Lyft CEO David Risher on paying drivers more and the shift to robotaxis

22:05I know what those tradeoffs are. We talk about the structures on the show all the time. If you look at how Amazon is, they have lots of single-threaded owners of two pizza teams that make their own products. Those products rarely talk to each other. As you're describing, you end up in a lot of different – Google, same way. You end up in a lot of different directions and suddenly you're like, we got to roll out AI across the company. Yeah. And you don't have a common shared framework to do such a thing. Totally. Have you run into this at Lyft? You're aware of this tradeoff? How are you managing that?

22:32You know, so remember when you asked me about my vision for Lyft and I talked a lot about ride share and a sort of focus on getting people around and making sure that – So we, I would say a strength that we have is we're really quite focused on our customers and our use cases. And so while, yes, occasionally those issues crop up, it's kind of a small thing for us. And also I would say, and this is, I don't know if this is a good or bad thing, but it just is a thing. I am very involved with product decisions. Very, very involved. Yeah, just thinking about the last 24 hours and how I've spent my time.

23:09I mean, like, like product users, you know, and it's again, like parts of the team that like that. There are parts of the team that find a little frustrating, but, but I have no problem saying like, we're, we don't need to do these three different things. We're going to do this one thing here. We're going to do it super well. And that means that these other two teams that thought they were going to get to work on those things, we're just not going to have that happen. Instead, we're going to have them focus on something else. So I guess a little bit of, to a certain extent, we solve the problem by focus because we're focused on sort of one thing and not Amazon's focused on many things, but we're focused on one thing.

23:36And then second, I play a pretty big role there in kind of breaking ties. That does seem like the way to make this structure work, right? You need to have the leader who's just going to show up and break ties all day long. It also seems like scale is the other – that leader can't scale. At the same time, if you want to attract great people, you have to give them some autonomy. How do you balance this? What's the cadence of letting your folks do what they want to do and then showing up and telling them they have to do what you want to do? I mean it's such a classic issue, right? So I actually wrote about this last year in the shareholder letter.

24:11I wrote about two things. I wrote about inshidification, why products tend to get worse and how we're pushing things the other direction. And then this topic, which I called Falcon Mode. So the sort of visual that I wanted people to think about is the Falcon, which is flying at 2 ,000 feet and hangs out up in the sky often because they need to see everything. They're looking for where's my next meal. and they're pretty good at even at 2000 feet seeing where that next bill is. And then they got to dive in deep and they got to get the meal. Otherwise they, you know, starve and fall out of the grip for all those guys.

24:44So, so, you know, this kind of coming down and going back up and coming down and going back up, like that's the world that, that the CEO lives in. Um, I don't, you know, it's, uh, it's art, you know, and it's, and part of it is expectation setting. Part of it is telling my team, like, I am going to do this. Like I am going to talk in excruciating detail about this loyalty program that we're in the process of developing. And anyway, that's going to be where I kind of go Falcon mode on you. But then I'm going to go way, way up and I'm going to say, now it's yours. And you're going to tell me all the ways where I got it wrong, or you're going to push back or whatever it is.

25:21I don't know. There's no easy answer here, but I think a lot of it is just maybe being judicious. Because if you do it, I'll say a little bit of an adjacent and things. Sorry for going on such detail of this. This is actually a comment that I heard Gavin Newsom of all people say, which I thought really is very interesting. He was saying you have two types of power as a leader. You have positional power and you kind of have moral authority. And the difference is with positional power, the more you use it, the less you have of it. So if you use too much of it, you squander it, right? Because people eventually get tired of being told what to do.

25:53Moral authority is a little different. If you say, for example, in my case, Like, you know, we're going to be a customer-obsessed organization, and we're going to look at everything that lands. And occasionally, I'm going to come in and remind you what that really looks like, but then I'm going to sort of back way off. Almost the more you use of it, the more it creates itself. You know, it reinforces. And people go off, and they have their own amazing ideas and stuff. So anyway, that's the mode I try to get to. You can ask people on my team whether I'm successful or not, but I try to be very, let's say, deliberate about the balance between the two.

26:20Yeah. I'm always curious when you end up in that divisional structure. There's an amount of just re-coordinating that needs to occur. And most tech companies have chosen against it. So it's fascinating that you've chosen this way and you are very clear that you actually need to do that specific task. Because I have so many conversations with – I mean the number of CEOs who are like, I don't do anything, which is very funny, is very high. So let me see one little tiny thing about that. So Scott Cook, who I'm sure you know of, the founder of Intuit and still very active on the board, he's just in the process.

