrard-looking statements as predictions of futurity events. All forward-looking statements that we make on this call are based on assumptions and behavior as of the appointment hereof, and Lyft disclaims any obligation to update whatever forward-looking statements except as required by law. Our word today will include not-GAAP financial measures. These not-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 fiscal results, including a reconciliation of our historical GAAP to non-GAAP results, may exist constitute in our earnings release, which was furnished with our Form viii-One thousand filed today with the SEC. Information technology may also be found on our investor relations website. I would now similar to turn the conference call over to Lyft'southward co-founder and master executive officeholder, Logan Green. Logan?

Logan Greenish -- Co-Founder and Primary Executive Officer

Thanks, Sonya. Good afternoon, everyone, and thank you for joining our phone call. I'k incredibly proud that Lyft will gloat our 10th anniversary this month. Looking back, the start decade tin be divided into two chapters.

In affiliate 1, we overcame the odds and pioneered the industry, existence the first to launch and scale peer-to-peer rideshare, create a new regulatory category and establish Shared rides. In chapter ii, we made our business profitable on an adjusted EBITDA basis during a global pandemic. Nosotros were the beginning in our industry to accomplish this of import milestone, and nosotros did it earlier than we initially anticipated. At present nosotros're turning the folio to our most exciting chapter however.

In affiliate three, we program to get Lyft into the near impactful modernistic transportation network, which John will talk near more than. Our mission continues to serve as our North Star. Nosotros want to ameliorate people'southward lives with the world's best transportation. We have a lot of work in front of united states of america, and I'thousand incredibly excited about our route map to build Lyft into a much larger company.

Turning to Q1. Our results exceeded our outlook. January ride volumes were soft due to omicron, but need rebounded sharply in February and March. Average daily rideshare rides were up 20% in February versus January and grew further in March.

Given the strong recovery, rideshare rides for the first quarter reached a new COVID high. And our marketplace has been getting healthier. Total active drivers in Q1 were upward by more than than 40% twelvemonth over yr, and new driver activations were up 70% versus Q1 terminal twelvemonth. Consistent with what nosotros saw concluding year, drivers in Q1 gave more than rides on average than they did in 2019, and average ride ETAs in Q1 were 30% better on average than in the first quarter of last year.

Even as gas prices increased in March, boilerplate driver earnings were upward yr over year. Our assay shows that in March, drivers nationally spent an average of $0.61 more on gas per hour than they did in March of final year. Cyberspace of this increase, drivers using Lyft earned more than than $24 per 60 minutes on boilerplate, including tips and bonuses. To be clear, this is for all online time, which includes time drivers may have been doing other things, including earning on other app-based platforms.

And we concluded March with more active drivers than we had at the end of January. We're continuing to keep a close heart on gas prices and have taken steps to assistance offset these costs. We instituted a $0.55 per ride fuel surcharge in most markets at the end of Q1. I want to be clear, the boilerplate hourly earnings figure I just discussed excludes any do good from this fuel surcharge, which didn't go into effect until March 21st.

In addition, drivers who use the Lyft Direct debit menu are able to become up to 5% cashback on gas through the stop of June. And our partnership with Upside gives drivers discounts on gas with the highest savings available to top Lyft drivers. Now let me talk about Q2. Even as our marketplace has been getting healthier, we want to continue improving service levels in preparation for further growth.

So nosotros look to invest strategically in order to deliver the all-time possible experience for Lyft users. We believe more demand is ahead of us, particularly in the second half of this year. Keep in mind our Q1 rideshare ride volumes, which striking a new COVID high, we're still merely around 70% recovered versus the Q4 2019 level. And we see significant track in key markets like San Francisco, which was less than 50% recovered in Q1 versus Q4 of 2019.

The continued return of Shared rides and more use cases every bit we progress through the year is also expected to assistance drive demand. We remain cautiously optimistic that revenue growth for full yr 2022 will accelerate versus 2021. Now permit me turn the telephone call over to Elaine.

Elaine Paul -- Main Financial Officeholder

Thanks, Logan, and skillful afternoon, everybody. And congratulations to the team on reaching Lyft's 10th anniversary. I'm very excited to exist function of this company as Lyft enters its third chapter. I'd echo what Logan said, "We are focused on building our business organization for the long term." This includes investing in a healthy marketplace, which volition, in turn, drive calibration and operating leverage.

Before I plough to our financial results, y'all may accept seen that nosotros filed an 8-G and an amended 10-K on Friday. Nosotros restated our 2021 financial statements to correct a technical accounting issue in Q3 and Q4 related to how our reinsurance coverage was reflected in those periods. This restatement acquired our full year 2021 GAAP net loss to increment past v% or $52.8 one thousand thousand. To be clear, this aligning did not impact our revenue, cash balances or non-GAAP results in whatsoever period.

It besides does not reflect whatsoever change in the underlying performance of our business concern. Delight refer to our SEC filings for more detail. At present allow's talk about Q1. Rideshare rides were stronger than nosotros anticipated.

Given the bear on that omicron had on demand in January, we anticipated that ride volumes would exist down slightly in Q1 versus Q4. And even though January was soft, demand rebounded meaningfully in February and March. As a upshot, total rideshare rides in Q1 were upward quarter over quarter and reached a new COVID loftier. On the supply side, we ended Q1 with more active drivers than we had at the end of Q4.

Relative to last yr, as Logan mentioned, total agile drivers were up by more than 40% and new drivers were upward 70%. Accordingly, we reported Q1 revenue of $876 million, up 44% year over year, exceeding our guidance range of $800 meg to $850 million. On a sequential basis, our Q1 revenues were down 10%. This reflects the bear on of omicron on the first calendar month of the quarter and seasonality headwinds with shorter rides and less utilize of bikes and scooters.

