[00:01] ride-hailing industry. You know Lyft. You probably just took a Lyft. Well, I'm here to tell you this company is reinventing themselves. I would keep an eye on what they're doing in Nashville with Waymo and driverless cars. It's
[00:13] Risher, the CEO of the company, all about it. Especially ahead of the World Cup when everybody's going to be using ride-hailing. And I'm going to try to I failed miserably. But that's part of the fun of making these intros. Take a
[00:27] the fun of making these intros. Take a listen. episode of Power Players with Brian Sozzi is Lyft CEO David Risher. David, >> It's nice to be here. >> You bike here, dude? That's crazy.
[00:41] >> I did. But to be clear, I didn't bike from San Francisco. >> [laughter] >> You would though. You would bike from trip. It was one of the most amazing things in my life. But that was That was
[00:53] >> It was way pre-Lyft, dude. That was when I was in my 20s. Before business school, what? Let's bike from Oregon to Boston. And we did it. It was awesome. Anyway, no, no. You can't just say How long did that take?
[01:07] >> 58 days. The most mind-blowing thing about it when I look back at it is actually not just the physics of it. It's the fact that it was And again, a million years ago. No cell phone, not no no Google Maps. It was all literally
[01:19] >> You've been hiding this story. You know how many times I've talked to you? You've been hiding this story from me. >> I do it multitudes. Multitudes. I got like >> No. No. No, no. So, one really cool
[01:31] States is just about every, you know, like small town will have a public park in the middle, often with a water tower, and you can just pitch a tent there. At don't know if it's still true. >> Um why do you still Are you still
[01:46] still ride in bikes? Like Why is that so important? Why do you do that? people talk a good game about customer obsession. My view is if you're not talking to people, you're just fooling yourself. And I'll tell you a tiny
[02:00] in New York. Uh I was biking back after a Broadway show that I saw. It was a cuz it's a fast way to get around New York compared to traffic sometimes. And "David." I'm like, "Who are you?" He's like, "Ah, he runs a a customer service,
[02:13] to pitch me on a thing. And it was like it was a perfect moment. It was like I not been out out and about. >> What have you learned? Like what what's been the most interesting thing you've learned by picking up people?
[02:26] >> Uh I mean, a couple of things. First of all, I really love the fact that people love the Lyft brand. They really do. And you know, I don't tell them who I am, but I often ask them why they picked it. And probably half the people say, "I
[02:38] interesting. Like you don't necessarily think of that in today's sort of world, values kind of matter. The other thing is just individual, you know, story before, but there was a woman I picked up who would go across the Golden
[02:53] side of this in San Francisco, she worked on the other side. She woke up at to check prices on ride share cuz it was it's 40 bucks, I got either work from home or maybe drive and park myself. And
[03:06] single day. And literally the day I was talking to her, she had donuts as a as a like, "I have to go to work." And that's really what kind of helped me understand dream to an economist or a business person, to a customer, it's it's uh it's
[03:20] the reason why we got to price lock and got rid of a lot of surge pricing. So, you learn things like that. >> Why do you think your brand is beloved? saying that because you're here. Like I've heard the same thing too. Is it the
[03:32] should show up on on front of the Lyft cars? Like what is it? saying. I'm just I'm just saying. >> Well, frankly, in a way that might be part of it, right? Is people think in sort of dyads, right? And so, part of it
[03:47] love, you know, our competition. But I the company. Look, remember the real innovator in the space was not the other guys. It was cuz they did a black car and app. Great. Nice nice medium small
[04:00] idea you might say. The big idea was anyone with a car can come pick you up. encouraged to sit in the front seat, you know, the pink mustache. Even now for example, we have a product called Roundup and Donate which allows you to
[04:12] your app. If you don't use it I recommend. You just choose a nonprofit That's sort of, you know, brings is a bit of a um a mission to what we do of people. >> Is there still
[04:27] thing still exist? I think back to like 10 years ago or when all these technologies were still emerging it was like Lyft versus Uber like toe to toe. >> Not as much. And frankly, I think it actually damaged the industry a little
[04:41] bit because it got people so focused on even internal to both companies one innovating. So they didn't come up with price lock or Lyft silver or for older people or or teens or you know, driver earnings guarantee. Like a lot of the
[04:55] space in the last couple of years. By the way, we were ahead of a lot of those edge. Women uh plus connect which is our women to women product. Uh that comes instead of just looking at each other. >> Who came up with surge pricing?