26:51I just saw him a couple nights ago. And he's someone I've known for many years. He was on Amazon's board in the early days. And we've kind of reconnected over the last bit. Anyway, he's actually writing an article that I think comes out any day in the Harvard Business Review about a study of a couple of companies where he tries to, I think he makes the case, I haven't read the article because it's not, but I think he makes the case that the best companies are the ones where the CEO focuses not just on the what, but actually on the how. Like actually gets involved in the how. Like this whole, like, I don't do anything because it's a CEO.

27:19He's like, that's bullshit. Like if you're running a company, you're doing a lot. And a lot of it is not just the big ideas. is it's how are we actually going to organize? How are we actually going to get this thing done? So I don't know. I'd be a little skeptical. I don't know. I think the CEOs are saying that either. I don't know what that's all about. But anyway, it's not who I am. I'll just say it that way. I feel like our producers and I could do an entire episode of Decoder just on why we think some people say some of the things they say. Interesting. Speaking of which, we have a little side bet going on how you're going to answer the other Decoder question.

27:48Ah. How do you make decisions? What's your framework?

27:55Okay. I mean, the obvious thing, and it really is true, is I start from the customer and work backwards. I don't know whether that's what you're betting I would say, but that is actually true. I'll say maybe a different thing, though, that I haven't talked too much about publicly. So I, I guess, okay, I am sort of blessed in the following way. I don't find making decisions super hard. And what I mean by that is, I think there's a way of, in a sense, all you're doing as a CEO or any leader is making decisions in a sense. Like, yes, no, you know, hire the right people, fire the wrong people, say yes to the good ideas, say no to the bad ideas.

28:36Like, that's the job. Okay. And there's a lot of decisions there. Is it the right person or the wrong person? Do I fire them or do I keep them? You know, I love them like a brother, but maybe they're not the right person. All these things. And then is this a good idea that's going to scale and customers are going to love or is it a bad idea that was just, you know, dumb in the first place? Okay. So that's kind of a framework, I guess, but not really. It's just sort of an observation about the job. and then I get down one level and say, well, I don't personally mind making decisions a lot. I don't.

29:03But I am aware that every decision takes a certain amount of effort. It does. And so what I try desperately to do is I try to make the biggest decision I can possibly have so that everything else just becomes almost a checklist. Let me give you a personal example. Years ago, my wife and I sat down, this was back in the early 2000s, and said, We met at Microsoft and we said, it's interesting at work, we have these sort of multi-year plans. But here we have a family. We have two daughters. At the time, they were very young. And we said, what's our multi-year plan for our family? And we came basically to the conclusion, we want to live outside the United States at some point.

29:44We want to give ourselves and our kids that experience. That was the big decision. Okay. Then there are a bunch of questions. Where, when, what schools, how do you get insurance? All these things. but we already made the big decision. And so everything else was just like a sort of checklist. And we ended up doing it a couple of years later. We moved outside the United States. It turned out to be a very, very long and very important thing for our family to do. But I say that very long story to kind of say, like, I try to hold myself to, what are the biggest decisions I can possibly make? Where once that decision is made, everything else becomes just kind of a checklist.

30:13And then frankly, I don't worry a lot about, if things are then on track, I don't have to worry too much about it. And I can go on and make the next decision. Okay, we all lost the bet. You are, congratulations. I think we should send you an award. You are the first ex-Amazon person to ever say something other than there are type one and type two decisions. Oh, God. Yeah. Oh, shit. Oh, yeah, yeah, yeah. I mean, yeah, sure. Literally in the pre-production, he's from Amazon. He's going to say there's one-way doors and two-way doors. And we were all like, all right, let's just get through it. I see.

30:47First one ever. First person who's ever come within 100 miles of Amazon headquarters who did not immediately say one-way doors and two-way doors. I feel proud. I have my own ideas. Look at that. Very good. We have to pause here for a quick break. We'll be right back.

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33:52Welcome back. I'm talking with Lyft CEO David Risher. Before the break, he managed to be the first ever former Amazon executive to not give me the two-way door answer to a decision question, which was delightful. But then I had to ask him another question that seems to be coming up in every episode lately. What are we going to do about AI? Let me ask you about some stuff that is changing that I think you're going to have to make some decisions about. And honestly, we'll stress some of your structure. AI is here. It's happening in a lot of ways. Every CEO of a service company, whether that's TaskRabbit or Uber or whoever has come on the show, I've asked this question.

