Ride-hailing service Lyft has been hit hard by the pandemic as ridership dwindled, causing the company to suffer deepening losses. In a bid to turn things around, Lyft has announced that former Amazon executive David Risher will take over as CEO. Risher will take the helm from co-founder Logan Green, who will step down from his role as CEO in April but remain involved with the company as its non-executive chairman. Meanwhile, co-founder John Zimmer will vacate his position as president at the end of June and become vice chairman.
Dismal Financial Outlook
Lyft recorded a $588 million loss for the last quarter of 2021, more than double the loss for the same period the previous year. The company also painted a dismal outlook for 2023, which has led to a sharp downturn in its stock price. Shares have fallen by around 80% since the end of 2019, and the company has seen a mass exodus of investors. In contrast, rival Uber diversified its operations to include food delivery during government lockdowns, which helped to keep riders using the app. As a result, Uber has seen ridership bounce back to pre-pandemic levels, a feat that Lyft has yet to achieve.
A ‘Train Wreck’ Six Months
According to Wedbush Securities analyst Daniel Ives, Lyft’s last six months have been a “train wreck” that necessitated a change in leadership. Ives speculates that Lyft may have to consider a sale in the future, given its current market value has fallen below $4 billion, down from roughly $14 billion at the end of 2019.
David Risher Picked as New CEO
David Risher, the incoming CEO, said he was “gobsmacked” when he was first approached about the job and is “prepared to take this business to new levels of success.” Risher was Amazon’s 37th employee and helped build the e-commerce giant into the powerhouse it is today. He was so instrumental to the company that founder Jeff Bezos once credited him with helping to create a business that is all about “working hard, having fun, making history.” Risher had been running a San Francisco nonprofit called Worldreader focused on helping young children learn to read.
Uber’s Turbulent Leadership Change
Lyft’s change in leadership comes after rival company Uber underwent a tumultuous leadership change in 2017 when co-founder Travis Kalanick was forced out in a high-profile power struggle. The incident was dramatized in a TV series on Showtime. Uber is now headed by Dara Khosrowshahi, who has been attempting to turn the company into the transportation equivalent of Amazon.
Looking to the Future
Lyft’s future under new CEO David Risher remains uncertain as the company grapples with pandemic-driven financial losses. However, Lyft hopes that Risher’s experience at Amazon will help the company to bounce back and find new pathways to success. Only time will tell whether the company can navigate these challenging waters and emerge stronger on the other side.