We had 17.8 one thousand thousand active riders in Q1, which includes rideshare as well every bit wheel and scooter rides. This represents an increase of more 4.3 million people or upwards 32% versus final yr and reflects a mix of both new and returning riders. Active riders declined by 5% in Q1 versus Q4, reflecting the impact of omicron and reduced bikes and scooter usage. In terms of the recovery, information technology's worth noting that active riders increased 9% month over month in February and another 12% in March.

New rider activations were up 22% month over month in March. Remember that rider activations through the terminate of the quarter are typically dilutive to revenue per active rider since there is less fourth dimension for those riders to take rides. All the same, revenue per active rider in Q1 was the second highest information technology'southward ever been at $49.18, up ix% or roughly $4 versus Q1 '21 and merely five% short of the summit set in Q4 '21. Even while revenue per active rider benefited from a sequential increase in ride frequency, this was more than than offset by lower revenue per ride in line with the seasonal trends I mentioned before.

Earlier I motion on, I want to note that unless otherwise indicated, all income statement measures are non-GAAP and exclude stock-based bounty and other select items every bit detailed in our earnings release. A reconciliation of historical GAAP to non-GAAP results is available on our investor relations website and may be found in our earnings release, which was furnished with our Form viii-M filed today with the SEC. Contribution margin in the commencement quarter was 57.4%, exceeding our guidance of 56.5%. On a sequential basis, contribution margin declined by approximately 230 basis points, reflecting a shift in our revenue mix versus Q4.

The outperformance on revenue and contribution margin relative to our guidance helped drive strong Q1 contribution of $503 one thousand thousand. Allow's move to operating expenses. Operations and support expense for Q1 was $92 1000000, up 11% yr over year. That represents roughly xi% of revenue, flat with Q4 but down more 300 basis points versus Q1 terminal twelvemonth, reflecting leverage against superlative-line growth.

R&D expense in Q1 was $103 million, downwards approximately $29 million year over yr, reflecting the sale of our level five self-driving segmentation in Q3 of 2021. Every bit a per centum of revenue, R&D expense was 12% in Q1, down from 22% in the year-ago menstruum. Q1 sales and marketing was $115 million, upwards just 2% sequentially. Equally a pct of revenue, sales and marketing was 13%.

Within sales and marketing, incentives were 3% of revenue, which is a mix of driver referrals in addition to incremental rider incentive. G&A expense in Q1 was $167 million, upwards vii% versus Q1 '21. Yard&A expense as a percent of acquirement was xix%, down roughly 650 footing points from 26% in Q1 of '21. The reject versus last year is a reflection of better leverage on a higher superlative line.

Relative to Q4 of '21, G&A expense declined 23% and reflects reduced policy and professional person services spend. In terms of the lesser line, our Q1 adjusted EBITDA profit of $54.8 one thousand thousand was better than our outlook of between $5 million and $15 million. This outperformance was driven by peak-line strength and expense savings. We concluded Q1 of '22 with unrestricted cash, cash equivalents, and short-term investments of $ii.2 billion.

Before I move to our outlook, it's important to note that COVID and other macro factors like geopolitical dynamics and inflation are incommunicable for us to predict with any certainty. Hereafter conditions can change rapidly and affect our results. With that, let me start by providing some important context. We are encouraged by the recovery in demand since January.

Even if our marketplace has been getting healthier, nosotros desire to continue improving service levels in grooming for further growth. Over the by ii years, evolving COVID weather condition take made well-nigh-term need trends highly variable. Federal stimulants and other pandemic-related dynamics have served as headwinds to driver supply. Together, these factors create rapid shifts in demand and in supply that make it more difficult to reach a healthy balance when compared to a more typical environment.

Coming out of omicron, we want to invest more in driver supply in Q2 to movement our market place farther into balance. This volition set us up for the long term and ensure we're doing everything we can to take intendance of drivers and riders with the best possible experience. Nosotros besides expect to invest in fundamental business organization initiatives to back up the continued growth of our visitor. These investments volition have an touch on on the leverage we are able to evidence in Q2.

Over time, equally our marketplace health continues to improve, this will allow united states of america to support more ride volumes with better service levels. This will in turn let united states to achieve meaning operating leverage. Now permit me provide our Q2 outlook. Nosotros expect acquirement of between $950 million to $ane billion, which would represent quarter-over-quarter growth of 9% to xiv%.

In terms of profitability, we expect Q2 contribution margin will be approximately 56%, which reflects the impact of growth investments on our leverage. Post omicron, we feel the worst is behind us, and this coming quarter is an opportunity to invest in kick-starting the next twelvemonth of growth. Nosotros will do so with a focus on drivers, the overall marketplace, and some additional make marketing. As a result, we expect adjusted EBITDA of betwixt $10 million to $twenty million for Q2.

For full twelvemonth 2022, we remain cautiously optimistic that we will grow revenues faster than the 36% achieved in 2021. On a go-frontwards ground, fifty-fifty as nosotros invest in our business, we remain committed to existence adjusted EBITDA profitable. With that, let me turn it over to John to provide central updates on the business organization and our strategy.

John Zimmer -- Co-Founder and President

Thank you, Elaine. I'chiliad excited for our adjacent chapter and ready to scale Lyft into the nigh impactful modernistic transportation network. Let me talk about what this means and how we are going to go there. First, a modernistic transportation network brings today'southward fragmented set of transportation services together into one unified client feel.