34:29I've been calling it the DoorDash problem. I should probably get the people from DoorDash on the show to actually ask them directly about this thing that I've been calling the DoorDash problem for six months. But just a couple days ago, opening I had Dev Day. They showed a bunch of integrations where you could ask Chatshapd to go do stuff for you, including book an Uber. We've seen other agentic products. Amazon announced Alexa Plus. We'll be able to go book a flight for you. We'll traverse websites. It's built into Chrome now. We're going to traverse websites on your behalf and do stuff for you.

34:59The back end of that, whether it's you or ZocDoc or whoever else, is, well, we have a database of information. We know where all the drivers are. If you want to buy a sandwich, we know where all the sandwiches are. And so your agent is going to come and order a sandwich on our website. And we won't get the customer. Right. We will just become a service provider to some chatbot interface and we won't be able to do upsells. We won't say, hey, there's do a lipid tickets or whatever we're going to say. And that's going to shrink our margins and we'll just become commodity service providers. This feels like a very big problem.

35:30I've been asking everybody about it. Does that feel like a big problem to you? I mean, maybe, right, for the reasons you just said. But I wouldn't say it's one of the top five that I worry about. And a big part of it is, first of all, remember what you're doing. You know, you are trusting something like you're trusting that this thing, this person is going to come and pick you up and they're going to be on time and it's going to be safe. And if I leave my iPhone there, I'm not going to get the thing stolen, all these different things. And it's physical, you know, it's, it's safety and it's real world stuff.

35:59And so it's, you know, so it's, it's not like, like the, like the most extreme version of what you're saying is I go to chat GPT and I say, please come pick me up. And some rando comes pick me up and there's no guarantee. There's no service. There's no, you know, like that would be bad. I don't think a lot of people would be super excited about just some rando coming, picking me up and sort of an unbranded service and whatever it is. So if it's not going to be sort of an unbranded, just rando picking me up, then it probably has to be one of the guys who are doing the existing rideshare and that's us.

36:27And then we've got all sorts of ways where I think we can compete or we can compete. So we want to compete on relationships, by the way, not just on transactions. And what does that look like? that you already mentioned. You choose us, among other reasons, because you get points on your unnamed credit card when you do that. Well, that's still going to be the case in the future. And so you might have a preference for us that you push through ChatGPT if they try to disinterpreting you. You say, well, no, I actually have a preference here. And we're going to do a whole bunch of different things to make sure that you have a very, very strong preference for asking for us by name, not just saying, I want to get to a place.

37:06And then second of all, remember that - Wait, can you tell me what those things are? Because right now on my phone, the apps are side by side. And I open them both. And I will – if it's within$5, I'll pick the credit card points. But I will almost always pick the cheaper one. Yep. And I feel like an agent going off onto the web and finding the cheapest one is actually the most direct threat to your margins, to everyone's margins. So I don't think it's a big margin threat because we already price – let's talk about price specifically. So you are not alone, right? Quite a few people price shop. Interestingly enough, from my perspective, I wish everybody did.

37:47And you're saying, well, that's weird. Why? Because remember, I have 30 % share and the other guys have 70 % share. And we price almost at parity. In fact, our strategy is actually price a little less when we can, but it's really hard because we have costs, and those are real costs, insurance, driver pay, and all these different things. By the way, the other guys have pretty damn similar costs, which is why our prices are so like this. Now, we might have a slightly different strategy. Maybe we compete a little harder at airports. Maybe they compete a little harder at something else, but it's marginal.

38:18My point is, why do I say I want everyone to check both? Because if everyone checked both, I'd win probably 55 % of the time as opposed to 30 % of the time. That's great for me. So let's just, first of all, let's just step one. I don't mind that. But that is the margin pressure, right? If the Asian is, if Chagibita is saying, here are the two rates and the strategy to win is to always have the lower rate, you will quickly become competing in a way that right now maybe you aren't competing all the time. No, no, we are. That's the thing. We already are. That's the basic, I think, the premise of the question.

38:49This is true in some industries where price makes less of a difference and therefore, if you're, and nobody wants to be reduced to competing on price. But the truth is that's our life every single day. Every single day we wake up and we look competitively market by market, where we are, where are we low, how can we get lower and so forth. So I don't worry a lot about someone else. I literally don't know how someone, a third party, not us or the other big guys, could underprice us consistently. People try and they go out of business. That's the way that works because they realize that the costs that they have are no less than the cost that we have.

