three years ago, The lift was wobbly. Evergreen riders who turned to Uber were also at risk of being driven off the road entirely. The founders were in charge, and in March 2023, they hired former Microsoft and Amazon executive David Risher to turn things around. The new CEO has expanded its service to other countries, struck deals with Waymo and Nvidia, reduced ride cancellations and paid drivers more. This week, Lyft announced that customers in New York will also see taxis among their options. The company is now reporting a profit — but it’s still in second place in ride-sharing, and its stock is down this year. I recently spoke with Risher about Lyft’s prospects, his nostalgic view of Uber, and his plans to have fleets of autonomous cars owned by tech companies or citizens.
Steven Levy: Where are you on your turnaround mission?
David Risher: When I came in, we were losing share – the lift was 26 or 27 percent compared to the other guy. We were losing money, $300 million a year. Things were not looking good. I went to the Jeff Bezos school, so when I came in, my entire focus was on customer obsession. We spent quarter after quarter to correct our cost position, so that we could lower prices. We have increased driver rates, because if drivers are not getting paid enough, they become very frustrated and do not provide good service, and leave the platform. We started doing something new again. So today, we are profitable. We have the highest driver satisfaction rates ever, and our riders keep coming back. And our share is now up to about 31 points.
Still your stock is down.
Our analysts and investors like the fact that we are growing quarter over quarter, but they also see uncertainty in the industry.
Thirty-one percent are still far behind. I saw a headline the other day, “Is OpenAI on its way to becoming Lyft?” The story wasn’t even about ride-sharing! What would it take to never see that title again?
That may be a wrong basis. We make one billion trips a year in North America. Others might do two. [Uber doesn’t break out numbers geographically but reports around 14 billion rides a year globally.] There are 3 billion trips between us. But people take 160 billion rides in their private cars every year. So it’s a huge market that you can grow into.
The reason our share has increased over the years is because our service is better. On average we will select you faster than those people. We have reduced driver cancellations. The next step is what we call “Save Money, Check Lyft,” which is based on a very basic premise that if you’re a rider and you’re only checking the other person, you’re leaving money on the table. If people check every time, our share will be more than 50 percent. I promise you.
Yesterday my son was on a stranded train and needed a ride a few stops down to the station. Uber was $70 and Lyft was $130.
We try to beat them more than we lose, but we have different algorithms, different data. We check religiously, obsessively, to make sure it’s true.
I often hear from drivers for both Uber and Lyft that the companies take huge cuts. Is that complaint valid?
The short answer is no. Certainly in the early days of this industry, there were massive effective driver subsidies, and there are still drivers who remember it or have friends who remember those days. We will never, ever, ever take more than 30 percent once we get the insurance.