[05:10] just like a what a great way to make a quarter. really think the early thinking about it demand. And it's true. Look, all of a sudden it starts to rain. There aren't
[05:22] enough drivers on the road, but nobody wants to walk or you know, or or you taking a car. >> 100% 100%. And so what happens you raise prices. That does two things. It allows you to pay drivers more so more drivers
[05:34] come on the road and it suppresses demand. So it you know, so in a sense it's like the perfect almost um econometric science experiment. The problem is it drives people nuts. >> Delivery has been a through line your
[05:47] newspapers? >> I did. I did. Yeah, that was my first uh >> yeah, yeah, I've been out and about all my life. Yeah, yeah. Uh about that. My first real newspaper delivery job was the Washington Post,
[06:02] small local paper called The Advertiser. It was totally advertising supported, and I got into so much trouble as a kid because I literally, for a period of and I haven't said this publicly before, I would do some of the route, and then I
[06:15] away. I'm like, "Nobody [laughter] really wants this. Nobody wants this." There's a guy on Bradley Lane. This is in Bethesda, Maryland. He owned a store one of the biggest advertisers in The Advertiser. When he stopped getting his
[06:28] paper, all hell broke loose. And I got in big trouble. My my uh let's put it this way. My father, who kind of a strict guy, basically garnished my wages for a year to give them back to Mr. Stro Snyder to pay him for the ads that
[06:40] >> Well, those lessons, I mean, those lessons taught you a lot, I >> Yeah, I was talking to uh I just taped an episode with Mike Rowe. talking about like work ethic in this country. I was thinking back, my parents
[06:54] are divorced, and I think about the lessons I learned during a very small piece of my life. It was hard work, and sometimes I had to just go at it alone, >> So, I didn't know that about you. My parents were divorced as well, and I too
[07:07] brother, I had a single mom, she was working, and so there is a certain and know, old people sit around talk about, but I do think there is a certain resilience that, of course, is comes out of a life which is maybe not the easiest
[07:20] yeah, anyway, we're sort of the beneficiaries, even though it was hard >> I I do think we are a beneficiary, and I haven't reflected on it a lot, you know, push off to the side and you forget about, but as I've gotten older, there
[07:33] know what? Maybe your case like earnings day, yeah, it's important, but like look like, yeah, you know what? I have to get out of five stories, I have to help the >> It's all right. There's always an alternative.
[07:47] >> Um you came into Lyft it was a it was a steaming mess. I I talked to you early on. You had to make a lot of tough calls. Like how did you what was it like that first 6
[08:01] You know what? It was both tough, but also it was it clarifying. And here's worked for Jeff Bezos for a long time. So I really
[08:13] I would say learned from him this sort of customer obsession, you know, mantra and saw how well it worked for Amazon. And and so it sort of became my playbook. So because I had that point of view decisions like, okay, when you look
[08:25] you're paying drivers not enough, which was part of the situation that I fix this. This is just absolute table declining and their customer satisfaction is going down. So that's
[08:40] how you make the really hard call, which is we had to lay off 26% of the of the >> you came all of us and at first of all I'm like, hey guys, look, David's going But you came all of us and explained clearly like why you were taking those
[08:53] you doing stuff like that? >> They did. New CEO? So here is the to its credit I would say, before I got the job, they interviewed me. Remember, they could have just said, "Oh, we know you, you know, walk on in the job."