39:23They just tried to subsidize it through some other magical thing for a while and they ran their cash. And we have a big scale and all these reasons why it's hard to underprice us. And then between us and the other big guys, again, there's just not that much left. You know what I mean? So it's like, I don't know how either one of us could underprice the other in a sustainable way. But then back to the fundamental thing, of course, which is if you then believe that the price is pretty much the same, and again, if most people believe that, then I probably have 50 % share, not 30 % share, but I digress.

39:53Then it becomes, who can get you the points, who can allow you to pay with the points, for example, who can pick you up faster. Today, we pick you up about a minute and a half faster than we did a year and a half ago. Oftentimes, not always, but oftentimes it's actually faster than the other guys because we've got good algorithms. I'll just say that. We have drivers who like us a lot. That's also a real source of strength. Anyway, then there's a service you can get in the car. What happens when you get in the car? Today, you might say it's, well, generic, Toyota Camry. But I don't know, maybe there are things we can do with the drivers there to make you feel a little bit more special that might make you say, you know what?

40:30I actually do have a preference. Even if the price is, forget it, even if the price is exactly the same, I'll still always ask for a Lyft over the other guys because I'm going to get a better experience from the driver. So I know that was a little bit of a roundabout point, but the reason I don't worry too much about it is I think it'd be very difficult for anyone to quote unquote go direct to one and a half million drivers that we have. I think that's very, very hard to do. And then on price, I'm not super worried about being competed out of the game because I think I've got a pretty good cost position.

40:57I think it'd be hard for someone to underprice. And we already compete pretty directly. And so then I think it comes back to who can offer the better service. And I feel really good about our ability to offer a great, great service. So that your customer relationship will traverse whatever interface people are using, right? People will say, I still have a relationship with Lyft. And remember, most people don't change what they're doing unless something else is like 10 times better.

41:25Checking prices on airlines tickets is hard. It's dynamic pricing, hugely big swings, you're planning ahead, vacation for a lifetime, all the things. But our stuff is like – I'd say very few people ever send me notes saying I had a hard time with your app or getting a car or anything like that. So in other words, I actually think that already we do a very, very good job. So I'm not sure the additional value add. Again, if there's someone else who can come in and give it a much lower price, I might be worried. The other challenge there is that you might have the brand relationship, but they're not actually opening your app, which is where you might show them upsells to other products or straightforward advertising or explain and reinforce why your brand is more valuable than the other one because it's all happening in someone else's app.

42:14And so that would be a drag. Yeah. Yeah. That'd be a drag. But I would say at least what I've seen so far, just using ChatGPT as the example, they seem to be more accommodating around that than you might expect. In other words, they don't – and again, it's not that they can't change strategies or that there's no reason for them to – but at least the kind of apps that I've seen tend to be a little bit more – give more control to the app developer than sort of just a generic thing. Because I think they also recognize brands matter to a lot of people. My theory on that is that the agentic products that they are promising don't work as well as they should.

42:51So they are forced to put app views in the chatbots. Fair to. This is a very pessimistic take, but that is my belief today. But when you hear them all talk about – across the board, not just OpenAI, but across the board. When you hear them talk about their agentic products, there's not a view that you're going to get dumped into an app. There's a view that the agent will actually do it. And once the agent starts doing it, your customer relationship starts to diminish. And that's like the heart of what I have been calling the DoorDash problem, right? Now it doesn't matter where the car comes from.

43:20Yeah, yeah. As I say, I really do get the – I mean, of course, it's something we think a lot about, so I don't want to diminish it at all. But if you have – this problem becomes a much bigger problem if, A, you're not used to competing on price already, or B, you don't have kind of a big supply that will be hard to get to directly. And it's really hard to get to 1.5 million drivers and know where they are and all the different things about them in any direct way. Hard to kind of go around. But yeah, who owns the customer and all that? That is going to be played out. And part of my job, of course, is to make the Lyft brand so interesting and compelling that regardless of how you get here, you still feel.

44:00Remember, here's the last thing I'll say. People's interaction with the app, And this is different from us versus some, you know, primary tech companies is relatively brief compared to the time they're spending in the car. And so I would say, you know, part of my job is to figure out how to make that in-car experience even more interesting and, frankly, have a bigger place in your brain than just how you happen to get there. Let's talk about that for a second. You do have the other customer, the driver. Every time I get into a rideshare car, I ask the driver, what would you have me ask the CEOs of these companies?

