This week, I speak with David Risher, CEO of Lyft, about his career path from Microsoft and Amazon to leading the ride-sharing platform. We discuss Lyft’s financial turnaround, cost-cutting measures, and strategies for expanding market share. Plus customer-centric features, the mechanics of ride data, and the decade-long transition toward autonomous vehicle networks.
A transcript of our conversation is below; His current reading is “Apple in China: The Capture of the World’s Greatest Company” by Patrick McGee, and “Good People: A Novel” by Patmeena Sabit.”
You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube (video), YouTube (audio), and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Master’s in Business this weekend with McKeel Hagerty, CEO/Chairman of Hagerty Specialty Insurance. He transformed a family specialty-insurance agency into an enthusiast-driven platform focused on collectible cars, events, valuation data, and auctions. HGTY is now a public company that insures everything from classic cars to boats, trucks, tractors, and military vehicles for over 2.8M collectors.
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MASTERS IN BUSINESS An Interview with David Risher, CEO of Lyft
Hosted by Barry Ritholtz · Bloomberg Radio
ANNOUNCER (00:00:02): Bloomberg Audio Studios: podcasts, radio, news. This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
BARRY RITHOLTZ (00:00:16): This week on the podcast — man, was this a fascinating conversation. David Risher has been CEO of Lyft for the past three years; he’s been on the board for the past five years. What a fascinating discussion about a company that is probably an app on your phone, and you may not be aware of all the different things they do — from bike share, to autonomous vehicles, to fleet management, and everything in between. I thought this was absolutely fascinating, and I think you will also. With no further ado, my conversation with Lyft’s CEO, David Risher.
DAVID RISHER (00:00:55): Thank you, Barry. I am happy to be here.
BARRY RITHOLTZ (00:00:56): I’m thrilled to have you. Before we start talking about your technology background, I gotta roll a little further back: a bachelor’s in comparative literature from Princeton. That doesn’t sound like the sort of career plan for someone who’s gonna work his way through technology companies. What was the original idea?
DAVID RISHER (00:01:16): So this goes way back, and the funny thing is, it even goes to high school. My mother bought an Apple II computer a million years ago to help her run a small business, and I sort of got into technology that way. I will admit, part of it, I think, is I had terrible handwriting. And so when I used the computer to print out stuff for my high school English teacher, she could finally read what I was writing. It probably gave me a better grade as a result. So I sort of got into computers a little bit as a kid, ended up at Princeton, writing my thesis on a computer — again, this is a million years ago, when that wasn’t normal. And so I found myself just interested in technology, and after going to a consulting firm for a couple years to learn about the business world and going to business school, I found myself as an intern at Microsoft — again, back in 1990 — and the rest is sort of history.
BARRY RITHOLTZ (00:02:09): So, Harvard Business School — we know what that typically leads to. I’m curious how the humanities background helped shape the way you think about business, about leadership, about working with people. What was the upside of humanities for you?
DAVID RISHER (00:02:26): You know what, I really appreciate the question, and I actually think it’s more relevant now than ever. Look, the humanities is all about curiosity and understanding, and maybe even empathy, right? If you read a book, you have to understand — you’re exposed to different people’s perspectives. It’s almost like you’re crawling inside someone else’s brain, particularly if you’re reading fiction. And so, to a certain extent, I think nothing could prepare you better. Now, you have to have an analytical brain. You might also have to be good with numbers in business. But the humanities world — I sort of think of it as this kind of magic vaccination against irrelevance, because that curiosity is always gonna matter. And it certainly helped me through my whole career.
BARRY RITHOLTZ (00:03:05): I love that answer. So you intern at Microsoft. You end up beginning your career there, where you helped to launch their first database product, Access. Tell us about that.
DAVID RISHER (00:03:17): Sure. So Microsoft was famously ahead — or at least getting ahead, let’s say — with the launch of Windows, in word processing, in spreadsheets, of course. And again, this is sort of ancient business history, but it’s a fascinating tale of a technology shift, completely reshuffling the deck away from old companies like WordPerfect and Lotus 1-2-3. We don’t even know who those companies are anymore, because Microsoft took over that space. And it’s really because Windows shifted the platform — we might come back to that idea when we talk about autonomous cars. But they didn’t have a database, and that was sort of the third big product that a lot of companies wanted. I helped develop it; I was the first product manager on it. And really, all that meant is my job was to go around and watch other people use competing products at the time — Paradox, dBase, again, products that don’t even exist anymore — and try to pay attention to what they were doing with these products. How were they using them? Where were they stumbling? That was my first role. And in a sense, it has been one of the most important jobs I ever had, ’cause it’s what sort of taught me about understanding what customers want.
BARRY RITHOLTZ (00:04:17): Huh, interesting. And then you founded Microsoft Investor and launched that product. That is so far afield from databases. What led to that transition?
DAVID RISHER (00:04:29): Okay, so you’re making me realize that there’s a theme of my life I hadn’t really thought of before, which is platform shifts. So when I joined Microsoft, Windows was the product, right? This was the thing that was gonna run software, and of course it became incredibly successful. But then 1995, 1996, 1997 comes around — the internet is here. And Microsoft, like any tech company at the time, had to figure out its internet strategy. And it decided that there were a couple of key products that needed to be available on the World Wide Web. Actually, I think “the information superhighway” literally was the way people talked about it. It’s crazy. So —
BARRY RITHOLTZ (00:05:04): Cliché. It’s amazing.
DAVID RISHER (00:05:05): So cliché. But there it was — no one even knew how to talk about the thing. So anyway, I had been a little bit interested in personal finance, and a couple of threads came together. Microsoft tried to buy a company called Intuit — still very successful — and was unsuccessful, blocked because of the Justice Department. And so we decided we needed personal finance. And I said, you know what, why don’t we develop this product — a personal finance product — for the internet, not as packaged software.
BARRY RITHOLTZ (00:05:29): Huh. Really, really interesting. And then, staying with the theme of platform shifts: employee number 37 at Amazon. That is just an absolutely bonkers number. Senior VP of US retail — when you joined the firm, revenue was $15 million. You helped ramp that up to $4 billion. Obvious question: when you joined Amazon, did you have any idea what the behemoth it would become? Or was it still, hey, we’re hanging on by our fingernails and maybe this’ll work out — or anywhere in between?
DAVID RISHER (00:06:07): It was sort of both at the same time, and it was almost always gonna be one or the other, right? So I remember — I’ll tell you a little of the story of how I got there. My phone rings one day at Microsoft, and it’s this guy Jeff, and he’s doing a reference check of a woman who used to work, actually, at Microsoft in the personal finance group. So it all kind of connects. And so we get to talking, and one thing leads to another, and he is very precise about the way he’s asking questions. Remember, the company had maybe 10 people at this point. It was very, very small. But he had a big vision. You know, he was gonna be Earth’s biggest bookstore.
BARRY RITHOLTZ (00:06:42): At the time — wait, hold on, let me just stop you. When you say “this guy, Jeff” — this isn’t just some guy in HR. Jeff Bezos is calling you to do a background check on a potential hire.
DAVID RISHER (00:06:55): Exactly.
BARRY RITHOLTZ (00:06:56): So go on — Jeff calls.
DAVID RISHER (00:06:58): So Jeff calls me, and literally, at the time, he was just this guy, Jeff.
BARRY RITHOLTZ (00:07:02): “Hey David, some guy named Jeff on the phone. Pretty much a background check for an employee.” So what was that conversation like?
DAVID RISHER (00:07:09): Well, he had — to take you back then, but in a sense it’s still the Jeff of today — he had a plan, and it was a 25-question plan for the phone call, right? And to this day, the question I remember the most clearly was: “It’s very clear you are a fan of this person — give me an example of a job that she wouldn’t be a good fit for.” And it was such a clever question, because inevitably in background checks, you’re trying to say nice things about the person, right? But this is an invitation to say, well, you know, maybe a very detail-oriented job might not be the best fit. Or maybe something that manages a lot of people. It’s something like this that would give him some sense of where an area to probe more is. Anyway, at the end of that conversation — literally 45 minutes into it — he says, you know, you sound like a good guy. I said, oh, you sound like a good guy as well. And so a couple days later, he and MacKenzie, his wife at the time, and Jen, my wife currently still, and I went out to dinner, got to know each other, and over the course of the next year, got to know each other a little bit better. And then I ended up applying for this job to help Amazon grow beyond just books. That was really the job.
BARRY RITHOLTZ (00:08:16): And how’d that work out?
DAVID RISHER (00:08:18): It worked out pretty well. But you know what, it wasn’t obvious at the time. During the interview, I remember he said — look, if we play our cards right — and as you say, it was a $15.6 million store at the time, so tiny, tiny little thing — he said, if we play our cards right, maybe by the year 2000 — this is in 1996 — we might be a billion-dollar company. Maybe, maybe. But a lot has to go right in order for that to happen. Obviously we got there, and then we got, you know, far beyond. But there were all kinds of people who frankly were sort of rooting for our failure — competitors, Barnes & Noble at the time, a bunch of Wall Street analysts who thought this was just some sort of crazy Ponzi scheme, whatever.