Today, people have to deal with x unlike companies and go through x different channels to sew together all of their ground transportation needs. In much the aforementioned way, you can't employ a mobile telephone without attaching information technology to one of the large wireless networks, in the not-too-afar futurity, it will become incommunicable to imagine using a car and other modes of transportation without connecting to a network. Lyft's third chapter will be virtually completing the Lyft network, connecting rideshare, bikes, scooters, rentals, transit, and even personal vehicles to maximize value for our customers. Our singular focus on transportation is a large competitive reward.

Information technology enables us to get deeper within the transportation ecosystem to build experiences that become beyond today'due south condition quo in every mode. These elevated notwithstanding simple experiences strengthen the network today and help us prepare to commercialize autonomous vehicles into the future. Accept our rental automobile programs. As a reminder, we have Lyft Rentals, which is consumer-facing; and Express Drive, which is a driver-facing rental program.

Both contribute to our marketplace efficiency and allow us to support more of our customers' use cases. They also give us the foundation of data and hands-on experience we need to keep building our armada management engineering and capabilities that maximize vehicle uptime and lower overall armada operating costs. These exact platforms and skill sets are disquisitional into the future as we bulldoze maximum returns for our AV partners. Now let me provide an update on our three key strategic areas of focus for this year.

These include: one, accelerate our core; two, expand emerging and new products, including our cycle, scooter, rental cars, and vehicle services; and three, invest in our innovation stack. Let me commencement with accelerating our cadre. Even as nosotros continue to improve our service levels, we will as well evangelize innovations and partnerships that allow us to grow riders and use cases. 1 dandy instance is Priority Pickup, which is our rideshare mode that gives riders access to an even faster pickup.

We began rolling it out last year, and we've seen high repeat usage. This mode delivers meaningful value to riders while also making our network more efficient, improve understanding passenger preference. Nosotros are working to calibration Priority Pickup to more than markets and use cases as nosotros progress through this twelvemonth. In terms of partnerships, we recently renewed our human relationship with Chase, the largest credit card issuer in the United states.

Chase card members who ride with Lyft will go along to receive preferred points on those rides for the side by side three years. This partnership gives the millions of Chase card members even more reason to apply Lyft. The initial programme produced bang-up results, allowing us to meaningfully increase card members' transportation spend with Lyft. Adjacent, I'm going to talk about how we've been expanding our emerging and new products.

In Q1, nosotros grew the number of electrical vehicles bachelor to drivers through our Express Drive plan in California. This work is function of our commitment to achieve 100% electrical vehicles on our network by 2030. We've also been working to aggrandize Lyft Rentals to new markets, including Chicago and San Diego, bringing our best-in-class consumer rental feel to more customers. In Q1, we saw more kickoff-party rental action than ever before with growth of more than than 55% versus Q4.

And by building on our existing existent estate footprint, we can optimize our investments in these regions. Permit me spend a moment on what we've been doing to expand and diversify our micro-mobility operations. These systems deliver compounding value equally an additional entry point to our network. We've partnered with Spin to make their scooters available through the Lyft app.

Through this partnership, we tin can make more micro-mobility options available to Lyft riders nationwide. This integration is available in select U.S. cities today and will ultimately scale to 60 markets. Turning to our bike-share systems.

In April, we entered into an agreement to acquire PBSC Urban Solutions, a leading global supplier of bike share equipment and software. Nosotros're excited well-nigh this acquisition considering it complements and expands our ain bike share model. PBSC has a significant hardware footprint and will bring an incremental seventy,000 bikes in 39 markets to our business organisation. We are excited to build on the strong relationships PBSC has established with cities and operators effectually the world to support and expand these systems.

The transaction is expected to close in Q2, subject area to customary closing conditions. Finally, let me highlight some of the investments nosotros are making in our innovation stack. This refers to the R&D nosotros're doing to accelerate the applied science that underpins our network. We continue to advance our pricing technology, specifically the feedback mechanism that enables our systems to arrange to sudden changes in need.

This has significant value across our network and for detail utilise cases like airport rides. Demand for airport pickups tin exist highly variable depending on the book of arrivals and departures at a given time. And by enabling our systems to discover and adapt to these sudden shifts as apace equally possible, we tin optimize our service levels at airports and capture more rides. We are applying a similar approach to address supply need shifts that result from events and other unique traffic patterns.

Innovations like these tin enable us to address more rides, deliver a better rider experience, increment commuter earnings, and improve our summit line. Operator, we're now set up to take questions.

Questions & Answers:

Operator

Give thanks yous. [Operator instructions] Our start question comes from the line of Doug Anmuth of J.P. Morgan. Your line is now open.

You may ask your question.

Doug Anmuth -- J.P. Morgan -- Analyst

Thanks for taking the question. I just wanted to follow upwardly on some of the comments around the investments in driver supply. Yous talked almost drivers being up xl% year over twelvemonth and then up sequentially from year-end '21. Simply hoping you tin can help us sympathise what'due south going on with drivers around college gas prices and why you feel the demand to invest that much more in driver supply at present.

So tin yous help us just in terms of quantifying how much spend there might be in upcoming quarters? Cheers.

John Zimmer -- Co-Founder and President

Yes. This is John, Doug. Only for context, obviously, we're reporting on Q1, and it was the largest spike in COVID cases of the pandemic. And one matter to retrieve about, similar typically, when nosotros're managing the marketplace, there'south much more than organic growth or modify.

And when yous come up out of a large spike or a large change to the marketplace, and actually, we went through multiple of these large spikes, the importance of chop-chop getting service levels back but in a less organic mode is function of what's happening here. Then I would merely necktie those comments to the fact that Q1, there was omicron. And we want to -- nosotros're -- this quarter, Q2, which nosotros're talking about with that guidance, is about boot-starting the rest of the year's growth. And we feel that it's the correct investment to make.

