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FutureStarrLyft's Co-Founders Step Down
Lyft's co-founders are departing their management positions as the company struggles to turn around losses. CEO Logan Green and president John Zimmer will step down on April 17 and June 30, respectively, the company announced Monday.
David Risher, a board member and former Amazon executive, will become Lyft's new CEO. He founded Worldreader, an organization that encourages children to read for pleasure.
Logan Green and John Zimmer, co-founders of Lyft, have decided to step down as the company faces intense competition. David Risher - a longtime board member - will assume their day-to-day responsibilities as the ride-hailing firm strives to expand its operations in North America as well as venture into new global markets.
Lyft has fallen from being the leader in US ride-sharing to a distant second behind Uber Technologies Inc (UBER.N), which boasts superior pricing power and has recently ventured into food delivery. Furthermore, Lyft has been struggling to turn a profit, leading investors to pull their money out of the company.
On Monday, Lyft revealed that its co-founders would relinquish their management positions and board member David Risher would take over as CEO. This comes as part of a wider C-suite shuffle at the company which also sees President John Zimmer join the board and Green take over as chairman.
Though Lyft hasn't reported a profit in years, the company has experienced tremendous growth and is now an equally formidable rival of Uber. Uber has expanded into an international phenomenon, becoming the world's largest ride-hailing service with more market share than Lyft does.
Lyft's stock price has plummeted nearly 70% in the last year due to intense competition from its main rival. Without a sustainable growth plan, Lyft may struggle to remain profitable. Therefore, its shares are trading below $10 per share on Nasdaq, well below where they were when they first went public in 2019, according to Bloomberg.
Last month, Lyft revealed that it would be cutting prices to stay competitive with Uber. Analysts predicted this move would result in lower profits.
Even so, it remains uncertain if that will be enough to turn Lyft around. The company has also been hit by an economic downturn which has caused many other tech firms to slow or stop hiring.
Over the past year, its stock has lost more than a quarter of its value due to fears that price cuts and an inadequate quarterly forecast would adversely impact profitability. But with renewed focus on North American markets and new features like shared rides, it expects to accelerate its return to profitability by year's end.
At a staff meeting in 2018, Lyft's co-founders revealed their plans to purchase bike share program Motivate for $250 million. Employees had hoped this move would signal that the company was serious about expanding outside of America; however, nothing ever materialized from this announcement and only added to Lyft's financial woes.
As Lyft strives to regain ground lost to Uber in the ride-sharing market, co-founders John Zimmer and Logan Green are stepping down. This will allow David Risher, who has served as board president since late 2021, to assume the CEO role, according to a company statement.
At the end of June, both co-founders will retire from their day-to-day roles and allow Risher to run the business independently. Furthermore, they are both stepping down from their seats on the board.
Few months have passed since Lyft reported a record loss of $588 million for the final three months of 2021, more than double their loss from 2021 and providing an uncertain outlook for 2019. This news has further depressed Lyft's share price which has seen its market value fall below $4 billion, far below its peak value of more than $14 billion in 2021.
Before founding Lyft, Zimmer had a background in transportation and hotel management. He graduated from Cornell University with a degree in hotel administration before going on to work at Lehman Brothers until 2008 when he left the investment bank to launch Zimride and eventually Lyft.
Lyft is now present in more than 60 cities throughout the US and Canada, as well as an increasing number of countries around the world. Their app helps passengers and drivers connect, providing estimates of cost for rides ahead of time. Furthermore, Lyft also offers subscription services which offer faster pick-ups, scheduling convenience and assistance getting into a vehicle quickly.
Service costs vary based on destination, time of day and driver availability. Riders can pay their driver using either the Lyft app or by cash in advance. They also have the option to tip their driver at the end of the ride.
Most of the time, you'll be riding in a Lyft driver-driven car; however, there may be times when it will be shared with others, such as during special events. These vehicles are called Lyft cars and cost more to rent than traditional taxi services but according to Lyft it is safe for everyone involved.
The Lyft app will notify you of your driver's arrival and provide an estimated cost, including taxes. It also enables communication between yourself and the driver; if there are any queries or issues, customer support team is available to assist.
Lyft, like other ride-sharing services, requires its drivers to pass a criminal background check and possess a valid driver's license. Furthermore, the company provides an extensive safety program designed to safeguard both riders and drivers alike.
Lyft offers an easy and safe alternative to driving yourself around town, without the stress of hailing a taxi or sharing with friends. It's available in many major metropolitan areas like New York City, Boston, San Francisco and Toronto.
Lyft on Monday announced that its co-founders, CEO Logan Green and president John Zimmer, would be departing their positions by mid-April. These changes come as the company struggles to recover losses after a global pandemic interrupted demand for its services.
Green and Zimmer had a shared vision when they founded the company, emphasizing its ability to improve transportation, reduce traffic congestion and eliminate car ownership. This vision has guided their day-to-day decisions ever since, according to four current and former employees.
Two employees reported that the company's inaction has prevented it from exploring new opportunities, according to two employees. They questioned the firm's business strategy as well, suggesting that bike-sharing should have been expanded as a means to help consumers get around during the pandemic.
Lyft instead chose to focus on providing rides to those in need, but this strategy has proven unsuccessful. As the company struggles to recover from the pandemic, its share price has suffered as a result - falling in 2023 by 11%.
On April 17, David Risher, a long-time board member and current executive at non-profit Worldreader, will become Lyft's new CEO. Prior to this he held an executive position at Amazon where he was part of the founding team that transformed it from an online bookstore into "everything store".
Risher left Amazon in 2002, promising investors he would "build on the foundation you helped lay" as they transitioned from traditional retail into an e-commerce business, according to his LinkedIn post. This strategy is similar to Risher's approach at Lyft.
Lyft's stock has continued to decline, down more than 80% from its peak in 2022. With a loss of $588 million for the fourth quarter and an uncertain outlook for 2023, investors are becoming concerned about its prospects.
This puts the company in a competitive race with rival Uber, which has grown into the largest ride-hailing app globally and is valued at $71 billion. Analysts believe Uber has an edge due to its food delivery services and international rides.
Analysts and three current and former employees believe Lyft's overly cautious business strategy is costing it ground. Additionally, it has struggled to turn a profit since 2022 when its stock dropped sharply; additionally, every year since becoming publicly traded has seen losses in profits.
Some investors have called on Lyft to merge with another ride-hailing service or be acquired by a private equity firm, but analysts warn that given the current economic challenges - such as high unemployment and rising interest rates - this could prove difficult.