BARRY RITHOLTZ (00:08:56): It was, “No one’s gonna buy anything on the internet. What are you guys doing? This is a dumb idea.”
DAVID RISHER (00:09:00): Totally, totally. Well, and not only that, but also: the costs are gonna be huge. You’re gonna have to build out these distribution centers and warehouses. The internet is unproven technology. All sorts of things that just —
BARRY RITHOLTZ (00:09:12): No one’s giving you a credit card over the internet, correct?
DAVID RISHER (00:09:14): Correct. Who’s gonna trust you?
BARRY RITHOLTZ (00:09:15): I remember getting an Amazon gift certificate from my college roommate — this was decades ago, right after Amazon formed. And the first time you go through the experience of buying something, it’s like, oh, this makes perfect sense. I don’t have to go to the store, I don’t have to waste time. This is great. I mean, there are certain stores that are fun to browse, but for the mundane sort of stuff, he was just decades ahead of everybody else.
DAVID RISHER (00:09:46): In that way — and in realizing that it’s really the customer experience and customer obsession that’s gonna drive your continued growth. Because all those things are true. And as he would say, famously, you’re always one click away from competition. So that’s the downside, right? How do you continue to compete in a world where theoretically someone else could start, and someone else could start, and someone else could start — and you don’t have any geographic advantage over them?
BARRY RITHOLTZ (00:10:09): And they kind of owned that space for the longest time. Really, it was only the pandemic, when people were outta things, that forced everybody: all right, now I have a Target account, now I have a Walmart account, now anybody else who could deliver. And what’s been surprising is how they’ve just powered right through. Hasn’t really slowed him down very much.
DAVID RISHER (00:10:27): That’s right. That’s right.
BARRY RITHOLTZ (00:10:31): So you go from Amazon — you kind of tap out a couple of years later. You teach at the University of Washington’s business school; you were elected Professor of the Year in 2004. And then you spend 13 years running Worldreader, a nonprofit dedicated to helping children learn to read in underserved communities. This is yet another pivot — platform shift, right? What was it? Just like, all right, I have my Microsoft stock came in, Amazon recovered from the dot-com implosion, that’s doing fine — I could just do something for fun? What was the thinking behind the shift?
DAVID RISHER (00:11:11): No, it wasn’t that, actually — it was sort of a different thing. So you asked me a couple questions ago what my career idea was as a kid. Honestly, if I had had to guess, I might have said, you know, maybe I’ll be an English professor someday, or something like that. I’d wanted to teach, and I loved reading. And so this was a way for me to bring together a couple of different things in my life — obviously books and literacy, ’cause that was sort of the passion and focus, but also technology. The thesis of the company was: kids are gonna read using tech. And that’s how it’s gotten to be — millions and millions of kids later are all reading on the platform. It started out with Kindle, a product I know something about because of my Amazon days, and brought sort of technology and reading together. So that was really the focus.
BARRY RITHOLTZ (00:11:53): And then what ultimately ended up bringing you back into the corporate sector, after a long time in academia and nonprofits?
DAVID RISHER (00:12:01): Yeah. So here it was — one day my phone rings, and a guy named Sean Aggarwal is on the other end of the line. Sean and I had worked together many years before, back at Amazon. He was my kind of finance partner. He had subsequently become an investor and then the board chair of Lyft. And he and John and Logan, the co-founders of Lyft, really were looking to do something quite unusual at the board level, which was: bring someone in who is a real customer advocate. So boards — for those of you who haven’t gotten a chance to be exposed to a board — typically are made up of kind of finance people, business strategists, maybe people who’ve built companies before. But often, by the time you get to sort of the board level of a company, you’re pretty far away from the customer. And John and Logan, again to their credit, said, you know what? We need some more customer advocacy right from the top. We need some more support, frankly, for that kind of vibe, as well as someone who’d helped scale a company like Amazon. You know, I also learned a lot about competing at Microsoft, and even at Worldreader — nonprofits, people sort of look at them and think they’re not very much, but it’s very, very difficult to actually scale a nonprofit, because the funding is always tight and so forth. So I think they were looking for someone with a combination of scaling experience but also real customer advocacy. And so I joined the board as a result.
BARRY RITHOLTZ (00:13:18): And then eventually, a couple of years later, you get offered the role of CEO. What was that like? How did that come about? Infrequently do board members become CEOs.
DAVID RISHER (00:13:36): So, funnily enough — and this one I’ll sort of slow the story down again, because it actually was Sean Aggarwal again, same board chair — he calls me up. It happened to be on Valentine’s Day, of all days, so I remember the day, in 2023. And the backstory here is John and Logan, again, the co-founders of Lyft — this is what they had been doing for 15 years nonstop. It was literally their first job outta college: founding this whole new company, withstanding the onslaught of an incredibly competitive environment, an incredibly operationally complex environment, 24 hours a day, seven days a week, for year after year. So at the end of the prior year, they said to the board, you know what, it’s time for us to move on. We’ve sort of done what we need to do. And frankly, the company was going through a bit of a tough time financially and operationally, and I think they realized that they were sort of getting to the end of where they could really help. So the board did what it does — boards do this — they form a special committee, they start to recruit, look around. I wasn’t on the committee; I was sort of watching from the side. But, as they say, then my phone rings one day, and it’s Sean on the phone with John and Logan, and they basically say: you know what we’ve been thinking? As we’ve been looking at external people, frankly, we think we might have the right person to at least apply for the job — let’s be clear, apply for the job — sitting right here, you know, on the board. And I said, what are you talking about? They said, we’re talking about you, David. I said, absolutely not.
BARRY RITHOLTZ (00:14:56): Really — your first reaction was, hey, thanks, but no thanks?
DAVID RISHER (00:14:58): Zero percent chance. I literally said, you should hang up the phone right now, because you’ve got better things to do. There’s just no way. But you know what? As the day wore on, I found myself saying, you know what, this is a really interesting opportunity. How many people get this opportunity? To run a — and I’d never run a public company before. I mean, my God. But at the same time, I had learned some things at Microsoft. I’d learned some things at Amazon. I learned some things at Worldreader. I learned some things in various different ways in my life. And I had a lot of passion for the company, having been on the board — and also a real understanding that as a board member, you really only have so much power and influence. It’s fairly limited. But as a CEO, it’s a different thing. So anyway, one thing led to another. I applied, and went through kind of a harrowing experience, but ended up getting the job.
BARRY RITHOLTZ (00:15:40): Huh — really, really fascinating. So, we mentioned earlier: you joined the board in 2021, you’re named CEO in 2023. When you joined the company, they were still reeling from the pandemic and all the factors that drove the company — losing not only money, but also losing market share to their big competitor, Uber. What did you find when you looked under the hood? What surprises were awaiting you as CEO?
DAVID RISHER (00:16:11): So the first, maybe, meta-observation — and you’re teeing it up — is: gosh, you’re on the board of a company for a couple years, you kind of think you know the company. You don’t really know the company. I mean, if any board members are out there, you think you do, and you probably have a pretty good sense of certain things, but you get in there and everything is 10 times bigger, worse, better — all the things. Then you realize: okay, what did I see? I saw a company that had some real innovative spirit at its core. Remember, Lyft was actually the one that really revolutionized rideshare. So the other guys, they came up with a sort of black-car concept — you know, black car on an app — but it was really Lyft that said, you know what, it can be anyone with a Prius. You know what I mean? Anyone can pick up. So this company had innovated from the early days, but honestly, its innovative spirit had maybe gotten a little the best of it. Tried a few too many things, spread a little too thin, losing share. And its core business, as you say — not priced well, not paying competitively. So a number of different, just basic issues. So what do we do the first, frankly, couple of weeks? Well, first thing is lower prices. We were just priced too high.
BARRY RITHOLTZ (00:17:15): Did you do big announcements around that? Because I don’t — 2023 is still kind of a blur to me.
DAVID RISHER (00:17:20): So we didn’t, and here’s why. In order to withstand a price drop — because it’s a very competitive business and you’re doing a lot of volume — if you drop your price, you gotta make sure you can pay for it. We had to do some other things as well. So, for example, we had to reduce our costs significantly. So we laid off — it was about a third of the company. And yeah, 26%, actually, of the company, now I think about it.
BARRY RITHOLTZ (00:17:41): Wow.
DAVID RISHER (00:17:45): $330 million of savings. That was a very, very significant shock to the company, by the way. We also had to raise driver pay. So we had a lot to pay for.
BARRY RITHOLTZ (00:17:53): So wait — you’re simultaneously lowering prices for Lyft riders and yet bumping up pay for drivers. That sounds like that’s gonna cause a big problem for profits.
DAVID RISHER (00:18:03): So that’s exactly right. So in order to pay for it, you have to figure out how to pay for it. And frankly, our cost structure was just sort of outta control. We were doing too many things. We had too many people — and by the way, those people were all working remotely, which makes it quite difficult to really kind of change the culture to a customer-obsessed culture, which was my other big thing. And by the way, we were also overpaying in stock-based compensation, which was bugging investors. So in the first couple of months, it wasn’t really the time to be bragging. It was the time, frankly, to be saying, okay, we’ve got some things to fix, and let’s really focus on that. So first — call it thirty, sixty, ninety days — it’s fixing some basics, but also reorienting the company back towards its customer-obsessed roots. And I’m still very — I guess I’d say proud of this: the first meeting I had of the day was literally getting my computer and my laptop, and the second meeting, 10 o’clock in the morning, Monday morning, I said, let’s start talking about a product that’s now called Women+ Connect — trying to get women drivers and women riders —
BARRY RITHOLTZ (00:19:02): Such a great idea, especially given the mayhem across the street from you.