There's no underlying fundamental foundational concerns. In fact, driver earnings compared to final year are upwards, average about $24, and that was before nosotros put in the $0.55 gas surcharge.

Logan Green -- Co-Founder and Chief Executive Officer

Yes. And so i thing that I think is important to understand about the marketplace is that supply adjustments are like moving the Titanic. It'southward very, very slow, whereas demand can change on a dime. And what we saw, most of the market place moves organically, right? So in that location are only kind of minor things that we can do to impact that.

And what nosotros saw coming out of omicron was, obviously, equally demand went down, more drivers signed off. And then need turned on a dime and shot back up, and drivers continued to rejoin the platform. So when we await at our role and it is -- again, most of it is happening organically in the marketplace. But when nosotros wait at our function, we await for what are the positive ROI opportunities where we can invest to accelerate the trend we're confident in.

And we're confident that we take turned an important page in the pandemic. The policies across the U.S., across much of the earth, are adjusting. And people are getting very comfortable living with COVID. And we experience very confident that this is the right time to put a picayune actress investment behind ensuring we're prepare to handle that demand and that we're there providing the best service levels we can.

And then we are making ROI-positive investments that -- where nosotros take high confidence that they volition pay off in the long term for the business concern and for shareholders.

Doug Anmuth -- J.P. Morgan -- Analyst

And any more you can add just around quantification?

Elaine Paul -- Chief Financial Officer

It'southward Elaine. I can add a little more context on our investments. So in add-on to investing in drivers, we're really focused on investing in drivers, the market, and a bit of marketing as well every bit we anticipate this continued comeback in need. In terms of our toll categories beneath price of revenue, we're projecting that R&D, sales and marketing and Thousand&A increase nigh 1 percentage betoken as a percent of acquirement this quarter versus concluding quarter, Q2 versus Q1.

And that's what you see impacting our margin this quarter. We believe that these investments in drivers and other initiatives that are supporting our growth ultimately are going to pay off in the healthier marketplace, which drives more rides, more elevation line, and that drives the flywheel of leverage. And we feel actually good about what nosotros're seeing in terms of demand for Q2 and in the back half.

Doug Anmuth -- J.P. Morgan -- Annotator

Great. Thanks.

Operator

Thank you. We have the side by side question comes from the line of Eric Sheridan of Goldman Sachs. Your line is at present open. You lot may ask a question.

Eric Sheridan -- Goldman Sachs -- Analyst

Cheers so much for taking the questions. In prior calls, you've talked about some pockets of market concentration that are still well beneath pre-pandemic levels. Tin you lot requite usa a sense of sort of geographic skew, where you're seeing -- still room for a fair bit of pre-pandemic recovery in the business broadly? And and so inside the business concern itself from a product or a type of ride standpoint, I think if you tin can help us sympathise in terms of either long- or short-duration rides, return to work, airports, elements of SKUs that are driving the business versus where in that location could still be recovering over the next couple of quarters. Thank y'all and so much.

Logan Light-green -- Co-Founder and Master Executive Officeholder

Yep. Aye, a couple of things. We encounter a ton of headroom for growth on the W Declension, especially -- and Lyft has always over-indexed our share on West Coast markets. Then I think that provides some real upside for united states of america equally the business organisation recovers.

Cities like San Francisco are nevertheless only almost 50% recovered, whereas nationally, the average is 70% recovered. So nosotros feel similar there'south a lot of dandy headroom there. The other area where I think there's a lot of headroom in the business concern is on Shared rides. And we have Shared rides alive in two markets today, live in Philly and Miami.

Simply we are quite excited near the opportunity to launch Shared rides. And for those of yous who remember, just back in 2019, they were a very meaningful part of the business, and again, an area where Lyft was known. We were very known for our Shared rides product. And so we're excited to light that up over again and imagine that, that will make up a meaningful part of the concern past the end of the year.

Elaine Paul -- Chief Fiscal Officer

Yep. Thanks for the question. And in terms of drome rides, nosotros mentioned that in Q4, airport rides were nine%. We were pleased that in Q1, it stayed relatively flat at 8% of rides, and we feel bullish about this going forward with the rebound in travel.

In addition, beyond the drome use cases increasing throughout the rest of the year, we too encounter headroom for not out. That'south nonetheless equally a per centum of full rides below where it was pre-pandemic. And we think that all the tailwinds are with us on that one. In addition, nosotros think there's more headroom with return to piece of work.

And inside travel and related to return to work, we also run into headroom with business travel. I mean that's a large opportunity for us.

Eric Sheridan -- Goldman Sachs -- Analyst

Thank you.

Operator

Thank you. Next question comes from the line of Stephen Ju of Credit Suisse. Your line is now open up. You may ask a question.

Stephen Ju -- Credit Suisse -- Analyst

Thank you. And so can yous talk nearly the benefits to either retentiveness rates or frequency of usage yous may encounter in those cities where you accept that expanded transportation offering with micro mobility so nosotros tin can possibly recall about how PBSC can help transform the business in those markets where you lot don't withal have a bike footprint? And besides last quarter, I think you talked virtually the desire to invest into a more, I guess, purpose design maps product that's appropriate for Lyft usage versus the full general utilise case. So can you lot share what your progress has been there and when we can commencement seeing you guys offset to send some products? Cheers.

John Zimmer -- Co-Founder and President

Sure. This is John. I'll talk to the bikes, and Logan can talk to the maps. Then as you mentioned, we're working toward acquiring PBSC.

Excited virtually the acquisition. We're seeing in 2021, more than 2.4 million get-go-fourth dimension riders across the U.South. try Lyft-operated bikes and scooters. There's some other stats effectually kind of how big our electric current presence got, and and then I can talk to what we get with PBSC.

