Lyft plummets 31% after outlook disappoints and the ride-hailing company says it will need to spend more to attract drivers

• Lyft shares dropped as much as 31% Wednesday on disappointing second quarter projections.
• The ride-hailing company said it expected $1 billion in revenue in the second quarter, below expectations.

Lyft stock suffered its worst-ever single day decline on Wednesday, skidding 31% heading into the market close.

Shares hovering around $21.35 in late-day trading, down from their Tuesday closing price of $30.76.

The decline signals more of the same from skittish investors looking to flee once high-flying tech stocks at any sign of pressure. Lyft's troubles were also a drag on Uber stock, with shares of the ride-hail peer down 4%.

Lyft reported first-quarter results late Tuesday that exceeded expectations on both earnings and revenue. The company posted earnings per share of $0.07 against a $0.07 expected loss. Lyft just barely missed estimates on active riders reporting 17.8 million active riders against an expected 17.9 million.

On forward guidance, however, the company fell short. Lyft said it expected revenues of $1 billion for the second quarter, below analysts expectations of $1.7 billion. The company also told investors it would need to increase spending on driver incentives to counter a persistent labor shortage and soaring gas prices.

Lyft rigorously invested in incentives for drivers throughout the COVID-19 pandemic which put strain on its financials. The company did not specify the new spending amount it was targeting to attract drivers.