DAVID RISHER (00:19:06): I appreciate you saying that. And it really matters. And this is something the company —
BARRY RITHOLTZ (00:19:11): And I’m sorry to interrupt, please — it’s very visible on the app, that choice, which shows some thoughtfulness. And, oh, there’s this problem — how about we send a woman driver for you, and you don’t have to worry about what you’re hearing about elsewhere. Exactly. It just makes so much sense.
DAVID RISHER (00:19:28): I really appreciate you saying that. It was an easy decision in that sense. All you have to do is talk to 10 women and say, well, what are you thinking? And they say, well, gosh, particularly late at night, maybe in a new city, maybe I’ve had a long day — it’s just not my jam to be talking to a dude. Right? It’s all right, dudes, you know — like that. But sometimes the easiest ideas are also the most complicated. There are all sorts of potential legal issues, all sorts of operational issues. There are even, to a certain extent, cultural issues of, like, is this gonna be okay? But I was like, you know what? I think it’s gonna be okay. I think it’s gonna be okay. So that was an early decision we made. It came out — that was in April of 2023 — we launched that later that year. And it was really exciting for the company to say, you know what, we can do big things again, and we can start to innovate again on behalf of customers.
BARRY RITHOLTZ (00:20:09): Huh — kind of fascinating. Coming up: we continue our conversation with David Risher, CEO of Lyft, discussing the future of rideshare technology. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
BARRY RITHOLTZ (00:20:21): I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My special guest this week is David Risher. He is the CEO of Lyft, one of North America’s largest and fastest-growing ride-sharing networks. So over the next year or so, you return Lyft to profitability. In the most recent reported quarter — first quarter 2026 — over 28 million active riders, nearly $5 billion in gross bookings, $1.7 billion in revenues, just about $133 million in EBITDA profits. So the combination of restructuring the company, attracting — paying more — drivers, and discounting prices for riders puts you on the right foot. How do you build on that? What’s the next step to maintain that momentum?
DAVID RISHER (00:21:25): Well, so in some sense, nothing changes, and in some sense, everything changes, okay? So what doesn’t change: customer obsession is still driving profitable growth. That’s just gonna be a theme I go with forever. You know, maybe I’ve drunk a lot of the Jeff Bezos Kool-Aid, but it seems to be working out pretty well. So one other financial metric that has been interesting to watch: when I joined, we were losing about $300 million — consuming about $300 million in cash — over 12 months. We’re now generating about $1.1 billion in cash over 12 months.
BARRY RITHOLTZ (00:21:53): Okay. So what that allows you to do is invest in the future. What does that look like?
DAVID RISHER (00:21:58): Certainly it looks like international expansion. So that’s been one thing we’ve been at for about the last year. Lyft was sort of — I almost say caught a little bit in a US-centric view of the world. And it just doesn’t make sense: once you have a product that scales really well, and is sort of a fixed-cost-based type of thing, you really want it to be around as much of the world as possible, so you can run as much volume through that platform as possible. So we bought a company called FREENOW last year. It’s a European taxi aggregator —
BARRY RITHOLTZ (00:22:28): FREENOW?
DAVID RISHER (00:22:29): FREENOW. Yeah. It is Europe’s biggest taxi aggregator, which means that if you want a taxi and you’re in a place like Barcelona or London — pick your favorite city; they operate in nine countries — the FREENOW app is gonna be your best way to get it. That gives us a great platform for expansion, even when it comes to autonomous vehicles — we’ll come back to that, I’m sure, in a couple seconds. So that’s one direction of expansion. You think of that as out — overseas. Another dimension is up — upmarket. You just kind of referred to this. So Lyft, again — it sort of started, its tradition was, as kind of a relatively inexpensive, very available rideshare option, but it wasn’t as strong in kind of the black, you know, kind of luxury segment. We bought a company called TBR last year. TBR is a high-end chauffeur company. We also have a very, very good Lyft Black product. In fact, if you’re listening to this, I promise: if you haven’t tried it, give it a try. I think you’ll like it. It’s actually our highest-rated product. You know, a nice black car comes and picks you up. So that’s another area of expansion for us, because that gives us, frankly, more margin to play with, but it also allows us to talk to a segment that we haven’t talked to very much. And then, of course, autonomous vehicles. So these are all nice uses of cash. Once you’re generating cash, you can start to either acquire companies, or you can invest in things that then grow — build sort of the next chapter of growth.
BARRY RITHOLTZ (00:23:44): So I appreciate you mentioning the various tiers. There’s this tendency to think of the consumer — especially the American consumer — as one thing, but we both know that’s not true. You get to crunch a whole lot of data. What are you seeing in terms of income, geography, various times of day? Like, what do the metrics tell you about the different flavors of consumers using Lyft?
DAVID RISHER (00:24:11): Yeah, this is such an interesting issue, and it’s not something I really appreciated. You know, we are gonna do about a billion rides this year, and so, to your point, with a billion rides, you kind of get a sense of how people are spending their time during the day. So I’ll tell you two things that are growing quite quickly. One is party time. And it might be funny to start there, but party time — I should say what that means. What that means is a Thursday night, really Friday night and Saturday night, call it nine and midnight. And it is really interesting — I think this is not just post-COVID, but I think, frankly, a little bit of app fatigue is driving people to say, you know what? Let’s actually get out and spend our lives out in the real world, instead of spending all of our lives on apps. So I think that’s — actually, I’m quite comforted by that. And it’s actually a big part of our sort of overall purpose, which is to serve and connect people. I’m a lot passionate about that. At the same time, commute as well. And I do think this is a certain post-COVID thing, where people were sort of thinking, maybe we’ll just be in our houses the rest of our life, working remotely. It turns out a lot of companies and a lot of people are saying, I wanna get back to work. And I think these things are somewhat connected — and sorry for sounding a little bit like a social psychologist a little bit, but I mean, gosh, I met my wife at Microsoft. A lot of people have really significant life events that happen at work that are not just work, right? And so I think there’s a little bit of that. So anyway, when I look at things like commute hours — and then travel continues to be really strong as well. And this is — look, I’m a million years old now. When I was a kid, the idea of getting on a plane and going overseas — I mean, you might as well say go to the moon. Now, 20- and 30-year-olds are like, yeah, I’ll sort of take a trip overseas, or I’ll go to, you know, whatever — Nashville for the weekend, or something. So anyway, I think these are pretty big, real societal shifts, as people want to kind of be out in the real world.
BARRY RITHOLTZ (00:25:51): I’m kind of fascinated by the idea of party time, ’cause pre ride apps, there was always the question: all right, I’ve had two, I guess I’m driving tonight, so I gotta stop here. But if you’re out on party night and you know you’re taking a car home, you are not afraid about having a second or third drink. You can kind of relax a little bit. Getting pulled over is not a problem if you’re in somebody else’s Lyft.
DAVID RISHER (00:26:19): It’s exactly right. So again, if you zoom out — you know, Wall Street looks at companies like ours quarter by quarter, and it sort of drives you crazy. But if you zoom way, way out, let’s look at that from a different dimension. Now, average car right now: 50,000 bucks. Okay? Average monthly payment: 800 bucks. Insurance will cost you another couple hundred bucks. Gas might cost you another hundred bucks or so, at least now. And then service will cost a little bit more than that. Okay? So that’s plan A. And by the way, if you take on all that responsibility, there’s no texting and there’s no drinking. You know what I mean? Now, plan B: pay 20 bucks getting a Lyft. Someone else does the driving. Text to your heart’s content, drink as much as you want — if that’s your jam. And it’s 20 bucks, not 800 bucks times, you know, plus, plus, plus. So just looking out — again, you’re sort of asking about kind of segments, and sort of, maybe, a little bit, the role of technology in society. I still think we’re actually at the beginning stages of a lot of these changes. And sometimes, again, people who have been around for a while don’t even realize how much the world has changed in that way.
BARRY RITHOLTZ (00:27:21): Yeah. Fascinating data point I saw — it was actually a couple of years ago — the number of kids under 19 that haven’t gotten a driver’s license. When I was growing up, you couldn’t wait to get your driver’s license, ’cause that meant freedom. There wasn’t an internet. There were three channels, plus some people started getting cable. Like, it was a very different world back then. That’s right. And now it’s like, yeah, maybe I’ll get a license, maybe I won’t. How do you think about marketing to that demographic?
