December 1, 2020

Market and Financial News Aggregator

How Lyft became the company with nine lives

3 min read

Only during COVID-19 is a 50% decline in business considered progress.

But that’s exactly the environment that John Zimmer, president and co-founder of Lyft, says the ride-sharing company is facing. At its worst, business was down 75%, he says, and the company had to reduce its workforce by about 17% earlier this year.

And yet Zimmer remains optimistic. “We’re in a very strong position to weather this storm, and the storms that we have weathered previously were much more difficult,” Zimmer says on this week’s episode of Reinvent, a podcast about fighting to thrive in a world turned upside down by COVID-19.  

Reinvent co-host Adam Lashinsky describes Lyft as “the company with nine lives” that continuously faces “these knockdown moments” but keeps getting back up.

Lyft’s struggles have included facing off against its archrival, Uber. Zimmer says that when Uber raised more than $3 billion in 2016, Lyft was told it couldn’t compete. And then before the pandemic hit, Zimmer says the company was “marching toward profitability.”

“Lyft has been improved through adversity and will continue to get stronger,” Zimmer says, “And I do genuinely think we will be stronger on the other side of this.”

Zimmer thinks that there will be an increase in demand for ground transportation post-pandemic as people want “to come together to have a sense of community.”

Ridership is already creeping back up, and Zimmer says that certain demographics—like frontline workers—are using Lyft more than they were pre-pandemic. The company’s bike-sharing programs have also been a bright spot, which have surpassed pre-COVID levels of ridership.

Unlike Uber, Lyft hasn’t diversified its business into areas like food ordering and delivery. “We don’t think the world needs another one of those,” Zimmer says. “It’s also not our specialty. Our focus is on transportation—on going deep on personal transportation.”

However, he noted that delivery as a way for drivers to earn more money is interesting to the company. Lyft has heard directly from retailers and restaurants that they don’t want to pay the 20% to 30% being charged by a service like Uber Eats, he says. “They’re coming to us and saying how could we help them with delivery for their customers,” he adds.

In addition to dramatically decreased ridership, rideshare companies like Lyft are simultaneously facing big regulatory hurdles. The California state legislature passed a bill last year requiring gig-economy companies treat their workers like employees rather than contractors. Lyft, Uber, and other companies are sponsoring a ballot initiative—Proposition 22—that attempts to override that state law.

Whether or not Prop 22 passes, Lashinsky notes that at some point, companies like Lyft are bound to get more regulated. “If it doesn’t happen this time in November, it’ll happen increasingly in other ways in other years,” he says.

More coronavirus coverage from Fortune:

  • How a funeral inspired the pandemic’s hottest hardware
  • U.S. states are turning to a private Irish company to help stop the spread of COVID
  • “A tale of two Americas”: How the pandemic is widening the financial health gap
  • Procter & Gamble shows that increasing spending during a recession is worth it
  • Can COVID-19 cause diabetes? Here’s what we know

Beth Kowitt


2020-10-26 05:30:00


Read more from source here…

Leave a Reply