Lyft may no longer offer carpool services again, but this is one of several changes the company’s newly appointed CEO can make to focus on its core ride-hailing business and make it profitable. Not too much.
David Risher, who will become Lyft’s CEO in mid-April, has told TechCrunch in various interviews that other features may also be deprecated. For example, his Wait & See feature, which allows passengers to pay cheaper fares, could end if passengers in a particular region wait for the best-located driver, he said.
Former Amazon executive Risher told TechCrunch: “There may come a time when you say that sharing a ride was great for a while, but it’s time to let it go.”
Co-founded by Logan Green and John Zimmer, Lyft launched a small carpool service in 2014 before expanding its service. Uber launched Uber Pool in the same year. Both companies discontinued their carpool service during the pandemic and then revived new versions. For Uber and Lyft, carpooling has historically been a money trap, a loss-making ploy to attract riders with cheap fares.
Nothing has been decided yet, but the potential move will be how Lyft’s new management will stem losses and eventually take market share from its main competitor and oft-cited big brother, Uber. Here’s an example of what you want to take back. Instead of adding new products like delivery or selling the company (neither of which Risher says will happen), Lyft is going back to basics.
“The first order of business here is to focus on the basics of ridesharing,” said Risher. “The reason I say that is because in this type of market with competitors, if you want to exist in the long term, you can’t lose share to others. And I think this duopoly is a good thing. I think in so many other markets you really need some choice as a customer and you need some choice as a driver and it keeps us honest and allows us to play with each other a little bit. increase.”
Already a big company, Uber has gained more U.S. market share from Lyft in recent years through all of the above approaches, including food delivery and transit services. Today, his Uber market share has grown from 62% in early 2020 to about 74% today, compared to Lyft’s 26%, according to YipitData.
Another study from Similarweb found that Uber leads in monthly active users (MAUs), and that lead has increased over time. In February 2023 alone, Uber will have 9.4 million MAUs, 62% higher than Lyft’s 5.8 million MAUs. This time last year, Uber only had a 48% advantage over his Lyft. Uber outperformed Lyft in both Apple and Google app stores, and had 22% higher Android downloads than Lyft in the past 12 months, according to Similarweb data.
Uber takes a different approach to pursuing profits than Lyft. While Lyft is sticking with its ride-hailing service, Uber has expanded into delivery through his UberEats platform, adding a slew of new products to attract users, but each product brings customers to other Ubers. You’re also creating a closed business loop that feeds back into channel.
Uber CEO Dara Khosrowshahi said during the company’s third quarter 2022 earnings call on November 1. It continues to grow across the platform, driving new customers and driving retention. ”
Risher said Lyft wouldn’t try to compete with Uber by adding a delivery service to its app. One reason, he says, is that he doesn’t believe delivery is a customer- or driver-driven decision.
“From a driver’s perspective, they now go back and forth between picking people up and picking up pizza,” Risher says. “When buying pizza, he has to park twice in a restaurant with seven other people. Then in two weeks he gets a ticket once and gets in the car and drives again.” , I have to get down and call you.” Doorbell. This is a completely different cycle than ‘pick people up and just carry them’. ”
He also said Ryder might not want to ride in a car that has just dropped off a few slices of pizza.
first order
“I think for a lot of people, Lyft has become a bit of a sideline from the back of their minds. said Risher.
This could mean that Lyft doesn’t charge more than its competitors and drivers pick up and drop off customers on time. In the past, Lyft was an attractive option for him as it offered a cheaper ride-hailing service than Uber. Now, after the post-COVID driver shortage, his average mileage on Lyft is on par with Uber, according to further YipitData research.
Risher declined to say whether Lyft will cut staff to keep costs down. However, CFO Elaine Paul hinted at such a move during the company’s fourth quarter 2022 earnings call. Paul also suggested that Lyft shift to hiring workers outside the United States who are less likely to expect fairness as part of their compensation.
Risher seems to be most focused on creating more demand for its services while making operations more efficient. These efforts extend to increased demand for Lyft’s micromobility business, said Risher, through some form of cross-pollination between the two verticals.
“For one thing, I don’t think it gave riders or bikers a good enough reason to try rideshare,” he said, noting that he is an avid cyclist. “If you have both of these ways for people to get around, how can they reinforce each other? Because they’re a little too parallel right now.”
Lyft now offers a Lyft Pink membership program that offers riders ride-hailing benefits such as free priority pickup upgrades, flexible cancellations, and discounts on bikes and scooters. Membership also includes one year of free upgrades to his Grubhub+ and SIXT car rentals, representing a half-baked attempt to capture more of the transportation market through partnerships.
Analysts still wary of Lyft’s recovery
Lyft went public in March 2019 at a value of $24 billion. Today, Lyft has a market capitalization of approximately $3.35 billion. Uber has a market capitalization of $60.44 billion. Investors initially responded positively to Risher’s appointment, pushing the stock to his $10.14 mark shortly after the announcement. But positive reactions are short-lived. Lyft’s shares fell 11.4% from Tuesday’s high, and he closed at $8.98 on Wednesday.
Tom White, senior research analyst at DA Davidson, told TechCrunch that the $12.50 price target will remain company-neutral.
“We admit that this news came as a bit of a surprise to us, but it should show the relative underperformance of LYFT stock and Lyft’s core ridesharing business in recent quarters,” White said. I wouldn’t have,’ he said.
Lyft’s Q1 2023 earnings outlook is unchanged by Risher’s appointment, but analysts say Lyft’s target ($975 million) was lower than expected ($1.09 billion) I remember that.
Lyft attributes this decline in prospects to colder weather, which will lead to less ride-hailing use, shorter travel times, and a much lower use of micromobility. Because Lyft operates only in North America, it lacks the ability to balance lower ridership in some winter regions of the world with increased use in warmer regions of the world.
So far, Lyft’s strategy hasn’t had a glimmer of bright new products that could directly compete with Uber, but Risher has considerable motivation to turn the company around (i.e., do well). aside from the pride of his work).
“As part of his stock compensation, [new CEO John Risher] Ben Silverman, director of research at investment research management firm VerityData, said: “The vesting schedule is very different from the Founder’s Award Logan has received. [Green] and [John] 2021 and 2022 Zimmer will only vest if LYFT reaches or exceeds $100.00. Clearly, that ambitious view has been put to rest. Either way, Risher is in charge of a massive turnaround that could make him $980 million if fully successful. ”