[09:08] together a 100-day plan and it had pieces about, you know, financial, you know, situation and the team situation and the culture situation of the things I said is the first thing we're going to end up having to do is do
[09:21] a really seduc- really significant reduction in force to be able to pay for the marketplace in order and then frankly restart the innovation engine around customers. Is that how did you know
[09:36] everything you needed to get done you got done at that point and then you go >> You know some of it you know we're talking you know as though we're a million years old but but I do have some you know
[09:50] some of this stuff before in my life. I think part of it too is again if you've obsession is what's going to drive profitable growth everything else kind different example. When I started the company had made a very public statement
[10:03] remote company you know forever right and that's what John and the the founders of the company exactly and and at the time of course I I know they believed it and I also came in and said I totally understand that that is
[10:17] and I am totally going to do something different we are going to come back to work and it's because in order for us to have great customer focused ideas about to walk the walk ourselves. So some of it's a little bit like picking a North
[10:29] kind of line up you know against that. >> How important you know what's been the office? >> Enormous absolutely enormous and I know look everybody you know people have have strong opinions about this look the the
[10:43] the for me culture this is Peter Drucker's line I'm eats strategy for breakfast. We have a great strategy but without a customer obsessed culture we can never get it done. Number one number two the way that
[10:57] people get attached to a company is not just the work it's the people they work with it's the relationships they have look I met my wife at work I mean it's that matter far far more than than than some small thing and you're just not
[11:09] know you put those two things together and I just think it really and frankly reboot itself because like okay we're going to do this we're going to make it work we're going to have good food we're going to try to make things okay for you
[11:21] of a rallying cry even if it was frustrating to people. >> I remember I mean I talked to it was Logan I used to talk to Logan and they had the and he had the view of like he wanted to do delivery of goods.
[11:33] Like there was a lot of stuff on the table. And so you're competitor, too. focused. Like why has that been so important? focused. And I think some of it is just necessity, right? If you're a somewhat
[11:46] you're probably better off, you know, doing one thing really, really well than things. And and I might actually even zoom out. I think that there is uh look, business models, and different models can work. But I'm kind of a believer in
[12:01] and then you know, kind of build off of that as opposed to you know, kind of the the the alternate. >> Where are you focused now? uh we spent the last 3 years uh first getting our financial house in order, of
[12:14] profitable growth. So, as you know, we're now growing. We just did about a $5 quarter. We'll do uh about a billion rides this year. Uh we'll we'll generate about about $1.1 billion in cash. We had just did over the last 12 months. Okay.
[12:27] So, once you've got that basis down, then you can start to make some moves. And our moves are both We call them out and up. So, out means overseas. So, we time, very US-focused. We made a big decision last year to go global. We
[12:41] also acquired a couple of companies since then um that have real strength in so many ways. It diversifies our business, but it also really sets us up >> Yeah, no. I love that one. Leave like a whole chunk of my cuz I'm obsessed with
[12:55] >> Yeah, a huge, huge platform shift going on in in the industry. The other The up direction is is going up market. So, as I mentioned when John and Logan started the company, their whole innovation was let's make it kind of an every person's
[13:08] what that left is a little bit of space at the top for a kind of black car and uh you know, value modes, we call them. So, as I think you and I talked about a couple weeks ago, we acquired a company called TBR. They do chauffeur services.
[13:20] We've really invested in Lyft Black. It's our highest-rated service. And that, just like an airline, you know, it gives you access to a group of people pool that's really hard to do if you only have kind of economy products.
[13:33] have a little more leeway here on on the podcast. [laughter] I I think I think Uber's going to up Black Lane and that disappoints me because it is such a service. Like how What is the growth opportunity for that high-end type of
[13:47] opportunity for you when they do it up. No, we're not just waiting for that to happen. I take that back. But when that >> So look, uh if you look at what we've done over the
[14:00] kind of native black service, we've brought so many, you know, higher-end you and I were talking, I was saying that a third of our cars now are Chevy that's kind of the go-to car. You know what I mean? So our drivers are now
[14:13] have fewer kind of part-timers and more doing, you know, all sorts of little bits and pieces uh kind of around the edge to make the black experience better. The real opportunity I think is
[14:25] on-demand service and really make it couple of hours, maybe you can book, you know, when you're, you know, on vacation that you want to have a little bit of an elevated experience. There's a lot of