In New York City, forty -- greater than 40% of communa rides on our platform were past Citi Bike. In 2021, Citi Bicycle, if you consider the transit organisation, is the 25th largest in the United States. So we're seeing positive success with this more dock-based kind of city partnership model where nosotros have exclusive relationship with the urban center. PBSC had done this as well and had done this globally.

And by doing that acquisition, we double -- more than double the number of bikes on the ground. And information technology really helps when we're -- when we take R&D that's going into edifice a better fleet. Eastward-bike, which nosotros but launched, which is doing really well, information technology'south lowered our cost of operations to exist able to spread that R&D cost across many more geographies. Double the footprint is nifty.

On the revenue side, nosotros can sell that hardware into a much larger base of cities. And so excited about that conquering, excited nearly the transit and bike business as a way for people in very dumbo urban environments to go affordable rides and to become loyal Lyft users.

Logan Light-green -- Co-Founder and Chief Executive Officer

And then on the mapping front, a couple of things. I, just to give a piffling more color on how we're approaching our mapping investment or mapping work. First is we're building on top of open street map, which is a long-standing open up-source project. And you have a lot of major companies, Amazon and Meta being a couple of the larger ones, who are heavily invested in that and making it a success.

So the project has accelerated a lot over the last number of years and has gotten quite good. Then that's the foundation of our -- of the Lyft map. And nosotros have been putting a lot of energy into capturing the unique data that we have equally a company. Nosotros have tens of thousands of cars, hundreds of thousands of cars on the route at all times, capturing data, sending that back to united states well-nigh traffic speeds.

We capture safety data. Nosotros capture road closures, etc. And we're able to feed all of that back to create a unique value-add layers to the map and, in some cases, edits and improvements to the map. And you meet a lot of that work is already evident in the product today.

And then a lot of those breakthroughs mean that a driver gets there are few seconds faster because we've navigated them around the street closure or we more accurately sort of identify that a commuter who's physically closer to you lot may really go stuck in traffic for longer than a driver that'south physically a little further away but has a directly shot on a street without traffic. Then those are some of the more than cardinal improvements that testify up in dispatch. With the navigation product, we just had a really exciting milestone where nosotros have completed our x millionth ride on the Lyft Nav stack. And so this is something where we're still scaling this upwards and iterating on information technology to make certain that we hit the sort of experience levels nosotros're targeting, but it'south starting to become really, actually practiced.

And you should encounter that scale up in a much larger way over the course of the year.

Stephen Ju -- Credit Suisse -- Annotator

Thank you.

Operator

Thank you. I have the next question comes from the line of Mark Mahaney of Evercore. Your line is now open up. You may ask a question.

Mark Mahaney -- Evercore ISI -- Analyst

Great. A couple of questions, delight. When practice you think rides volition recover to post-COVID levels? Is that what -- is that assumed in your guidance for kind of accelerating revenue growth this year versus terminal year? And then you provided some colour on rider incentives as a percentage of revenue. I think it was iii%, which looks like it'south pretty consistent.

What near driver incentives? How did that await equally a percentage of acquirement with what you've had in the past? So you gave guidance for the adjacent quarter on some of the opex lines. What are you bold is going to -- what should nosotros assume is going to happen with driver incentives as a pct? Thank yous very much.

Elaine Paul -- Chief Financial Officer

Let'south start about -- permit'south talk about incentives and incentives classified equally contra. In Q1, they were $350 million, and that was up 3% quarter on quarter and fabricated our important lever to achieve balance in our marketplace. All that being said, while we are continuing to invest in driver incentives, contract incentives per ride peaked in Q2 '21. And we still believe that that'due south a elevation.

I'm working backwards on your questions. I think your question earlier that was around -- do you listen repeating the other two parts to your question?

Mark Mahaney -- Evercore ISI -- Analyst

Well, any particular guidance you want to give us on those -- that contra item for the June quarter? And then when should nosotros expect rides to be above -- dorsum to pre-COVID levels, not merely COVID high but higher than where you were pre-COVID? And is that assumed in the guidance for the year? Thank you lot.

Elaine Paul -- Main Financial Officeholder

Yes. In terms of our optimism almost full yr acquirement and we do believe the full year revenue will exist upwardly faster than the growth nosotros saw last year, and then college than 36% twelvemonth-on-year growth. The exact means by which we become in that location between quantity of rides and the boilerplate revenue per ride, I don't want to comment on. And so, therefore, I don't desire to talk about like when nosotros think that volition hit pre-COVID rides.

But as you lot said, we recall that there's a ton of headroom and that we're yet at 70% there now. So lots of headroom on the quantity side to get there.

Mark Mahaney -- Evercore ISI -- Annotator

OK. Thank y'all very much.

Logan Light-green -- Co-Founder and Chief Executive Officer

Thank you.

Operator

Thank you. Adjacent question we have from the line of Deepak Mathivanan of Wolfe Research. Your line is now open. You may inquire a question.

Deepak Mathivanan -- Wolfe Research -- Analyst

Hey, guys. Thank you for taking the question. Really, I just want to kind of aggrandize a fiddling bit on the concluding question. Previously, when you've had the need to build driver side or the supply side, large office of it was tied to consumer prices and largely kind of paid united states of america higher earnings and incentives to drivers.

It sounds like this fourth dimension around these investments or some are coming from your P&50. Is that the correct characterization? Or is it however going to be funded past college prices? How should nosotros think about kind of like the -- what type of these incentives are in order to kind of build on commuter supply? Thank you.