DAVID RISHER (00:27:51): Well, so one of the things I learned from Jeff — again, who’s, as you can imagine, quite an influential boss for me — is: build your businesses on things that don’t tend to change. Not things that are sort of ephemeral. So what are some things that aren’t gonna change? Okay — again, people are gonna want to get out, either to the doctor or to go to a bar. So that’s a good bet. People are also gonna want to save money. And so a lot of our focus right now — and you’re gonna start to see a lot of marketing around this — is: save money, check Lyft. Now, I wanna be super clear here. It’s not — if I look at the competitor — that we always have a better price. Of course we try to, but we don’t always; sometimes, you know, all sorts of things happen. But over time, if you check both apps, you’re gonna save some money. And certainly, compared to buying a car of your own and dealing with all the maintenance, you’re gonna save some money. So it’s not the only thing I wanna say, but I actually think it’s an important thing to say — particularly in a world of sort of some economic instability — this is a good way for you to save some money. And frankly, I’m proud of our cost position, and I’m proud of our ability to offer a great price every single day, you know, a billion times a year.
BARRY RITHOLTZ (00:28:54): So let’s talk about you versus your competitor. Lyft has always been framed as sort of the underdog to Uber. Is this kind of a Coke and Pepsi story? What are the advantages of being number two? Remember the old — was it Avis? We’re number two, we have to try harder.
DAVID RISHER (00:29:13): Absolutely. So I like being number two, and it’s maybe a funny thing to say, but I do think it means you try harder. You wake up every single morning and you say, I got one job, which is to, frankly, do a great job for my riders and my drivers, such that maybe over time I can overtake the other guys. I guess the way to think about that is: I think the right number of rideshare companies in most markets is probably two. It’s a capital-intensive business — not because you own the cars, but because you own a lot of server capacity, and it’s quite complicated to figure out pickup and drop-off locations, and customer service — people leave their phones in the car about 8,000 times a week. It’s just all sorts of —
BARRY RITHOLTZ (00:29:56): Especially Friday party night.
DAVID RISHER (00:29:58): Right — and there you go. It all kind of comes together. There is something to that. And by the way, we have really cool innovation coming out there — we’ll bring your phone back to you automatically. But that’s a separate story. But anyway, so in a funny way, it’s not a bad thing to be in sort of a two-player position, ’cause you really only have one competitor. And frankly, if you spend too much of your time thinking about that one competitor, you’re probably losing the script. Because guess what? There are a lot of rides that people aren’t even taking on rideshare at all. Okay? So, you know, back to this question — we’re a customer-obsessed company, and this is gonna be the thing. This is why we’re growing, you know, mid double digits — 15 to 20% year on year. It’s why we’ve become profitable. It’s why we’re spinning off cash. And I think that is a good place to be. Particularly when I look at the other guys, who I tend to think of, frankly, as more — I’ll call them sort of financially and maybe technologically driven. Maybe — I don’t know exactly how they describe themselves — but I don’t get the customer-obsessed vibe.
BARRY RITHOLTZ (00:30:52): Huh — so that’s kind of interesting. Let’s talk about an example where there’s no customer-obsessed vibe. So I use Lyft, I use Uber. It feels like on Uber, the way it measures time is sort of an alternative reality. Hey, we’ll find a driver in three minutes — it takes nine minutes. Hey, the car will be here in 11 minutes — it’s there in 23 minutes. Like, the app is very full of BS. It consistently lies. I’m curious: is it just a logistical issue that everybody has to deal with? Or — and we know a lot about the history and culture of your biggest competitor — is this a culture problem? You know, their history has a lot of bad behavior, a lot of, let’s just call it questionable legality. I wouldn’t go so far as to say fraud, but they did a lot of bad things. Does that show up in how the app behaves? Or is this just, no, Google Maps is tough to work with, this is a logistical challenge?
DAVID RISHER (00:32:00): No, it is a logistical challenge. But — look, I’m not gonna characterize you; you did a marvelous job characterizing them. Skirting —
BARRY RITHOLTZ (00:32:09): I got nothing — no liability for slander there.
DAVID RISHER (00:32:12): There we go. Fantastic. Exactly. So Barry’s got a whole second — hold on, well, you were a lawyer, right?
BARRY RITHOLTZ (00:32:16): Yes, that’s correct.
DAVID RISHER (00:32:17): Oh, there we go.
BARRY RITHOLTZ (00:32:18): Okay, but I’m recovered, so —
DAVID RISHER (00:32:20): It’s not the same. I understand — recovered lawyer — but you did just hear a lawyer very carefully parse his words. Okay, listen, I won’t comment on that. What I will say is: we are very focused — for example, you’re talking about reliability. Oh my goodness. You talk to my team, and they will — they roll their eyes, maybe, would be one way to say it. But the number of times I talk about reliability internally is high, because I am obsessed by saying: if we’re gonna make a promise, we’re gonna meet the promise. And starting in a couple weeks, we’re actually starting to do some more work to actually surface that promise, even a little bit more visibly. We do it today for airport pickups. If we’re more than 10 minutes late for an airport pickup, we pay you up to a hundred bucks, no questions asked.
BARRY RITHOLTZ (00:32:54): Really?
DAVID RISHER (00:32:55): Yep. And we rarely have to do that. Our reliability rate is above 99% for scheduled airport pickups.
BARRY RITHOLTZ (00:32:58): Wow.
DAVID RISHER (00:33:00): So we’re very, very focused on that. You know, I will say — look, at business school, there’s a very famous class which has a weird technical name, but it’s basically about incentives and behavior —
BARRY RITHOLTZ (00:33:13): What’s the name of the class?
DAVID RISHER (00:33:15): So I was in school a long time ago — I think it’s called CCMO, and I don’t even remember what it stands for anymore. It’s probably called something different today. But it really is about how incentives drive behavior — financial incentives and other incentives, and incentive alignment, and so forth and so on. There is an incentive in the sort of on-demand app world not always to be truthful. Because if you overpromise something, and then you kind of hook a person in — what are they gonna do? If they cancel or whatever, it’s just gonna take them more time. And that is an evil and pernicious problem that is kind of baked into the model. And we just reject it wholeheartedly. Doesn’t mean we never make a mistake. But if your car shows up later than we estimated, it’s because we made a mistake, and we are trying over and over and over and over again to eliminate those — they’re defects — and then start to guarantee it over time.
BARRY RITHOLTZ (00:34:13): So you are crunching a lot of numbers; you’re seeing a lot of data in real time. I’m kind of fascinated by the concept of what, at Lyft HQ, the dashboard looks like. What sort of data are you watching constantly? What’s the most surprising set of numbers or charts that come across that?
DAVID RISHER (00:34:34): Yeah, this is a great question. I mean, so the answer, first — just to validate the premise — is: absolutely, an enormous amount of real-time data. You know, two to three million rides every single day, and now worldwide. So we’re very active, and in fact, we have whole cool maps that show simulations of behavior, particularly around storms and all sorts of crazy times. Anyway, back to your question. Look, there are a couple of metrics that I think might surprise you that we pay as much attention to as we do. And I’ll give you a very specific one, ’cause it kind of helps tell the story. When I joined, about 15% of the time, drivers would cancel on you. Now, this is infuriating.
BARRY RITHOLTZ (00:35:08): Really? That high? I mean, every now and then on your competitor I’ll see a cancellation, but typically it’s rush hour. Someone’s stuck on the other side of the city; they’re not gonna make it. So rather than get that ding, they just cancel and find someone by them.
DAVID RISHER (00:35:24): So in today’s world, it is less than 4.5% on our app. So we’ve brought it down by a factor of —
BARRY RITHOLTZ (00:35:31): Three.
DAVID RISHER (00:35:31): Yeah, exactly — slightly less than that, actually, but around that. So how have we done that? Well, it’s not just that they’re on the other side of town. It’s maybe we didn’t give them enough information right up front — so, for example, how much they’re gonna make, or what neighborhood they’re gonna drop you off in, maybe. And by “not enough information” — maybe we gave it to ’em, but the font was a little bit too small for them to see it. Right? Or maybe it wasn’t on the screen quite long enough. Or maybe we gave you a ride that we didn’t know was very, very unlikely for you to want, because of your past history or whatever. So now we spend a lot of energy — and we’ve just been grinding away this year, after year, after year, because it’s so infuriating to riders. That’s an example of a sort of specific metric that we’re looking at, you know, by the day.
BARRY RITHOLTZ (00:36:23): Huh — really, really interesting. Two kind of related questions to the growth of Lyft. Your last quarter’s earnings call, you said — or maybe it was a previous one — 27% of North American rides are linked to a corporate partnership. Chase, DoorDash, United, Hilton, et cetera. What is that strategy? Is that about customer acquisition? Margin? Like, what goes into those sort of big partnerships?
DAVID RISHER (00:36:51): Sure. So, you know, as you say, we have tens of millions of people who use our service every quarter — it’s about 50 million a year. And again, this is back to sort of the Amazon philosophy: you gotta compete for those customers, right? You gotta compete because, you know, they have alternatives. And in fact, there’s another company out there that some people know. Okay? So one of the ways you compete is you say, gosh, it’s not just about the ride — it’s about the relationship. And maybe it’s a relationship you already have with another company. So you mentioned United Airlines. United Airlines has now been a partner of ours for about the last six months. It’s been a wonderful partnership already, because the United Airlines MileagePlus program is incredibly well built out. People are very, very loyal to it. What can you do on Lyft? You can now earn miles so that you can take a vacation —
BARRY RITHOLTZ (00:37:38): Same with Hilton Honors.
