As the ride-hailing company struggles to compete with larger rival Uber, Lyft Inc. announced on Monday that its founders Logan Green and John Zimmer would step down as CEO and president, respectively. Instead, board member David Risher will assume those positions.
Risher, a former Amazon and Microsoft employee, managed non-profit Worldreader for almost a decade until joining Lyft’s board in 2021.
A dismal quarterly prediction increased worries that price cuts made to compete with larger rival Uber, which has stronger pricing power, a global footprint, and a food delivery service, will compress earnings. This led to the change of leadership at Lyft.
In addition to the price of rides, Risher stated that he would concentrate on service for both drivers and passengers.
In an interview, Risher said, “One of the first things we’re very focused on is making sure we’re matching Uber on price.
Extending the business to food and grocery delivery was not an open option because of what it could do to the rider or the driver experience, he noted.
“The last thing they need is to board a vehicle that has just delivered a pizza. The corporate strategy, in my opinion, may or may not eventually be very customer-friendly.”
Shares of Lyft lost roughly three-quarters of their value in 2022 and are down approximately 13% this year. Uber has gained 24%.
Lyft stock gained about 3% in after-market trading on Monday.
Despite its operations ceasing during the pandemic, the company, which was founded in 2012 and went public in 2019, has yet to report an annual profit but has reduced losses over the years.
Lyft needed to take action, according to Gordon Haskett analyst Robert Mollins, in order to start regaining the trust of investors. Although David will probably be given enough time to improve (or at least try to) the company’s competitive and financial situation, we feel today’s statement makes a sale improbable, at least in the near future.
However, Mollins thought it was “odd” that Lyft highlighted Risher’s collaboration with Microsoft’s Bill Gates and Amazon’s Jeff Bezos from more than 20 years ago.
In the early years, Risher contributed to the development of Amazon. As he left, Bezos publicly congratulated him and promised that Amazon will “grow on the foundation you helped lay.”
As the leader of the nonprofit Worldreader, Risher worked to promote children’s reading habits by facilitating the delivery of about 75 million digital books to 21 million kids.
Risher is set to become Lyft CEO on April 17. According to the business, he will receive a $3.25 million signing bonus in addition to a $725,000 annual salary.
Green, who was 23 when he moved to the Bay Area and started working on Lyft in a 125 sq. ft. office, will serve as Lyft’s chairman, while Zimmer will be the vice chair.