For years, Lyft has positioned itself as a “hot girl” in the car industry. She said that rival Uber would do everything or work against regulators and the taxi industry to create a path so that companies could offer cars to customers through an application.
In fact, Lyft cultivates a brand of bem-estar – but Uber dominates the market. For a moment in 2017, however, it seemed that the balance of power could shift, as Uber was hit with a seemingly endless series of public relations crises that culminated in the resignation of its founder and CEO, Travis Kalanick.
Six years later, not so long, Lyft’s position is more precarious than ever. Uber now has 74% of the US rideshare market, up 62% in 2020, second to YipitData, while Lyft’s market share fell to 26%, from 38% in the same period.
As is so, the actions of Lyft fell by almost 90% since they became public in 2019.
In the face of these challenges, Lyft announced at the second fair (27) that its two co-founders, Logan Green and John Zimmer, would be stepping down from their management roles at the company behind Amazon veteran and Lyft board member David Risher, to assume or command Lyft as CEO.
In his announcement, Lyft framed the leadership change as a direct succession plan. “All founders end up finding the right time to find the right leaders to take the company forward,” Green said in a statement. “As a member of the council, I am aware of the challenges and opportunities that will come your way.”
For Lyft, the current challenges are immense. As for Uber, it diversified its business beyond ride-sharing, delivering meals and merchandise items, Lyft has never heard of it.
This is duvidly prejudicial to the company before the start of the pandemic, when fewer customers travel, the more items we order online. At the end of last year, Lyft said it was cutting 13% of its team, or 700 employees, as part of a big effort to cut costs.
At the same time, Lyft now faces an Uber led by a seasoned executive, or Expedia veteran Dara Khosrowshahi, who immediately began working to direct the business in the company’s image.
On Khosrowshahi, Uber doubled down on the growth of its food delivery business, while working to cut costs elsewhere, including selling more experienced efforts like its self-driving car unit.
In its most recent earnings report last year, Uber says it has its “strongest quarter of all time,” reporting a 49% increase in revenue year-on-year. Lyft’s latest earnings report, as such, was exceptionally disappointing for Wall Street.
The technology analyst, Dan Ives, of Wedbush Securities, said that the Lyft conference call to discuss the results “was one of the three worst calls we’ve ever heard,” and that his “management is trying to play darts with blindfolded eyes.” He criticized the profit prospect offered on the call as a “forever disaster”.
With Risher as the new CEO, Lyft is clearly expecting a turnaround. Risher was the 37th employee of Amazon – a company that has long been a model for the on-demand industry – and became the first product chef of the electronic commerce giant and chef de varejo in the United States.
In his statement announcing Risher as the new CEO, Lyft leveraged his legacy on Amazon. “In honor of the contributions of Mr. Risher, Jeff Bezos adds a permanent thank you to the Amazon site, where it can still be seen today.”
Tom White, a senior research analyst at DA Davidson, wrote in a note this week that the new CEO “may signal a greater willingness to expand a little bit of LYFT’s strategic opening not in areas like product (delivery) strategy,” partnerships, or other new ways of creating value.”
Nicholas Cauley, an analyst at research firm Third Bridge, wrote that Lyft “still has a lot of leverage it can use to regain market share.” He also added that “there are improvements to be made and a change of leadership is a positive catalyst to turn the ship”.
But, in an interview with CNN At the fourth fair (29), Risher appeared to dash hopes that Lyft would borrow or handbook from Uber and branch out into other delivery categories.
Risher said to CNN He wants to ensure that Lyft is focused on providing an optimal car service and “is not distracted by delivering pizzas or packages, or all kinds of other things that other companies are doing.”
“I really don’t want to get into the same car that, you know, I just delivered the tuna sandwich,” he added.
“And when you talk to the motorists, they say: ‘Well, I don’t earn as much with food delivery and it’s more frustrating. I receive tickets when I’m parked in a double row in front of the restaurant and like this for the day. So, you know, I’m glad that Uber also has its challenges”.
Risher also said that “it is not our focus” to look for the company’s sales.
Now the market initially seemed to be doing well under Risher’s name, the slight increase in the years of Lyft following the release of the news was quickly reversed one day later, when Risher began talking about his plans for the company.
Source: CNN Espanol