DAVID RISHER (00:37:39): And same with Hilton Honors — exactly right there. We’ve been a partner for many, many years. The big innovation on the MileagePlus side is you can actually spend your miles on Lyft as well, which almost feels like free rides, right? That’s right — it’s just like, you get, you know, 200 miles or 500 miles, whatever, for taking an airline trip, and you spend a small segment of those on a Lyft ride. So these partnerships — you sort of asked what the method behind it is — it’s about customer acquisition, for sure, but it’s also about customer retention, you know? ‘Cause if you’re in the United ecosystem, or on the DoorDash side, or Hilton, or Alaska Airlines, or Chase — built primarily here in New York City and other cities where they’re active — and you want to either earn or burn miles or points, we’re a great place to do that.
BARRY RITHOLTZ (00:38:22): Really, really kind of interesting. I read an article from Reuters: smaller US markets and college towns have been meaningful growth drivers. Curious why those markets were underpenetrated. What did you guys figure out there?
DAVID RISHER (00:38:37): So part of it — there has been just a little bit of, you might say, neglect from the rideshare business for a while. And we realized about 18 months ago that a large part of the TAM — just to frame this again, total —
BARRY RITHOLTZ (00:38:51): Addressable market.
DAVID RISHER (00:38:52): Exactly — is more market. About 160 billion rides a year that people take in their private cars across the United States. 160 billion. And remember, we do a billion; the other guys might do three or four billion — maybe two or three billion. So four billion outta 160 billion. Okay? So there’s a lot of addressable market left for us to go to. And we’ve been in places like New York and San Francisco and Chicago for over a decade right now. But some of these smaller towns — the Indianapolises of the world, the St. Louises of the world — as well as college towns, where basically nobody has a car compared to the population, they just look like good opportunities for us. They’re complicated from a marketplace-management perspective, because anytime you go to a newer geography, you’ve got to first make sure you’ve got enough drivers, ’cause otherwise it takes too long to get picked up. And you’ve gotta make sure you’ve got enough riders, because if not, then drivers won’t make enough money. So it’s quite complex to —
BARRY RITHOLTZ (00:39:41): Invest. There’s a chicken-and-egg problem there.
DAVID RISHER (00:39:43): It is a chicken-and-egg problem, over and over again. Which, again, is why — back to the earlier part of the conversation — it’s really quite hard at this point to come into the market fresh. You know, you’re not gonna find a lot of folks who want to come into a well-served market. But anyway, so we just started to focus on it, and our data scientists and our marketers really kind of went to town, and it’s been a big source of growth.
BARRY RITHOLTZ (00:40:03): Huh. Really, really interesting. Coming up: we continue our conversation with David Risher, CEO of Lyft, discussing the future of transportation technology. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
BARRY RITHOLTZ (00:40:31): You are listening to Masters in Business on Bloomberg Radio. My extra special, fascinating guest is David Risher. He is the CEO of Lyft, and we have been discussing the future of transportation technology. We have to talk about AI; we have to talk about autonomous vehicles. But before we do, I have to ask you two really interesting questions. One is: how do you solve the problem of even sober people leaving their phones in the car when they get out? And suddenly it’s a big pain in the ass — somebody has to come either drop off the phone or whatever. How do you, as a customer-obsessed company, how do you solve that problem?
DAVID RISHER (00:41:16): I so love this question, because it is an experience every single one of us has had, and it is both infuriating and incredibly stressful. Because all of a sudden you realize, oh my God, my entire life is driving in the wrong direction, and I don’t even know how to contact the company at this point.
BARRY RITHOLTZ (00:41:30): Because the number is on your phone —
DAVID RISHER (00:41:33): And the phone is in the car, and you’re like, I wanna hold my phone to call the phone — but I can’t do that. It’s very, very stressful. So here’s what we’ve done. We’re doing a huge amount of work on this, just to be really customer obsessed. The first thing is automatic detection. So if the phone starts to travel away with a driver after you’ve been dropped off, that immediately, automatically alerts the driver: there’s probably a phone in your backseat. It requires a little bit of work on the rider’s side — we’re still trying to figure out how to get riders to opt into this, because they have to share a little bit more information. But we’re still working on that. But regardless of whether it happens automatically or manually, the second thing is: we’ve got a whole web portal, so you don’t actually have to use your phone. You can — and you don’t have to log in. But really, the big innovation is this — we wanted to have it sort of out of band — so the whole “return the phone” thing becomes almost a separate process. And frankly, in the past, it’s almost felt like a bit of a negotiation with the driver, and nobody liked it. The drivers didn’t like it, ’cause it felt like it was sort of an annoyance. The riders didn’t like it, because they’re like, oh my God, I sort of feel like I’m being held hostage here. A terrible thing. Now it’s a whole automated process. And basically, what we realized is: we should just treat it like any other ride. So it’s basically — the phone is getting a ride back. So what you get to say as a rider is: yes, please bring my phone back. I know exactly how much it’s gonna cost — it’s gonna cost just the exact same amount as if I’d taken a ride to that exact place where the phone is. And the driver gets it in their queue just like they would get any other ride request. And it gets returned to you. Typically — I was just looking at this data, and it changes every single week — but we’re now getting to the point where a large percentage of riders’ phones are being delivered back within an hour, which is the absolute gold standard.
BARRY RITHOLTZ (00:43:09): So let’s use technology and cut that: on the app, opt in to avoid leaving your phone in the car, via Bluetooth. Not on each ride — just once, on the app. And then when the ride is over — you’ve arrived and the person gets out — if the phone doesn’t leave the car, right there and then, the driver should lower the window and say, hey, you left your phone in the backseat. And that doesn’t seem like you’re changing or creating new technology. That’s right — you’re just applying existing technology. Why take an hour? Why not take 30 seconds?
DAVID RISHER (00:43:48): A hundred percent. And this is now where you realize that all technology problems are ultimately human problems. Because in order for that to happen, a person has to have opted in — they’ve gotta click a button. Most people are either skeptical of that, or they’re not paying attention. So now our trick is to try to figure out a way to really encourage people to do that. As you say, you only have to do it once. But that’s gonna be the next big focus.
BARRY RITHOLTZ (00:44:09): So let’s stay with that theme before we really move too far away from people and towards technology. You drive for Lyft every six weeks or so, which seems kind of bonkers. What have you learned sitting in that seat that you can’t learn from the executive suite or the boardroom?
DAVID RISHER (00:44:28): So much. So much. And, you know, I know we’re all busy people — here I am, busy senior executive, CEO of a company. My God, you know what? I got time, right? I got time — I can jump in the car. And here’s why: I learned stuff about being a driver, and I learned something about being a rider, every single time. So I’ll give you an example of each. Very quickly, on the driver’s side, I learned how important a feature is that we’ve developed over years and refined, called Stay Within Area. And there are actually two features next to each other — one’s Stay Within Area, one’s Arrive On Time. Lemme actually focus on Arrive On Time. What that means is: I’ve got a kid to pick up at the end of the day, or I’ve got a date with my wife tonight, or I’ve got a doctor’s appointment at three o’clock in the afternoon. And so I need to figure out a way to organize my life such that my last ride is gonna put me, you know, right where I need to be by a certain time. If I look at the gig economy, one of the real gifts of the gig economy is it allows you to integrate your work into your life in new ways. Again, I don’t have to call my boss and tell ’em I’m gonna be late today. I don’t have to do anything like that. But sometimes I do have other things in my life. Maybe it’s another job; maybe it’s an obligation with my parents — or whatever it might be. So anyway, that’s a feature. It worked pretty well when I started. It works very well now — and in part, it’s because I give a lot of feedback to the team on how to make that better and how important it is to get that exactly right. And then on the rider’s side — I mean, every time I take a rider in the car, of course I ask them why they chose us versus the other guys. Sometimes it’s because they say, oh, Chase Sapphire Reserve — I’m a Chase Sapphire Reserve cardholder, and you guys have a relationship with them. That’s great. That gives me a little bit of data of how important that is.
BARRY RITHOLTZ (00:46:03): That’s a points relationship.
DAVID RISHER (00:46:05): It’s a points relationship — and you get all sorts of — you get $10 every single month to use as Lyft credit. And look, I can look at the data just like anyone else and realize the number of people who are using that. But there’s just no substitute for hearing somebody, you know, go off about how much they love that card, and how important that partnership is to them. That’s a generic example. And then a specific example involved a woman that I gave a ride to — this is now about almost two years ago, but it’s still really, you know, kind of resonates with me — where she would wake up every single morning, and depending on what the price was of getting from her home to her job — because the prices would bounce around a lot — she would either take a Lyft, or maybe take the other guys, or drive herself, or stay home. And it was a source of stress and concern to her every single day. She would literally wake up an hour, you know, before she had to leave, just to sort of check prices. And it just made me realize how much surge pricing is customer hostile.
BARRY RITHOLTZ (00:46:59): Nobody likes it. Nobody likes it. It starts to drizzle a little bit, and suddenly it’s a $30 surcharge. And I know people are infuriated by it.
