Recently, a major announcement came down from Lyft: The founders and head executives at Lyft, Logan Green, and John Zimmer, “stepped down” and Lyft appointed former Amazon executive David Risher as the new Chief Executive Officer.
My immediate reaction to this news:
- “How will this affect me as a driver?”
- “Is this guy coming in to prepare Lyft for sale?”
The bottom line is: We need at least two big players in the industry to keep Uber honest. Can you imagine how much less we would make if Uber were the only company offering drivers work? Yikes!
This article will provide some possible changes we may see at Lyft and predict how those changes could affect you and me.
Background: Why Did Lyft’s Founders Leave?
It’s big news when the founders of a company step down. As was the case when Travis Kalanek stepped down from Uber, the corporate environment was not good.
Typically, the founder(s) get to a point where the nature of the business has changed and matured, and someone with experience can better manage the operations. The same thing happened with Apple when John Scully, who had Pepsi experience, replaced Steve Jobs.
According to this article from Reuters, Lyft chose the new CEO to handle the competition from Uber and other rideshare companies.
Enter: David Risher, Newly Appointed CEO of Lyft
We’ll learn more about Risher’s philosophy over the coming months, but according to this article from the Seattle Times, Risher helped “build Amazon into an e-commerce powerhouse.” The article continues:
“Hired as Amazon’s 37th employee, Risher proved so instrumental to the Seattle company that when he left its founder, Jeff Bezos, posted a thank you note crediting Risher for helping to create a business that “is all about: working hard, having fun, making history.”
Before joining Lyft, Risher ran the nonprofit Worldreader, which “focused on helping young children to read.”
How Can David Risher and Lyft Compete with Uber?
As the new CEO of Lyft, David Risher faces the daunting task of taking on the ride-hailing industry’s heavyweight, Uber.
While Uber has enjoyed the lion’s share of the market, there are several steps Risher can take to make Lyft bigger and better than Uber.
Prioritize Safety and Trust
One of the first things Risher can do is prioritize safety and trust. One of the biggest challenges ride-hailing companies face is establishing trust with passengers.
By investing in safety measures and improving the screening process for drivers, Risher can help Lyft build a reputation as the safer alternative to Uber.
When I drove a taxi in San Francisco, the number one complaint I heard from passengers was, “I feel safer in a taxi!” During my career, Lyft has felt like more of an intimate club than Uber, which seemed to many passengers and me as an impersonal bulk transportation service.
Improve Customer Service
Along those same lines, another essential area Risher can focus on is customer service. While passengers and drivers alike have criticized Uber for its poor customer service, Risher can work to make Lyft’s customer service a differentiator.
Lyft can achieve this by providing customers with an easily accessible support system and timely responses to queries or complaints.
Exapand Lyft’s Reach
Risher can also focus on expanding Lyft’s reach. Uber has successfully expanded globally, and Risher can emulate this strategy by identifying new markets for Lyft’s services.
By entering new markets, Lyft can gain a larger market share and provide better access to transportation services for people in previously underserved areas.
In the interview above with Bloomberg, Risher was asked specifically about expanding outside North America. While Risher is deflecting answering that question for now, it seems unquestionable that Lyft will need to grow somehow and identify new markets – why not expand outside North America?
Forge Strategic Partnerships
Another way to increase Lyft’s market share is by forging strategic partnerships. For example, Risher can seek partnerships with companies in related industries, like hospitality, travel, and retail, to offer Lyft’s services as an added value to their customers.
Additionally, Lyft can partner with public transportation services to provide commuters with a more seamless transportation experience.
Innovation and Technology
Innovation and technology are the last and most important areas to focus on. Looking at David Risher’s accomplishments, this seems to be his forte.
The ride-hailing industry is constantly evolving, and Risher can work to ensure Lyft remains at the forefront of innovation.
This can be achieved by investing in emerging technologies like artificial intelligence and exploring new business models emphasizing efficiency, such as last-mile delivery services.
How Can David Risher Improve The Driver Experience?
Increase Driver Incentives and Rewards
One of the first things Risher can do to improve drivers’ experience is to increase driver incentives and rewards. If you want experienced drivers to drive for you, you must pay them more than Uber. Even though there is a glut of drivers due to our high inflation, my passengers still complain about high wait times.
In Sacramento, I drive for Uber primarily because they provide better bonuses. It’s simple; most drivers will drive for whichever company pays the most.
In the past, Uber and Lyft have been criticized for their low driver pay rates and the lack of benefits. Risher can work to address these concerns by introducing new incentives and rewards programs that will encourage drivers to stay with Lyft and provide better service to riders.
Of course, I am skeptical this will happen: in the Bloomberg interview, Risher notes that Lyft “needs to be competitive” on pricing, which typically means we drivers aren’t going to see any increases in earnings any time soon.
Introduce New Revenue Streams
Another potential impact of Risher’s leadership on drivers is the introduction of new revenue streams. Lyft has been exploring new business models, such as car-sharing and last-mile delivery services, which can provide drivers with additional earning opportunities.
By expanding into these new areas, Risher can provide drivers with a more diversified income stream, which can help them earn more and provide better financial stability.
Address Driver Concerns about Expenses
Risher can also work to address drivers’ concerns about expenses. Many drivers spend a significant portion of their earnings on expenses like gas, car maintenance, and insurance.
Risher can work to address these concerns by offering drivers access to discounted gas, maintenance, and insurance services.
Explore New Partnership Opportunities
Additionally, Risher can explore new partnership opportunities with companies that provide drivers with additional discounts on expenses, which can help them save money and earn more.
Implement New Technology
Another potential impact of Risher’s leadership on drivers is the implementation of new technologies. The ride-hailing industry is rapidly evolving, and Risher can work to ensure that Lyft leads the way.
By investing in emerging technologies that can reduce some expenses, thereby freeing up funds for drivers, Risher can keep his existing drivers while bringing new drivers over from Uber.
David Risher appears to build companies rather than prepare companies for sale. His background is in improving the profitability of technology companies. That is good news for drivers.
While further cutting driver pay could lead to greater profitability, that strategy has failed thus far, and Lyft has suffered. Uber pays me more in Sacramento, and therefore Uber gets my services.
The appointment of David Risher as the new CEO of Lyft has the potential to impact drivers and our income positively. He can work to introduce new incentives and rewards programs, provide drivers with access to new revenue streams, address drivers’ concerns about expenses, and invest in emerging technologies that can benefit drivers.
I am confident David Risher knows how to manage large organizations. However, he is up against the stiff competition.
Dara Khosrowshahi at Uber has proven to be a master of leadership. You only need to look at Uber’s performance under his tutelage. It’s pretty remarkable, given the shambles he inherited.
We can only hope that David Risher can come close to emulating Dara and Uber’s success. If he can, drivers like you and I can relax, take a deep breath, and enjoy our work without fear of the industry taking a hard turn.
We need Lyft to be successful. Good luck David Risher!