Elaine Paul -- Chief Financial Officer

Yeah. And then in terms of funding the investments in drivers, some of that does come up straight from pricing. And the premiums that we encounter in prime time tin fund the investments in drivers. Some of our second order investments in R&D and what we're doing to invest in the marketplace, and that's what you see in this quarter impacting our outlook on overall EBITDA margin.

Those investments, which ultimately invest in a salubrious market benefiting both drivers and riders, that'southward what's impacting our Q2 margin mode.

Deepak Mathivanan -- Wolfe Research -- Analyst

OK. Maybe if I can inquire one more. You're guiding for contribution margin to be down quarter to quarter. Were at that place any onetime things that we should exist aware of in the 2Q guide? Or is at that place anything that we should be enlightened of? Thank you.

John Zimmer -- Co-Founder and President

Sorry, say that again, any sometime?

Deepak Mathivanan -- Wolfe Enquiry -- Analyst

In the contribution margin outlook for 2Q?

Elaine Paul -- Chief Fiscal Officer

At that place's zippo old impacting our contribution margin in Q2.

Deepak Mathivanan -- Wolfe Research -- Analyst

OK.

Operator

Thank you. We take the adjacent question comes from the line of Ygal Arounian of Wedbush. Your line is at present open up. You may ask a question.

Ygal Arounian -- Wedbush Securities -- Analyst

Skilful afternoon, guys. Just on the 2Q guidance and the revenue guidance. You lot talked about the February-March trends and how they were doing and improving. Tin can y'all talk a little bit virtually what's built into your expectations for 2Q, if there's any color that you tin can give on April? Are you lot seeing any factors from kind of aggrandizement in the macro or mayhap people not going out as much? Or is the reopening kind of going on pace? Just what'southward built into your expectations around that number?

Elaine Paul -- Chief Financial Officeholder

Aye. Absolutely. And so plainly, January took a big dip every bit we saw the impact of omicron. And and then as Logan alluded to in his comments, we saw a demand rebound in February and in March.

Our Q2 guidance is informed past our exit rate in terms of ride per week at the end of the first quarter, and nosotros're projecting depression single-digit growth in the boilerplate weekly ride that's informing our 2d quarter guidance. That depression unmarried-digit growth in rides is consistent with seasonality that we typically see Q2 versus Q1. And then we experience like that's a prudent sort of outlook for Q2. In terms of aggrandizement or something like that, that'southward not impacting our revenue guidance.

Our revenue guidance is driven by our outlook on rides, and that's really what'southward driving the $950 million to $i billion.

Ygal Arounian -- Wedbush Securities -- Annotator

Thanks. And then mayhap a little bit more particular on simply when you talk nearly getting service levels back sort of investing in that rides come back and go on to normalize, can you but give a niggling chip more detail on what that ways? What it is nearly the service levels that you're not happy with? Are there specific metrics that you're looking for, rider or driver ratio? Or just any more color around that, that could assistance us understand where we are now and where we want to go by the finish of the year?

John Zimmer -- Co-Founder and President

1 of the metrics that we like to look at is average ride ETAs. The proficient news is in Q1, they improved by thirty% yr over year. But over again, we expect demand to keep increasing, and we need to become supply -- the supply side set up for that. And so that's one of the main metrics nosotros await at, along with toll and quantity of driver hours and sections on the need side.

Ygal Arounian -- Wedbush Securities -- Annotator

Cheers.

Operator

Cheers. We take the adjacent question comes from the line of John Blackledge of Cowen. Your line is at present open up. You may ask a question.

John Blackledge -- Cowen and Visitor -- Analyst

Not bad. Thank you. 2 questions. Offset on Shared rides.

How did they perform in Philly and Miami in 1Q '22? And kind of what's the cadence for opening up Shared rides in other markets the balance of the yr? And and then second, a little bit of a longer-term question. If you could discuss investments in EV infrastructure for drivers every bit Lyft points to the 2030 goal. Cheers.

Logan Green -- Co-Founder and Chief Executive Officer

Great. Yes. So in Apr, Shared rides were roughly nine% of total rideshare rides in Philly and Miami. The cadence for reopening new markets will sort of be based on how nosotros run across initial launches go and kind of early on success of that.

So we look it to be over the course of the yr, just probably expect to be fairly fully ramped past the end of this year. And and so the second question on electrical vehicles. Do you want to give -- tin can yous ask that question again what you were looking for?

John Blackledge -- Cowen and Visitor -- Analyst

Yeah. The investments that you're making in charging stations across the country, any -- for the drivers, whatever kind of update at that place that might differentiate you from competitors?

John Zimmer -- Co-Founder and President

I'd say the biggest differentiation is that we have the Flexdrive program. And then today, drivers can rent EVs from Flexdrive, which is our independent managed subsidiary, which includes gratuitous charging. Actually, EVs have been bachelor through our Express Drive, which is the external name, we call information technology for drivers for years. They've had EVs.

And and then the structural advantage is that we have these fleet management capabilities at calibration, and we're able to distribute these EVs along with partnerships we've made on the charging side directly to our drivers.

John Blackledge -- Cowen and Company -- Analyst

Cheers.

John Zimmer -- Co-Founder and President

Yes. Ane of the other heady things we saw for the offset fourth dimension with EVs, that the fiscal equation for a driver made EVs as good or, in some cases, better financial decision than combustion engines.

Logan Light-green -- Co-Founder and Chief Executive Officeholder

Yeah. One kind of interesting fact is that as we saw gas prices shoot up, a number of drivers have both the gas-powered car and an EV, non a large quantity simply a number do. And we saw the sort of every commuter who had access to EV basically jumped in that EV and started giving rides in that EV equally gas prices shot upward. So whereas historically, they accept been at a premium, nosotros run into in the side by side couple of years there being a turning signal where EVs can provide much more kind of consistent cost construction for our drivers.

