Lyft co-founders Logan Green and John Zimmer said they are stepping down from their roles running the company, after recent signs showed the US ride-hailing service has lost more ground against arch-rival Uber.
David Risher, a Lyft board member and early Amazon employee, will take over from Green as chief executive on April 17, the company said. Zimmer will step down as president on June 30.
The management reshuffle comes two months after Lyft conceded that it would have to slash fares to try to stay competitive with Uber, denting its profit forecast for the latest quarter. Since the onset of the coronavirus pandemic it has steadily lost market share to Uber, which was able to lean on its food-delivery service and international diversification to cushion it more from a drop-off in ridership.
Lyft’s shares edged up nearly 4 per cent on the news in after-market trading, but are still down 87 per cent from their price at the time of the company’s IPO in 2019.
Lyft said the founders had “decided to transition from their full-time executive management positions”. In a blog post, Green said he wanted more time to spend with family and to “explore new ways I can contribute to protecting our planet”. He added: “All founders eventually find the right moment to step back and the right leaders to take their company forward.”
From the start, Lyft’s founders sought to position their service as a more friendly, community-minded alternative to Uber, but struggled in the face of aggressive pricing that the better-capitalised Uber used to try to drive out competitors. Thanks partly to its food-delivery service, which provided work for drivers during the pandemic, Uber has been able to maintain a larger network of drivers, strengthening its lead over its main domestic competitor.
Lyft has never reported an annual profit, and its accumulated losses by the end of last year reached nearly $10bn.
Green and Zimmer started out with a carpooling service for long-range journeys called Zimride, before adding the Lyft service in 2012 and eventually renaming the company.
Though giving up their management roles, Lyft’s founders will retain a significant interest in the company. Green is to take over as non-executive chair while Zimmer will remain vice-chair, Lyft said. Through a special class of shares they also control just over a third of the votes in the company.
Source: Financial Times