DAVID RISHER (00:47:07): And they should be. And here’s the problem. This is the difference between — you know, if you’re an economist, you love this, right? It’s, oh, supply-demand balancing in real time — it’s just unbelievable. Like a perfect science experiment. And if you’re a real person, it just bugs the crap outta you. So it really drove home to me how frustrating this was. And it was literally a Friday morning where this woman had donuts, and she was bringing them in to see a coworker for his birthday. And she’s like, I can’t work from home today — I’m so glad that Lyft was reasonably priced. So that’s what’s led us to take about $50 million a year out of surge pricing. We’ve really tried to get rid of it as much as we can — can’t completely eliminate it — and also introduce a product called Price Lock that allows you to lock in a price on a route.
BARRY RITHOLTZ (00:47:47): So tell us a little bit about Price Lock. What does that do? I’m not familiar with that aspect of the app.
DAVID RISHER (00:47:54): Yep. So it’s really meant for people who commute the same route every day, and they don’t want the route to go from 20 to 30 to 40 bucks ’cause, you know, say it rained. And by the way, to be very clear, there are good reasons for surge pricing, right? It’s a very good way for us to encourage drivers to drive when there’s more demand than their supply. But because it’s very frustrating for riders, we wanna give people a way to kind of opt out of it. So for a given route — you know, from point A to point B — if you wanna lock in a price, we basically say, here’s the average price over the course of a month. If you wanna lock in, I think it costs $4.99 a month per route. That’s all it takes. And it’s been super popular for people who just want to get that outta their lives.
BARRY RITHOLTZ (00:48:28): Huh. Really, really kind of interesting. So let’s talk a little bit about autonomous driving. I was in San Francisco last month — Waymos everywhere. Tell us a little bit about what Lyft wants to do with autonomous vehicles. Are these just shiny objects, or are these the future?
DAVID RISHER (00:48:48): They’re the future. They’re the future. It will take a long time for this future to come; it will be very unevenly distributed. But they are the future. And the basic reason why is: they are a reliable product, and they’re a safe product —
BARRY RITHOLTZ (00:49:01): Safer than human drivers.
DAVID RISHER (00:49:04): They are, substantially. And it’s because they not only know the policies, but they follow the policies. You know, they tend to follow the rules, and they don’t get distracted. So, not to say some crazy thing won’t happen one time out of a million, but 99.999% of the time, they’ll do the thing that you expect a car to do — which is keep its rider safe. So, okay — so that is coming. So now, as a business person, you have a choice to make, right? You can either embrace this, or you can sort of not. And the thing is, in a sense it’s a choice, but in another sense it’s not, because you’ve seen Kodak and, whatever, Polaroid —
BARRY RITHOLTZ (00:49:40): Who, by the way — Kodak invented the digital camera, but didn’t want to cannibalize their own film business. And how did that work out?
DAVID RISHER (00:49:46): Not exactly — not so well. And then, on the other hand, you look at maybe a company like Netflix, that invented the DVD-by-mail business to sort of set Blockbuster aside, but did such a good job surfing from that to streaming, and now to original content, right? They’re a great company in so many ways, but they were relentless, fearless about cannibalizing their own business to get to the next thing. So that’s the shift that we’re right in the early, early, early days of. It will be another platform shift. But we’re in a very fortunate position, and here’s why. You know, we have millions of riders. We have millions of — billions, billions of data points about pickup and drop-off location and pricing and so forth and so on. And we have a whole subsidiary called Flexdrive that does fleet management, which I can come back to in a couple of seconds. But these are gonna be some of the building blocks of the self-driving — or, I really should say, hybrid — network of the future. ‘Cause that’s the last thing I’ll say, just as sort of intro: self-driving cars are gonna come little by little by little. Human drivers are gonna be around for a long, long, long time. There are not enough self-driving cars in any given market to satisfy peak demand on, you know, Friday afternoon at five o’clock rush hour, or what have you.
BARRY RITHOLTZ (00:51:01): So this is not a three-, four-, five-year transition. This is a 10-to-20-year transition. Is that about right?
DAVID RISHER (00:51:07): Think about it as a decade transition. Yeah. And even, again, the word “transition,” I think, is maybe not quite right, because the economics of an expensive car don’t really lend themselves to having a whole bunch of them sitting around at two in the morning, empty. You really, I think, want a hybrid network for a long, long time — for human reasons, too, right? You might want someone to help you with your luggage, or maybe even someone to ask you how your day was. But the economics of it make it such that it’s much more likely this will be a hybrid network for at least a decade or, you know, more.
BARRY RITHOLTZ (00:51:37): So that kind of raises an interesting question: what exactly is Lyft? We know it’s a ride-hailing company; it’s also a transportation market-clearing mechanism. It’s a consumer brand, and it’s also a logistics platform. Like, where is the future growth coming from?
DAVID RISHER (00:51:56): I mean, you know, a little — all of the above, right? So, as you say, the thing people know Lyft the most for are, you know, human-driven cars picking you up and dropping you off. And as we were just saying, that will become a mix of human-driven and, you know, frankly, robot-driven cars. What you may not know is Lyft also runs the bike share system here in New York City.
BARRY RITHOLTZ (00:52:15): Citi Bikes are run by Lyft? I did not know that.
DAVID RISHER (00:52:18): That’s exactly right. So we run Citi Bike, we run the program in San Francisco, we run the program in Chicago, we run the program in Boston, we’re in Portland, Oregon. And then we also supply the technology and the bikes in London, in Barcelona, in Madrid — you know, many, many countries around the world. This may seem like sort of a small thing, but if you’ve been to a city like New York or London, you’ll know that cities are very, very aware that they want sort of multimodal transportation. So that’s gonna be, you know, a big part of our future as well. And then, look — someday, who knows, maybe boats, maybe vertical-takeoff aircraft. Who knows? But I will tell you that our real focus right now — and we will always be — this is our sort of purpose: serving and connecting. I want people to be out and about, and connect with each other in any possible way we can. That’s really what I want.
BARRY RITHOLTZ (00:53:05): So you mentioned London. What are the plans for Baidu robotaxis in London? Is this gonna be a pilot program that could potentially scale up dramatically, like the Waymos in San Francisco?
DAVID RISHER (00:53:21): That’s right. So again, let’s think about the self-driving car world for a couple of minutes. The technology is being developed worldwide. It’s being developed in the United States — Waymo, of course, is the leader, really the worldwide leader. Zoox, which is owned by Amazon, is much, much smaller, but, you know, trying very hard to come up behind Waymo. And then there’ll be, you know, many others, including maybe Nvidia, and companies that aren’t even really in the space now but will wanna sell their technology to different OEMs — to different, you know, car manufacturers. There’s also technology coming out of China. Baidu is sort of the Google — you think of it as kind of the Alphabet — of China. And there are many, many others. There’s a company called WeRide, there’s a company called Pony, there’s a company called Momenta, there’s a company called Geely. I was just in China a couple of weeks ago, looking at the incredible just growth of technology there — both, again, kind of hardware and software type technology. Okay? So that’s all background. It’s gonna be deployed worldwide. And in the United States, Chinese technology is not super welcome, for obvious reasons. But Europe is taking maybe a little bit of a more sort of economical approach, where they’re kind of looking at different technology providers and saying, let’s experiment. So in London, we’re partners with Baidu. Baidu has a very, very highly regarded self-driving platform, and we’re just in the early days of rolling it out there. It’s called an RT6 car. This is sort of behind-the-scenes stuff — it literally is just rolling off boats right now, and it’ll be commercialized next year.
BARRY RITHOLTZ (00:54:48): So I’m looking at the current crop of autonomous vehicles, which are essentially converted traditional cars. But do you really need that front driver’s seat? Can you change up the internal layout? Like, what are autonomous vehicles gonna look like — not in 2060, but in a couple of years?
DAVID RISHER (00:55:11): So again, it’s such an interesting time to be in this industry, and it’s exactly as you’re saying — like, do you really need a steering wheel? Do you really need, you know, an accelerator and brakes? Zoox, as I say — they’re an Amazon subsidiary — they would say you absolutely don’t. And they have a purpose-built vehicle that doesn’t have either one of those things. Now, for regulatory reasons, for human-acceptance reasons and so forth, for manufacturing reasons, that’s gonna be slower to roll out, because you can’t rely on, you know, the big OEMs to produce a car like that. That’s — it’s its own vehicle. So I think what you’re gonna see over the next three to five years is an enormous amount of new innovation in the car space. It won’t just be, you know, there won’t be a driver. It’ll be — you’ll have seats that face each other. You know, you’ll have seats that completely recline, ’cause you’ve got more space in there. You’ll have different luggage configurations. You’ll have — you know, some of them will feel more like, you know, party buses. Some of them may be, you know, corporate shuttles that just don’t have drivers. A lot of new stuff is gonna come in the next couple of years, step by step, because, again, you know, hardware is hard. It takes a long time to build it out. But, you know, you look five years out, and I think you’re gonna see a lot of cars that look pretty different from what you see today.
BARRY RITHOLTZ (00:56:16): I’m unfamiliar with Zoox and Amazon’s relationship with them. But if I recall correctly, Amazon was an early investor — took a big chunk of Rivian. That’s right. And all of the electric Amazon delivery vehicles you see are essentially the Rivian platform repurposed for commercial use. Is Zoox plus Rivian the direction Amazon is going? And do you guys — does Lyft, whose CEO has a relationship with Jeff, have a relationship with Amazon?
