Mar 27, 2023
Lyft names David Risher new CEO as co-founder steps down
Uber is being rewarded for its diversification strategy amid a growth slowdown: Tom Essaye
Lyft Inc. tapped David Risher to be its new chief executive officer, replacing co-founder Logan Green as the ride-hailing company struggles to compete with bigger rival Uber Technologies Inc.
Green, along with co-founder and current President John Zimmer, will step back from daily operations but remain on the board, the company said in a statement.
Risher, who has been a board member of Lyft since 2021, has held previous roles as head of product at Amazon.com Inc. and as a general manager at Microsoft Corp. before launching his own startup. He will step into the CEO position effective April 17.
“All founders eventually find the right moment to step back and the right leaders to take their company forward,” Green said in the statement. “David has the right energy, ambition, and experience to lead Lyft into the future.”
San Francisco-based Lyft has increasingly been marginalized by Uber, which accounted for 74 per cent of the US consumer ride-share sales at the end of December, while Lyft had 26 per cent, according to Bloomberg Second Measure. Uber has benefited from expanding its ride-hailing service into food and beverage delivery, which helped it thrive during the pandemic when demand for shared rides plummeted. It also lured drivers with incentives and bonuses during a severe shortage of workers as the economy reopened in 2021.
Lyft has remained unprofitable since it became a publicly traded company in 2019, but has made effort to cut costs, shedding more than 700 employees last year. Last month Lyft forecasted dramatically lower profits in the current quarter, sending its shares plunging. Lyft’s earnings stood in stark contrast to rival Uber Technologies Inc., which saw ride bookings soar by 31 per cent in the fourth quarter.
“The decision suggests to us that Lyft is in a tough competitive position, given operational challenges vs. larger rival Uber,” wrote Bloomberg Intelligence analyst Mandeep Singh. “Amid a risk of cash burn and market-share loss, we think Lyft may explore strategic options, including a sale.”