[14:37] product. >> How fast can you How fast do you want to >> So fairly quickly. And the reason for that again is Well, first it's just, you know, geographic diversity. Let me actually step back. Lyft is a
[14:52] amount of fixed costs, you know, server capacity and and, you know, technology and algorithms that match people and And of course, to a certain extent, those costs go up with volume, but
[15:04] mostly they're fixed. So having bigger volume across that really helps just the the pure leverage economics of it of of the of the business. Second of all, rideshare company and a lot of that uh technology frankly hasn't been deployed
[15:16] super broadly outside uh in Europe. I mean, our competitors there, uh they do a better job. So, I think we can level up the experience there. And then maybe most importantly long-term, the autonomous self-driving world is
[15:29] ways around the world. Different technology, different regulatory uh acceptance, and it's really you know, sort of in our best interest frankly to a bigger footprint so we can kind of experiment and kind of ease our way into
[15:45] just in one geography. >> If I can go back, what what was the difference going from a board member to a CEO? >> So, this is a really interesting question, and part of what I have
[15:57] reflected on since doing this is how little power and knowledge you really have as a board member. So, the phrase that people use around boards, and it is a good phrase, is noses in, hands off. So, you want to
[16:12] investigate, you want to probe, but of course you can't do the job. Okay, fair enough. You cannot do the job. Boards that try to do that they fail. The problem though is on the noses in side, it's really hard to know what's going on
[16:25] saying that they're necessarily even trying to deceive or or anything like that, but they're telling you the story that they kind of want you to hear, and you're accepting it and maybe pushing back in ways. And frankly, until things
[16:38] get really tough, your general incentive is support management cuz you can't do best alternative? So, and none of this is by the way to say anything bad about good work, but even they realized it it it a certain time. They needed some help
[16:52] They just kind of needed you know, a different um set of of arms and legs. So, when I went in the company inside, I realized gosh, I kind of thought I knew >> [laughter] >> Not really. I learned a lot. I learned
[17:06] helpful, but man, what I knew versus what I didn't know is you know, one to you and like thinking back to when I first talked to you when you first got Like there's a different There's a different
[17:19] like seems to be like a next like another layer of things that you've learned. >> I mean is that over 2 years already? >> It's 3 years just over 3 years now. Yeah. You know
[17:32] one of the things that I sometimes talk about is this idea of Falcon mode and they fly super high but you know sometimes they have to kind of dive really deep and kind of so they can eat right otherwise they're start to and
[17:45] aren't there so they don't want to be on the ground. And like that I think you It it lets you be strategic and then it forces you to kind of get into the details and maybe what you're hearing is some scar tissue but maybe also what
[17:58] you're hearing is at the board level you can only be up here and and frankly I of go into it sometimes. >> Do you ever get comfortable in a position like this? >> Uh I mean I guess one way to say it is
[18:11] I mean uh I I can't speak generally. This is the first job of this type at this scale that I've had but what I can say is the company that exists today is so
[18:23] ago and 3 years from now will be so different again. It's hard to imagine I don't know I like I I I enjoy it so I guess I'm comfortable in >> You've gotten the rhythm down. There's like rhythm There's like an interesting
[18:37] >> Sure. >> What do you I asked you on the show >> What are you doing specifically was in Nashville? So I'll step back just one click and then answer the question. So we believe
[18:50] that self-driving cars are going to be a huge tailwind for the industry because they are a good product that people love once they take and they have a good cost over time will be much lower cuz they tend to get in fewer accidents.
[19:03] >> Which means that we can either make more money or more likely we will pass that along to riders in the form of lower pricing over time which will mean that on. So, that's all really, really good. Okay. In order to bring this vision to
[19:17] true. First, you've got to have great AV supply, right? You've got to find someone whose tech works. Waymo, of course, is the leader. They are our partner in Nashville. So, in Nashville, starting over the coming weeks and then
[19:29] months, you'll be able to not only order a Waymo on Lyft, but even when you order it on Waymo's own app, which will also exist in Nashville, we will be doing the fleet management. And that's the other piece.
[19:41] someone's got to take care of those cars, right? You don't have individual drivers who are charging them and and maintaining them and keeping them clean. That's the driver's job today. But in an AV world, that's going to be managed by
[19:54] a great team. We've got actually fleet management expertise we built up over 10 years or so through a Flexdrive subsidiary. And so, we've just literally built out an 80,000 square-foot facility that's going to charge and maintain and
[20:07] basically keep available, you know, hundreds of AVs. What happens to the drivers? So, first thing is the hybrid network is going to you see the you see it in parallel. At least I really do.