DAVID RISHER (00:56:49): We do have a relationship with Amazon. Of course, we’re huge consumers of AWS, which is Andy’s — the current CEO’s — kind of pride and joy. And for sure we’ll end up using — look, everyone is gonna end up partnering with everyone. That’s the interesting space we’re in right now: if you’re in the business of developing a self-driving car, it’s billions of dollars of R&D — billions of dollars. And so you want as many customers as possible. And then, if you’re in our business — in the business of moving people around and connecting people — you wanna have multiple suppliers of that technology, so you’re not beholden to anyone. Some of that is just being, you know, a smart business person. But some of it also is: technology goes through its own, you know, fits and starts. Look at what happens with the airline business when, all of a sudden, you know, Boeing has a problem with one of its units. You know, they stop manufacturing those for a time, or they’re grounded. So I don’t wanna overdramatize, but, you know, anytime new technology comes out, you’re gonna find some of that happens as well. So all of us are kind of in multiple — you know, let’s say maybe polyamorous relationships might be one way to —
BARRY RITHOLTZ (00:57:53): Well, don’t you have to be? You can’t lock into platform dependency too early — otherwise you end up owning Betamax, and what good is that? And I know half our audience has no idea what the hell that —
DAVID RISHER (00:58:05): Is. There we go. An old —
BARRY RITHOLTZ (00:58:06): School reference, yeah, right. But I mean, when you commit one way — so let’s talk a little more about the autonomous ride hailing. What are the big concerns? Is it safety? Is it regulation? Is it winning the consumer’s trust? What are the economics of managing a fleet like that?
DAVID RISHER (00:58:25): Again, so many interesting questions here. Let’s start with the customer side of things, right? So the first order of business has to be building customer trust and adoption for this new technology. Because, you know, it’s a car that drives itself, which is magical, but also can be a bit intimidating or, you know, even scary for people who haven’t seen the technology. Lyft obviously has a lot of value to add right there, because it’s a brand that people already trust; they understand you’ll be able to opt in or opt out of getting it. I was just in Atlanta a couple of weeks ago, where we have an experiment — a small deployment — with a company called May Mobility, which is also in the self-driving car space. They’re Toyota Siennas. They pull up to you, and all of a sudden you get in — it’s kind of a whole different type of experience from what you’ve probably experienced in the past. But because it’s got Lyft behind it, right on the door already, people sort of say, okay, great — I kind of understand this company and know something about it. Okay, that’s great. So then you kind of have to work yourself down the stack. There are all sorts of technology problems that you have to solve as you integrate, you know, their platform and us. And then someone’s gotta manage these cars. And this is worth talking about for a couple seconds. In traditional rideshare, the driver is responsible for their own car, right? They put gas in it, or they charge it up if it’s electric; they keep it clean; hopefully they keep it maintained, and so forth. But in the self-driving space, at least for the next three to five years, most of the car owners are gonna be professional fleet owners. You know, they’re gonna buy 20, 50, a hundred, 500, and are gonna kind of manage these as a fleet. And that means that they’ve gotta be, again, charged and maintained and cleaned — but they have to be done kind of at a professional level. That’s the sort of stage we’re in. We’ve had a subsidiary for many years called Flexdrive. We actually own about 10,000 cars on the Lyft platform for drivers who don’t wanna drive their own car. And we are responsible for maintenance and keeping them cleaned and so forth and so on. So we actually bring a lot to that as well. And I think that’s one of the reasons why we like the economic profile of self-driving cars. They don’t have insurance as high, for example, as personally driven cars. But also, we like the economics of our fleet-management subsidiary, and think we can service these at an industry-leading rate, and therefore, hopefully, make more money on the asset than anybody else.
BARRY RITHOLTZ (01:00:32): Is there still gonna be a future for people who — today, you would think of owner-drivers — who just wanna own autonomous vehicles and lease ’em out, or send them out into the Lyft network? Like, I’m crunching the numbers in my head as we’re speaking, and I’m like, oh, that could be a 10, 12% return on investment. Not bad when bond yields are 4%, three and a half percent.
DAVID RISHER (01:00:56): A hundred percent. I mean, there will be a time where, you know, if you fast-forward, you know, five years or whatever, maybe more, many people — individual owners — have cars that can drive themselves. And then there’s a question, to your point, of, you know, can you put that on the network? The answer is: absolutely, you’ll be able to put it on the Lyft network, and it’ll come back again cleaned and charged, because of the fleet-management side of things.
BARRY RITHOLTZ (01:01:14): Huh — that sounds really, really interesting. You know, it’s funny, ’cause when the ride apps first came out, there was a little bit of a lag before people got comfortable. What do you mean, I’m getting into a stranger’s car? I imagine we’re gonna go through the same thing — what do you mean, I’m getting into a car with no driver? It feels like the transitions are happening faster and faster. Same sort of question: this isn’t a 10-, 20-year thing; this is a couple of years before people — forget people under 30, who adapt so rapidly — the middle part of that age bell curve, the 30-to-60s, they’re gonna adapt to this pretty quickly over the next couple of years. How do you think about the different segments of consumer when it comes to autonomous driving?
DAVID RISHER (01:02:04): Yeah. You know, I think, as you’re suggesting, younger people do tend to take up new technology, you know, pretty quickly. But in this case, I do believe that many people, after they’ve had a couple of rides and realize that it feels very safe and reliable, I think they’ll flip from skeptic to kind of fans, you know, pretty quickly. Now, I will say policymakers, you know, they have their own, you know, issues — and some of that can be very local. So you may find some cities that just say, we just don’t want ’em on our streets for a period of time. You may find, conversely, other cities that say, bring them, ’cause we wanna feel like a city of the future. So I think there are gonna be some policy issues. There are also some infrastructure issues. Remember that, you know, AVs also tend to be EVs. EVs require charging; charging requires infrastructure. And not every city’s gonna have the amount of, you know, electrical power. I mean, this is kind of a side issue, but if you listen to, you know, Jensen, for example, at Nvidia, talk about what could end up holding the United States back from its next big leap — a lot of it comes down to power infrastructure in this country, right? So anyway, there are many different kind of bits and pieces, all the way from consumer adoption to physical infrastructure to policy and so forth. But I think, again, over the next three to five years, I think you’re gonna see a real shift — mostly because consumers are gonna try them and like them, and then they’re gonna be saying, hey, you know, faster, please.
BARRY RITHOLTZ (01:03:17): So here’s the crazy thing about AVs that I’m still kind of shocked about: it relies on visual, on lidar, on radar, and all these other technologies, but there isn’t a whole lot of infrastructure built into the roadway grid. Wouldn’t be that difficult to create a series of RF devices that are specifically geared for autonomous vehicles — that, like, every now and then, if you’re letting the car drive yourself and there’s an exit or a merge — like, it’s not great with those sort of things today, because there’s no real infrastructure. It’s relying on a technology not built for autonomous driving. Is there any sort of motion towards, hey, let’s everybody that’s doing autonomous come up with a set of standards and have the government implement this into the highway system?
DAVID RISHER (01:04:16): I mean, the short answer is no today — and long-term, for sure. And the reason no today, frankly, is, again, you know, anytime you see these platform shifts, you always have competition for sort of who gets to own the platform, right? And individual companies all have a huge incentive to say, you know, I wanna do it my way. ‘Cause if my way becomes the standard, then everyone else kind of follows along me, and I get to sort of set the standard. Over time, though, you tend to see that those things — that doesn’t become a long-term competitive advantage, typically — particularly for this sort of infrastructure. And so I would fully expect, over time, just in the same way that you can start to see charging networks kind of harmonize, that you’ll see some sort of, you know, kind of federal level. But we’re years before that.
BARRY RITHOLTZ (01:04:59): Right. We did see that sort of standardization take place in a lot of other technologies. And suddenly you’re not competing on a standard; you’re competing on highest quality, lowest price, et cetera.
DAVID RISHER (01:05:08): That’s exactly right.
BARRY RITHOLTZ (01:05:10): But you would think that if the cars literally knew exactly where the road was, it would be even that much safer.
DAVID RISHER (01:05:19): You would think. But I would say, right now, the technology is evolving so quickly at the car level, and really, the safety is very, very, very impressive. And of course, look — I know, you know, tomorrow morning you’re gonna open up, you know, a newspaper or an app, and you’re gonna read about some strange thing that happened, you know, in some strange part of the world, with a self-driving car. And I’m gonna tell you that that is gonna happen — and that’s, you know, one in a million, as opposed to, you know, one in hundreds, which happen every single day with human drivers.
BARRY RITHOLTZ (01:05:49): Yeah — those are the clickbait headlines, not the statistically significant practice. All right, so last question before I get to my favorite questions I ask all my guests. When it comes to transportation technology, what are we not discussing as a society, as a government, as consumers, that we really should be? What is kind of getting overlooked in this rush to new technology? It could even be something that you guys are focused on, but a lot of people don’t realize — oh no, this is really significant, and the public hasn’t quite grokked this yet.
