The Replacement: Can The New CEO Revamp Lyft?
May 15, 2023
The Replacement: Can The New CEO Revamp Lyft?
Former Amazon and Microsoft executive David Risher took the reins from Lyft’s co-founder Logan Green in April, amid steep drops in both market share and stock price. Here’s his gameplan.
Words by Jennifer Leigh Parker
Photos courtesy Lyft Inc.
It hasn’t even been a full month since David Risher became CEO of Lyft, Inc., and he’s already making drastic moves.
First, he laid off 1,072 people, roughly 26% of the workforce. Next, he informed employees of the San Francisco–based company that they would be required to return to the office at least three times a week beginning after Labor Day.
Then, he discontinued shared rides, a feature first launched by Lyft in 2014, preceding the advent of Uber Pool. (Uber still offers a carpool service called UberX Share.)
And just last week, Risher unveiled his first product upgrade, pitching a “new airport experience” to a group of journalists in midtown Manhattan. Sporting jeans and rolled-up shirtsleeves, he appeared cool, calm and collected — despite Lyft’s shrinking market share (it fell to 24% in March from around 33% pre-pandemic, according to Bloomberg data).
The app now makes it easier for customers to pre-book a trip. Riders have the option to hail a Lyft as soon as their flight lands, as opposed to waiting to order once they get to a ride-share pickup area. Lyft also announced a new calendar integration feature that pulls flight details and sends customers push notifications to book a trip.
“The real stress [of traveling] is uncertainty. What have we done? We’re doing calendar integration both on iOS and Android. Outsource the stress to the phone. It’s a tiny thing; but if you do that tiny thing really well, it makes people fall in love with you,” Risher said to the group.
As the summer travel season ramps up, Risher hopes this upgrade will boost airport rides, which currently make up about 10% of all trips. Huge Moves sat down with him to learn what else is up his (only slightly rumpled) sleeves.
Where is your main focus now?
It’s really on ride-sharing. I think there’s so much innovation left in this category, and what we launched today is an example. Here’s something that millions of people are going to experience — airport travel can either be high stress, or you can outsource your stress to Lyft.
In a sense, our competition isn’t just Uber. It’s staying at home. Every night shouldn’t be about getting a pizza and watching Netflix. We’ve got to get people out and about — and there’s a lot more that we can do.
So the concept of a super app is not part of your strategy?
Not really. I think riders can pick the best-in-class way to get out and about. The concept of a super app sort of assumes that people only have space in their brain for one thing, and they go there for everything. And while I know there are examples around the world where it has worked, there are also a lot of examples of people that are very good at picking and choosing what really works for them.
How important is pricing for you, and do you intend to keep Lyft less expensive than Uber?
Pricing is quite important for our riders, for sure. I would say our strategy is more to meet where the market is. Of course, market by market you’ll see all sorts of funny things happen. You’ll see us be a little bit cheaper on average than Uber, for sure. Let’s set that aside and say that the price is going to be what the price is going to be between us and Uber — and then let’s really differentiate on who provides the service that makes people fall in love, and say: You know what? I really should have taken a Lyft.
That’s why I’m not as excited about things like food delivery. From a rider’s perspective, you’re asking a rider to share a vehicle with a pizza or whatever that was just dropped off at someone else’s house. They don’t like the way the car smells; that’s a real thing!
For drivers, it’s a mistake to think that the delivery experience is the same as ride-sharing. One involves talking to people. The other is double-parking at a restaurant and maybe getting a ticket. Contactless drop-offs often lead to lower (or no) tips. That’s frustrating for the drivers.
When a business model is at odds with what customers want, it doesn’t tend to work out super well long term.
You’re in the U.S. and Canada. Are there plans to expand, or are you happy growing your business right where you are?
I think we can grow our business a ton in North America. A ton. We’re not even back to pre-Covid levels. And innovations like this have been absent from the sector for a while.
Now, if you know my background, I’ve spent more time out of the U.S. than in the U.S. over the last 20 years. I have personal interest in bringing what we do in the U.S. globally, but we have no timeline on that. And to be honest, our focus is doing a really good job here. And then we’ll see.
Talk to me about the product launch. Who did you tap? How did you build it?
I love that question. We really started from the customer and worked backwards, and said: How can we bring the whole team together and create a great experience? Of course there is engineering work. But the first thing you have to ask is: What’s the problem you’re trying to solve for the customer?
In our case, the problem was stress. It really was. From the time the wheels touch down, you’re thinking about all the different things that can go wrong. Baggage and so forth. So let’s focus on what we can control, which is making sure the car shows up when you show up. And then work your way backwards from that.
This is something I learned at Amazon. Let’s figure out what the problem is, and then get the team to build the solution. Of course, we have product design people, we have engineers — but we also have marketing people. The reason I underscore that: Someone I was recently introduced to said that Lyft had been on mute a little bit. I don’t think it does anyone any favors not to be out there talking about this. So we really brought marketing into the program as well.
This is the first launch we’ve done in a while. Part of this is to say to the sector, and to our customers: We’re back! You really should have both apps on your phone, Uber and Lyft. Because over time you’ll see real differences, and we want to make sure we’re part of that equation. I think every rider should have both apps. Because guess what? That’s how we’re both going to compete with each other and make better services for our riders, and then they’ll get to choose who they like better.
What’s the business logic behind your partnership with Chase?
The short answer is we’re part of the ecosystem. Just look at travel, where Chase has made such big investments. We’re part of the ecosystem, but we’re only a part of it. As Dana mentioned, something like 25% of all travel spending in the U.S. happens on a Chase card or product.
[Dana Pouwels, who also spoke at the Lyft launch event, is the managing director, Sapphire Lounge GM and head of Chase Sapphire partnerships at JPMorgan Chase. Chase currently offers select card members rewards points on Lyft rides.]
For us, it’s: How can we partner with a best-in-class leader? I think for them, it’s the same. I drove riders a couple weeks ago. About a third of the people said something like, ‘I chose Lyft because of the Chase rewards program.’
Before you signed on, Lyft had a partnership with Delta, Hilton and Alaska Airlines. Are partnerships your key to success in the year ahead?
It’s so important. I think the key to success is doing what customers want. But I think a really important component of that is deep partnerships. It’s a cliché, but it’s sort of like a marriage. You have to figure each other out, and over time you hopefully discover beautiful things about each other that you didn’t even know at the beginning. Or new ways to partner. I think with Delta, today, the partnership is run on frequent flyer points. Which is awesome, and I think people appreciate it. But over time, you’ll start to see other ways that the partnership can develop, which will make people who travel with Lyft and Delta super happy.
You inherited things at a rough time for the company. Why, personally, did you take this job?
I mean, this is in my wheelhouse… I was at Microsoft after Windows launched, and it was: How do we figure out a way to take product categories like databases, which were super geeky, and really hone the category? And we did — we went from 0% to 50% market share. Then I went to Amazon, which was a tiny little bookstore, and the goal was: How can we figure out a way to redefine the customer experience? Now, we have the Everything Store.
I shrug. No big thing. He laughs.
And so, when the shareholders of the board and [co-founders] John Zimmer and Logan Green asked me if I was interested in putting my hat in the ring, I said, gosh, to be honest, I hadn’t thought about it… But now that you bring it up, yeah! I absolutely would. And I’m having a great time.
Editors’ note: This interview has been lightly edited for concision and clarity.