[20:20] >> I mean, almost forever. And here's why I say that. perspective. There will be customers, either always or sometimes, who just with the luggage, they want help with the groceries coming in the in the
[20:34] going to have to up-level their game a little bit, right? So, that'll be a providing, you know, other So, maybe they're they're your tour guide through the city. So, that that's one thing. But but the other truth is the economics of
[20:48] an asset-heavy business like AVs, because these are expensive cars now. thousand dollars today, maybe someday they'll cost 70,000 dollars, but they're still going to be expensive. So, the the at that point, you have an
[21:01] interesting situation where if you if you buy enough of those cars to satisfy around idle for 22 out of 24 hours. That's a you'd spend all your money just on cars they're sitting on. If you have too few,
[21:18] You know, you've got five in the city and and you're waiting two hours to get to get picked up. So, we believe, and I think that this is not exactly a hot take, I think it's just kind of manifestly obvious, that a combination
[21:30] the drivers and can sort of come online and offline during peak times. And then a fixed sort of set, a fixed fleet of AVs that kind of hang out sort of in the in the middle of that kind of economic sweet spot, is the it's the right
[21:44] economic model um for long-term success. >> Uh you had to have seen this video with >> Yeah. >> Like is that your worst fear? Like these Waymos just, I don't know, run amok on streets? Like they're kind
[21:59] >> you know, truthfully, there are things that I fear even worse than that. I fear example. Luckily, it was sort of harmless and sort of you know, like But irritating for the for the um the the neighborhood. Look, this is why I think
[22:14] neighborhood. Look, this is why I think there's a way of thinking of of AVs incorrectly as just like, you know, any other new tech. Like, "Oh my gosh, it's that's not the way the physical world
[22:26] fits and starts and step by step, and these are expensive assets that are quite complex, and the technology is still imperfect. Uh and and by the way, don't even exist today that five years from now will be super active in the AV
[22:38] are. So, that's kind of the stage we're in right now. then you you know, can't really say it, but like why don't you just merge with Waymo?
[22:50] merge with Waymo? >> You know, I think it at this point it really wouldn't be in either's company's best interest to sort of tie up in a kind of monogamous relationship like that, you know? And and and and
[23:02] there's sort of a good reason. Like when these new platforms come out, nobody to win. You might think that Waymo is and and maybe they will. They've got an super well-run company. But again, you
[23:14] with some, you know, much cheaper, much more efficient thing that 5 years from now will will make today's players all look like um sort of yesterday's news. Same thing with with them looking at us. If they've spent, and this is not
[23:26] exaggeration, tens of billions of dollars on R&D, tens of billions of dollars. So, their profit maximizing, value maximizing mode is to try to get those in as many people's hands as possible. And, you know, if if merging
[23:40] interesting for them just less interesting for the other guys to buy problem, right? So, I think in a way is for a lot of uh you know, polyamory.
[23:53] and getting to know each other and getting to understand each other's capabilities. And then maybe over time some sort of preferred relationship anything like that.
[24:05] Tesla a lot here. And you know, they're rolling out robotaxis. And you know, excited about that. And it's a key issue for Elon and his team. As someone in the trenches, how hard is it to scale up an autonomous driving company?
[24:18] >> So hard. So hard. And and I think this is what the outside world sort of gets gosh, you know, you put a car that can drive itself on the road and everything >> have like 2 million of these things floating on the road. It doesn't work
[24:31] >> It it really doesn't. And and this is not at all a slam on anyone. And and and even and of course you first have to decide like is the technology stack the a question that's sort of unknowable right now. There's just not enough data.
[24:43] gosh, it's hard to know. I'll give you a here in New York City. I don't know if you're aware of this, but the address of your building is actually slightly different from the street that it is on.
[24:55] >> The address is just Broadway. the street is, you know, a different street. I'll just I'll I'll I'll I'll leave people in suspense there. So, that happens single day. Pick up, drop off. So, we have a lot of information about that.