DAVID RISHER (01:06:24): You know, I’m gonna come back to the basic role that technology plays in people’s lives, to help them live their absolute best lives. I’ll tell you something that I’m a lot passionate about personally. And that is: as people live longer lives, one of the things that is very predictive of their quality of life is how much time they’re spending with other people, out and about, socializing.
BARRY RITHOLTZ (01:06:44): Socializing.
DAVID RISHER (01:06:45): Exactly. Very, very highly predictive of a healthy, long life. And as we as a country are getting older — which we are, demographically — that is gonna be an enormous shift, where you have so many more people in their sixties, seventies, even eighties, who wanna live healthy, vibrant lives. And so one of the things I’m really quite proud of with Lyft is, you know, Lyft Silver — a particular product line that we’ve developed over the last year that’s really focused on, you know, helping older folks get out. The apps are easier to use, the cars are easier to get into, the driver’s a little bit more experienced. I think that sort of intersection between societal trend and the type of work we do in transportation is really quite deep. And, you know, maybe just as important, ultimately, is, you know, all of our conversation around medicine and so forth and so on is: keeping people out and about. And I know — here in Oura Ring world, where I am as well — or maybe you’re not, I don’t know.
BARRY RITHOLTZ (01:07:37): I am — my wife wanted to get one, so we got a pair. And she got bored being told she’s stressed all the time and stopped wearing it. So now I’m wearing it. So we both — we each have one, and I’m the only one who still wears it. How funny.
DAVID RISHER (01:07:48): Okay — actually, my wife and I did the same. She said, I get a little tired of seeing, you know, that it’s telling me exactly I’m stressed or I’m not sleeping well. But at least for me, it’s a sort of nice nudge to get good sleep, and, frankly, to kind of keep an active life. And so I see this space — the transportation piece — as somewhat similar. Like, I want technology that kind of helps me live my best life. And I think transportation plays a big role there.
BARRY RITHOLTZ (01:08:07): All right, so let’s jump to our speed round — our favorite questions. Starting with: tell us about your mentors who helped shape your career.
DAVID RISHER (01:08:16): Oh gosh, I love this question, ’cause I think it’s so important for us to remember that we all stand on other people’s shoulders. I’ll list a few. Of course, I worked for Jeff Bezos a lot — I’ve mentioned him. But I wanna mention other people. First big boss: a guy named Todd Nielsen. Todd really taught me the power of a great story, and also the importance of really listening to and watching customers closely. So he taught me two big things there. And then a guy named Peter Spiro — he was the board chair at Worldreader for many years. He and I sort of knew each other back in the Microsoft days, but he was the board chair for the nonprofit I ran. So focused on the team, so focused on the team — you’re only as good as your team. Really learned a ton about management and leadership from Peter.
BARRY RITHOLTZ (01:08:57): Huh — really interesting. Let’s talk about books. What are some of your favorites, and what are you reading currently?
DAVID RISHER (01:09:02): Oh man. I just finished a book called Good People. So I tend to read some fiction and some nonfiction. I’m currently reading a book called Apple in China — all about Apple’s entrance into China, and ultimately the importance that China has, and, frankly, the power that China now has, over Apple. And then Good People is a fictional book about an Afghan family from Afghanistan that moves to the United States, and is either a model family or terrible people. And it’s very, very hard to know which — the book sort of flips back and forth. Remember when I said that books kind of teach empathy and sort of different perspectives? This one does a good job of that.
BARRY RITHOLTZ (01:09:42): Huh, really interesting. What about streaming? You listen to any podcasts, or Netflix, Amazon, whatever? What keeps you entertained?
DAVID RISHER (01:09:50): I do. I am a podcast guy. I have to say, though, I’m kind of traditional when it comes to podcasts. I listen to The Daily from The New York Times pretty regularly. And I think most of it is because I have so many things in my life that are sort of — there’s so much content that comes at you that’s sort of superficial. And at least with The Daily, I feel like I get to go a little deeper on a subject. You know, it tends to be a kind of half-an-hour deep dive on a particular thing. And I do feel — particularly, I also read The New York Times; I know it’s sort of traditional in that way. So if I’ve read an article, and then I kind of hear a podcast on the same topic, I do feel like I’ve actually gotten maybe a little bit smarter about something, you know, beyond the surface.
BARRY RITHOLTZ (01:10:28): Let me just push back ever so slightly, please, on how The Daily has evolved. Because when it first came out — and I was a regular listener — I don’t want anybody telling me about the story that’s in the paper that I can read. They used to kind of do the background: hey, how did you start investigating this? What led to this? Tell us some interesting stuff that didn’t make it into the article. It was really inside baseball, and that stuff is kind of fascinating. Now, whenever I check it out, it’s the person — I don’t wanna say reading the story, but it feels like they’ve left a lot of that, you know, behind-the-scenes stuff back three years ago. It’s still — it’s become one of the biggest podcasts in the world. It’s giant.
DAVID RISHER (01:11:13): Yeah. Yeah. That’s interesting.
BARRY RITHOLTZ (01:11:15): Anything else? Anything else you listen to or watch?
DAVID RISHER (01:11:19): I mean, you know — mindless TV I love, but I’m not gonna embarrass myself and tell you all that sort of stuff. Yeah, we’ll stick with The Daily on this one.
BARRY RITHOLTZ (01:11:27): We are in the golden age of mindless TV, for sure. And it’s not — you know, if you are watching The Crown, or Landman, or 3 Body Problem — there’s so many fascinating shows out there. It’s not like garbage time like it was when I was a kid.
DAVID RISHER (01:11:43): You are right about that. And I will say that my wife and I became obsessed with The Pitt, as many people are. It is funny — and it almost makes you feel like, you know, I’m, like, halfway to being an ER doc myself. By the way, you are not — so don’t think that that’s true. But what is hilarious is my wife’s tolerance for some of the gory stuff is a little lower than mine. So she watches The Pitt with her hand kind of half in front of her face the whole time.
BARRY RITHOLTZ (01:12:04): My wife — we watched the first couple episodes. She’s like, this is just too much. It’s like — you wanna relax? And it’s very serious. I just kind of tense out.
DAVID RISHER (01:12:11): Yeah. But it’s a great cast, and it’s a great set of stories, for sure.
BARRY RITHOLTZ (01:12:16): Final two questions. What sort of advice would you give to a recent college grad interested in a career in either technology or business?
DAVID RISHER (01:12:25): So my advice here tends to be — it’s always sort of the same. And here’s how it goes. There’s so much temptation when you’re picking your job early on to pick something that sort of seems like it’s gonna be good on your resume, or maybe it’s gonna make you a lot of money — whatever it is. This is sort of the temptation, ’cause it’s so sort of in the air, maybe now more than ever, because of social media. And, oh man — the people that I see succeed are really the ones that say: yes, I have an economic reality; I have to sort of do better than that. But once the economic reality has been met, it is all about: pick something you think you’re really gonna love and are gonna be good at. And I say that like — you have to be a bit introspective of this. You know, maybe you love, you know, selling. Okay, great — so take a sales job. Maybe you love listening to customers — great, take maybe a marketing job. Maybe — but I’m trying to make this sound maybe a little bit more interesting than “follow your passions,” ’cause that’s so trite. But there is something to it: really kind of being introspective about what you think you’re gonna just jump outta bed every morning and love doing tends to be a much more powerful predictor of long-term success than people who try to optimize for that short-term, sort of get-rich-quick type of thing — and then find themselves later realizing, shoot, this isn’t really my thing. It’s somebody else’s thing.
BARRY RITHOLTZ (01:13:39): Really, really good answer. And our final question: what do you know about the world of consumer-facing technology and apps today that would’ve been useful to know 25, 30 years ago, when you were first getting started?
DAVID RISHER (01:13:53): Wow. Okay. That’s also a really interesting question. You know, I think I’ve probably gone through a similar arc to other people, where in the nineties — maybe even early two-thousands — I was sort of a universal techno-optimist. I probably was in the camp that said technology is such a powerful force for the good. And you see me try to, you know, harness it with Worldreader, specifically — of course, trying to take technology and get people reading. In that case, it did work. We’ve gotten, you know, over 22 million people reading. So that’s awesome. But, oh man, it is hard not to see some of the just terrible costs we’ve paid as a society. And so I think — maybe more of a mindset than a particular thing — of just: be really aware that technology is so powerful, and, man, with great power comes great responsibility. And I’m just a big believer that our best leaders now — and I’m not necessarily putting myself in the category — are being really thoughtful about, you know, the good of technology, but also really trying to avoid some of the problems.
BARRY RITHOLTZ (01:14:53): Good, good answer. David, thank you for being so generous with your time. This has been absolutely fascinating. We have been speaking with David Risher. He is the CEO of Lyft, one of North America’s largest ride-sharing networks. If you enjoy this conversation, well, be sure and check out any of the 639 we’ve done over the past 12 years. You can find those at iTunes, Spotify, YouTube, Bloomberg — wherever you find your favorite podcasts. I would be remiss if I did not thank the crack team that helps me put these conversations together each week: Alexis Noriega is my video and podcast producer, Sean Russo is my researcher, Anna Luke is my producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.
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Democratic Socialists of America march in downtown Berkeley, Calif., on Aug. 5, 2018. Amy Osborne/AFP/Getty Images
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