And correct at present, when you layer in all the incentives, it is roughly breakeven, but we think that sort of is going to tip over fourth dimension. And and so nosotros're really interested in doing what nosotros can to remove those barriers for our drivers so they can untap that. And I think, obviously, it'south going to get the majority of our business concern in the adjacent several years.

Operator

Thank y'all. We take the next question comes from the line of Brad Erickson of RBC. Your line is now open up. Y'all may ask a question.

Brad Erickson -- RBC Capital Markets -- Annotator

Hello. Thank you. Just a couple of follow-ups here. Elaine, the contra portion on the incentives baked into the guide, assuming it's college quarter over quarter, whatever magnitude you might exist able to give there? And so secondarily, on the contribution margin.

In the by, I think you've talked nigh 45% being the goal. I think yous dropped it this quarter at about 48%. Is that something you look to get back to as we look beyond some of these near-term driver incentives? And whatever sense if that'south maybe now a '23 matter versus a '22 affair or the intensity of these incentive investments is maybe going to exist a picayune shorter-lived? Thanks.

Elaine Paul -- Chief Financial Officeholder

On the driver incentives, await, we recollect -- sort of to reiterate something that John said earlier, we're coming out of omicron. And reiterating something that Logan said, it's hard to use the ocean liner of supply, but need is very equity. And we're seeing great signs on need. This is an investment quarter to get drivers in line with that.

When the marketplace reaches much healthier balance would exist hard to predict. Simply I call back it'southward important to reiterate that we're bullish on total year top-line operation. And we remain committed to adjusted EBITDA profitability, reaching GAAP-profitable over time. And all of our investment decisions are made through a ROI-positive lens with the goal of delivering and maximizing free cash flow growth per share.

And so nosotros're still super committed to that in the long term. And nosotros just wanted to be very clear that in Q2, information technology's a kick-first quarter in terms of our investment across not only drivers but other things that nosotros're doing to invest in growth initiatives for the hereafter, the health of the marketplace, and our brand.

Operator

Give thanks yous. The adjacent question comes from the line of Benjamin Black of Deutsche Banking concern. Your line is now open. Yous may enquire a question.

Benjamin Black -- Deutsche Bank -- Analyst

I think the questions that I have a follow-upward on supply. Uber struck deals with taxis in New York and too San Francisco. Simply curious if you're in similar conversations. And sort of across incentives, what's your strategy to grow supply organically longer term? And then one on regulation.

We saw the Washington Land ruling. Can you sort of assist the states understand the incremental costs associated with the new contained contractor model in the country? And could you give us an update sort of on the regulatory environment more than broadly as it pertains to work classification? Thank you.

John Zimmer -- Co-Founder and President

Logan is going to accept the taxis and thoughts on supply -- organic supply. And then, this is John, I'll talk almost the regulatory environs. Yes. On taxes, we are not planning anything similar to what Hooper is working on there.

Simply I recollect it's important to notation that none of the deals are exclusive. So nosotros practise plan to runway it and monitor the work. I think at that place are a couple of really big structural challenges to making taxis successful on the platform, and we've studied this closely over the years. Merely what'south unique about a taxi is that traditionally, they go most of their business organization from street hails.

And when you lot try to combine an e-hailing platform with a primarily sort of street hail-based business organization, it's in the driver'due south best interest to cancel on the due east-hail ride most of the fourth dimension any time they get a street hail that is sort of, by definition, closer and more of a burden in the manus. And so you see traditionally very sort of poor levels of reliability. You also see a unlike regulatory structure around pricing that makes it extremely hard, I think, to incorporate taxis in a way that really adds value for any of the parties involved. So we think it's definitely a challenge to have on.

Nosotros -- so nosotros volition continue to picket it, merely we do not accept any plans at the moment. Yous had some other question --

Logan Green -- Co-Founder and Master Executive Officer

About like organic supply ways that we can grow that. Nosotros're constantly investing in the referral channel that nosotros accept, which in some ways is organic, some ways -- in that location is an incentive on that. Simply more often than not, the biggest thing that'south going to be helpful, we practice not have concerns based on what nosotros're seeing on the basis around the growth in organic drivers. The challenge has been managing the pandemic and the quarter after the largest spike in COVID cases, wanting to ensure that we provide great service levels to all these potential new users and all these people that we have a take chances to win over from other services.

So organically, nosotros continue to meet positive trends. It is our principal aqueduct on the supply side. And I call back the biggest modify is going to be getting altitude from the pandemic. On regulatory, a few different questions.

Allow me first at the highest level. The latest Washington milestone at the end of March, having a new law signed that you lot mentioned, it protects the contained contractor model, which is preferred by drivers. The landmark piece of that specific law is that labor organizations were -- or a labor organization, the Teamsters there was involved and interested in pushing forward the IC model. So great progress coming out of Prop 22 the prior year going into a police that had labor support protecting the IC model.

Not going to annotate -- y'all asked virtually the price. Nosotros want to see the model in activity but like we did in California, but nothing concerning from a cost perspective. And overall, as nosotros stated a couple of years ago, I've been talking about the independent contractor models, what drivers want, is popular amid the voters every bit we saw in California. And it's groovy progress to run across a land like Washington moving forwards with legislation to protect that and fifty-fifty getting the back up of labor.

Benjamin Black -- Deutsche Bank -- Annotator

Corking. Thank y'all so much.

Logan Dark-green -- Co-Founder and Principal Executive Officeholder

Certain.