[25:07] leave your phone in the car? By the way, 8,000 people do that every single week that? And then back to the fleet management, how do you do fleet management at scale when you have really no expertise in that? Again, we've been
[25:20] over a decade. So, there are And then of course there are policy issues and there app issues and is the technology going to work even when it's snowing or different things that all have to line up in order for a service like that to
[25:34] but is it you rolling out these autonomous cars with Waymo, is that is that legacy-defining in this some point in your in your career at Lyft,
[25:48] right-size the business, you're generating a lot of cash. Is that the the ground? [laughter] You know, you don't you want to leave with a couple >> I would put it you know, sort of maybe yes, but with an
[26:03] asterisk. So, the way I think about Lyft's position today is performing performing quarter after day after day, minute after minute. We're going to do, That's a lot of people who are relying on us for their daily transportation,
[26:16] want to set a new standard uh for the industry of service. And we have to navigate this transition to just like, let's say, a Netflix as it to just like, let's say, a Netflix as it moved from DVD distribution to streaming
[26:31] to content. So, whether the particular relationship that we have today is going kind of our our future, you know, that's hard to say. But what I think is undeniable is two to three to five years from now, we
[26:43] company with a sort of hybrid network of self-driving and human-driven cars. And gosh, I want to make that happen in the best possible way. Why? you and Uber?
[26:57] you've been telling us. >> Yep. Generating cash. Profitable there, like why do they see that? >> Yeah. I mean, this is you know, I'm I love my job as as a CEO and there's a reason I'm
[27:10] not an investor because that's a different job that you know, other think maybe if I can go down this path just you know two steps. I think partially
[27:23] you know, investors simultaneously have very short memories and long memories. interested in what's happening right in the here and now, but long memories in company that for many years wasn't financially in in super disciplined
[27:36] company. So, it takes a lot of time to sort of you know, move beyond that and truth to that. That's backwards looking. Now, when you world is going to change the landscape, right? It's going to shuffle the deck.
[27:50] And I think our whole sector right now is under a fair amount of scrutiny of losers and so forth. And frankly, I think the lazy analysis is, well, you hurt by it or even if it's not hurt by it, you know, the second largest guy is
[28:04] guy. My own view is the opposite. My own view is we are so focused on this. So rideshare network and best freight group network. And as you point out, we're We're very profitable. So, I think there are a lot of reasons to love us as a as
[28:18] you know, they make their own decisions. >> Lastly, um before I let you go, uh you this I think in the past. You worked as you mentioned with Jeff Bezos. >> A, what did you learn from him? And then B,
[28:32] what do you think he will end up doing in space? >> Uh I Okay, I'll answer both. I'm not sure The second one I'm just speculate obviously. On the first, you know, it's
[28:45] uh of course the customer obsession focus I think maybe there are two things that people don't as much though understand people don't as much though understand about him. First, he he was an operator.
[28:58] He was an operator. So yes, he was a big visionary, but he really really wanted to get into the details. And in fact, I think So okay, quick quick side story. There's a guy named Scott Cook. Scott Cook, CEO, founding CEO of Intuit, um
[29:12] still on Intuit's board, was on Amazon's board in the early days, has since interesting and he uses Amazon as kind of his case study. And he says, "Look, CEOs typically are seen as kind of the vision people and they kind of leave the
[29:26] the how of the company to others." And one of the things that Jeff I think really understood is no, you also have to really get involved in the how. How is the organization structured? You know, is it making
[29:39] really smart choices about what it automates versus what it lets humans do? sound a little bit like like a lot, like he was kind of involved in everything, but he really believed that if you don't sort of organize yourself well and
[29:51] and cultures as well as just the vision, you'll never you'll never get anything him. Other thing is he was also a fairly good statement, but one of the things I saw over and over again is he would never go
[30:03] into a negotiation with someone where he didn't authentically think he had a just So it was a good it was a good lesson. >> Do you think he's going to bring data center space? >> I do. I do. Yeah, I think he's been very
[30:16] clear for a long time that space is not just about human exploration, although could be an area to frankly outsource some of the stuff that, you know, isn't so healthy for the for the the planet. And and and of course obviously, you
[30:30] amazing. Now you've got to get the electricity back to Earth. So there are it's not going to be solved with a big extension cord. But yeah, I don't I have but I'm 100% sure he'll have some version of success, of course.
[30:43] self-driving cars to the moon. >> Maybe. Maybe. >> This is an interesting point. I self-driving rover on the moon, Lyft >> I appreciate it. >> I'll let you go, David. Are you biking
[30:55] >> It's hot, but it's it feels nice. It's it's good. It's good to see you. >> Thank you, man. It was a lot of fun. >> That's it for today's episode of Power Continue to hit me with all that feedback. I love it and I get better at
[31:07] doing these interviews. Talk to you soon.