Three years ago Lyft was shaking. A person who constantly used Uber was at risk of falling off the road completely. The founders took over and in March 2023 hired former Microsoft and Amazon executive David Risher to turn things around. The modern CEO expanded its services to other countries, struck deals with Waymo and Nvidia, reduced ride cancellations and increased pay for drivers. This week only, Lyft announced that customers in Modern York will also see taxis among their options. The company is currently profitable, but still ranks second in ridesharing, and its stock has fallen this year. I recently spoke with Risher about Lyft’s prospects, his jaundiced take on Uber and his plans to manage fleets of autonomous cars owned by tech companies or civilians.
STEVEN LEVY: Where are you on your recovery mission?
David RISHER: When I came in, we were losing share – Lyft was 26 or 27 percent compared to the other guy. We were losing money, $300 million a year. Things weren’t looking good. I went to Jeff Bezos’ school, so when I came here, my sole focus was customer obsession. Quarter by quarter, we got the cost position right so that we could lower prices. We’ve increased driver rates because if drivers don’t earn enough, they get very frustrated, don’t provide great service, and abandon the platform. We started innovating again. So today we are profitable. We have one of the highest driver satisfaction rates we’ve ever had, and our passengers keep coming back. And our share is currently around 31 points.
However, your shares dropped.
Our analysts and investors love the fact that we are growing quarter over quarter, but they also recognize the uncertainty in the industry.
Thirty-one percent is still a distant second. The other day I saw a headline: “Is OpenAI on track to become Lyft?” This story wasn’t even about carpooling! What should you do to never see this headline again?
This may be a false assumption. We provide one billion rides a year in North America. Other guys might do two. [Uber doesn’t break out numbers geographically but reports around 14 billion rides a year globally.] That’s 3 billion rides between us. But every year, people take 160 billion trips in private cars. So there is a gigantic market in which you can expand.
The reason we’ve been gaining share over the last few years is because our services are simply better. On average, we pick you up faster than they do. We have reduced the number of cancellations by drivers. We call the next phase “Save Money, Check Lyft,” which is based on the very basic premise that if you’re a driver and you only check out the other guy, you’re leaving money on the table. If people checked every time, we would have a share greater than 50%. I promise you.
Yesterday my son was on a stuck train and needed a ride to the station a few stops away. Uber was $70 and Lyft was $130.
We try to beat them more often than we lose, but we have different algorithms, different data. From a religious point of view, we obsessively check whether this is true.
I often hear from drivers – both Uber and Lyft – that companies are accepting too much cutbacks. Is this complaint valid?
The brief answer is: no. There were certainly huge, effective subsidies for drivers in the early days of this industry, and there are still drivers who remember it or have friends who remember those days. We will never, ever take more than 30 percent once you purchase insurance.