Operator

Thank you. We have the next question comes from the line of Steven Fox of Pull a fast one on Advisors. Your line is at present open up. You may ask a question.

Steven Flim-flam -- Fox Advisors -- Analyst

Yeah. Thanks very much. Two questions, if I could. First of all, simply again on the incremental trends around the margins and the revenues for this quarter.

Why shouldn't we be thinking more broadly about Q2 existence ever a seasonal investment period for the company around drivers given that yous ever have sort of that the difference betwixt volatility of rides and drivers in Q1? And and so secondly, is in that location whatever more you tin provide on the PBSC acquisition in terms of simply scale and closing and how quickly it could add to the EBITDA and revenues? Thanks.

Logan Green -- Co-Founder and Main Executive Officer

Yep. I think in terms of seasonality, the concluding two years is really COVID-driven. And then nosotros certainly don't expect that to sort of continue to have the type of impact it's had. But if y'all remember back to the terminal two January, there were huge COVID spikes that threw off the market and required a petty bit of boosted investment in Q2.

And so I call up there has been a pattern at that place the last couple of years. We practise not expect that to exist the instance going forward. I retrieve the way that we're seeing sort of demand trends shift even in the face of another variant sort of making the round, I retrieve people are very much adopting a live-with-information technology sort of approach to where I don't expect sort of future seasonal spikes to have the same sort of impact on the market. So I would not read that every bit a sort of permanent seasonal trend fifty-fifty though it has shown upwards for the last two years.

John Zimmer -- Co-Founder and President

And your 2nd question, maybe you could echo was specific to PBSC conquering?

Steven Flim-flam -- Play tricks Advisors -- Analyst

Tin can you give usa a little bit more color on sort of the financial impact or how you wait it to help the business on the top and lesser line after it closes? Thanks.

Elaine Paul -- Chief Fiscal Officeholder

Aye. Thanks for that. Nosotros are not providing any guidance specifically related to our -- to the conquering. So, unfortunately, nosotros're not commenting on that at this time.

John Zimmer -- Co-Founder and President

Aye. Strategically, as has been stated, there are great revenue opportunities and leverage against our R&D investments that we're already making by doubling the number of bikes -- more than doubling. And it diversifies that for that specific product, bikes and scooters. Information technology diversifies the geographic concentration and customer mix.

And overall, nosotros think we tin bulldoze existent cost savings by streamlining their supply chain.

Steven Pull a fast one on -- Pull a fast one on Advisors -- Annotator

Swell. Capeesh the telephone call. Thanks.

Logan Light-green -- Co-Founder and Master Executive Officer

Give thanks yous.

Operator

Thank you. We take the next question comes from the line of Lloyd Walmsley of UBS. Your line is now open. Y'all may ask a question.

Lloyd Walmsley -- UBS -- Analyst

Ii, if I tin. First, simply on your market share. How do you experience about your market place share overall? So mayhap on a geographic mix ground, are you seeing whatsoever trends, positive or negative, you would phone call out on market share? And then kind of related to that, how do you feel well-nigh Lyft Pink subscriber trends and kind of how that offering compares to other subscription offerings in the market? Any big changes aside from renewing the deal with Hunt that nosotros should think most?

Logan Dark-green -- Co-Founder and Chief Executive Officer

Yeah. Slap-up. So first on marketplace share. And broadly, we run across the competitive environment has remained stable.

And based on all the third-party information that we track, and I'1000 sure you're tracking as well, our market place share is roughly consistent with where it was pre-COVID. And our service levels, both price and pickup time, are competitive as well. And so I call back as we kind of look forward to the recovery, we run into two big areas of upside. Ane is that our share over indexes on the Due west Declension, which is less recovered broadly versus the balance of the country.

And then I think in that location's a lot of great upside there and on Shared rides, which we were talking about before. So those are the two big kind of upside factors we see in the remainder of the year as the West Coast recovers and if Shared rides relaunch and become a larger part of the business organization. So bottom line, we feel very confident in our competitive position in the marketplace. In terms of membership, Lyft Pinkish, we are very committed to our membership program, Pink, and come across information technology as a long-term growth commuter for the business.

In terms of Uber'southward product, UberOne is conspicuously very focused on nutrient and food delivery. Ridesharing is a smaller component of that. And then we don't take any kind of broader steps to share on Lyft Pink other than we're very committed to it and excited to see it become a larger part of the business over time.

Operator

And that volition be the last question. Presenters, exercise yous accept whatsoever closing remarks?

Logan Green -- Co-Founder and Main Executive Officeholder

That's everything. Thank you all for joining the call today, and we look frontward to talking with everybody side by side quarter.

John Zimmer -- Co-Founder and President

Cheers.

Sonya Banerjee -- Head of Investor Relations

Thank you.

Operator

[Operator signoff]

Duration: 60 minutes

Call participants:

Sonya Banerjee -- Head of Investor Relations

Logan Light-green -- Co-Founder and Master Executive Officer

Elaine Paul -- Main Financial Officer

John Zimmer -- Co-Founder and President

Doug Anmuth -- J.P. Morgan -- Analyst

Eric Sheridan -- Goldman Sachs -- Analyst

Stephen Ju -- Credit Suisse -- Analyst

Marker Mahaney -- Evercore ISI -- Analyst

Deepak Mathivanan -- Wolfe Enquiry -- Analyst

Ygal Arounian -- Wedbush Securities -- Analyst

John Blackledge -- Cowen and Company -- Analyst

Brad Erickson -- RBC Capital Markets -- Analyst

Benjamin Black -- Deutsche Bank -- Analyst

Steven Fox -- Fox Advisors -- Analyst

Lloyd Walmsley -- UBS -- Annotator

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