44:37It is always the same answer. I'm sure you can guess what it is. They all want the rates to go up. I don't think I've ever even heard another answer. They all just want the rates to go up. The idea that maybe the rates you charge to customers might change in the world of AI or the margins might change if you're not doing as many upsells in the app because of AI interfaces is in direct conflict with, Boy, the drivers want their rates to go up. They would like your costs to be higher. One, can you pay drivers more? This is the number one question I get, so I'll just ask you directly. Can you pay drivers more?

45:09Do you see a pathway to doing that? The short answer is we pay drivers as much as we possibly can. Our interests are much more aligned with drivers than I think the popular imagination and drivers would sort of think. And the reason I say that is because we both have the same goal, which is to get as many rides going through the platform as possible and to increase the total volume. Now, of course, at an individual driver level, they might say, well, gosh, I wish there were fewer drivers on the platform so I don't have to compete with as many other drivers. There are things like that. And riders would say the opposite.

45:45I wish there were more drivers so that someone could pick me up faster. So, but, but broadly speaking, like we, so let me, let me back up for just a second, because it's such a, such a big, such a big deal. Okay. First of all, let's start with the super basics. How much do drivers make? Let's actually talk about this for a second. Okay. We've studied this a lot. There's a great white paper on our website that actually is super, super well researched and that database, not just opinions. Okay. Broadly speaking, when a driver is driving on our platform, which means they're either They're coming to pick you up or they got you in the car and they're dropping you off.

46:19They're not waiting. So we're going to come back to that in a second. When they're driving, they're making about gross nationwide,$30 an hour,$30,$3,$0. Now, they have costs, gas, maintenance, cleaning the car, these things. Not insurance, we pay that, but repairs, things like that. If you take all those costs in accounts, about$20 an hour,$20 an hour. So$20 an hour. So let's just say that. So then you're thinking, well, gosh, that doesn't sound so bad. Well, okay. But here's the part that you also have to know, which is they're not always getting paid the 20 bucks an hour because sometimes they're waiting.

46:54And when they're waiting, they're not making money. Now, when they're waiting, often they're on the other guy's app. And so net-net, they still might be making$20 an hour if they're really good at flipping back and forth. But I can't guarantee demand. I can't guarantee on my platform, on anyone's platform, there's always going to be demand. Okay, so that's a very long time. Now, what do they get in return for all that? For not getting a guaranteed$20 an hour, they get the fact that they can turn the app on anytime they want, off anytime they want. They can pick up their kids. They can go on vacation.

47:24They don't have to call in if they don't feel like coming to work. Like that's what they get. That's the big trick. The big trick is here's how much you're going to make. And we're going to try as hard as we can to have you make more, as hard as we can. We're going to build AI. So we talked about, you mentioned AI a couple of different times. A lot of our most interesting applications of AI right now are actually for drivers. We have a whole driver earnings assistant that allows a driver to go in and say, I want to drive Monday, Wednesday, Friday, not Tuesday, Thursday. I don't want to drive over the bridge.

47:48I got to go home being five o 'clock. Give me the best possible plan, as an example. Or a driver reference letter. You started to drive two and a half years ago. You're one of our top 5 % drivers. You're super reliable. Here's a reference letter you can literally take to your next potential employee. So there are all sorts of things that we can do. We can give gas discounts. We can do all kinds of things to try to make your earnings both on the platform and even if you decide to go do something else as high as possible. But the reality is, A, we can't guarantee demand. And B, it is absolutely true that there's a cap to how much we can pay based on 800 million data points a year of roughly how much riders are willing to pay.

48:31And the last thing I'll say there is you can see that if you look across the country. For example, in Washington State, Seattle in particular, rates are quite high there, quite, quite high. An average, let's say, bookings of$30 an hour versus$20 an hour because of local legislation that went in. And guess what? The number one complaint I hear there is, I don't get enough rides. I don't get enough rides. What's happened to all the rides? I'm like, well, guess what? That's kind of what happens here if you don't let the market kind of set the rate. The other side of changing rates, pushing them higher, is that would be how you get more drivers on your platform versus Uber.

49:05The driver availability battles of the early rideshare days are pretty legendary. You had venture capitalists basically subsidizing both sides of the market. That's right. So you paid drivers high rates and then I remember I just got around New York City for free on the bank of SoftBank's money. That's right. I don't know what else the Vision Fund accomplished, but I traveled in style for about four years. But you sound in style. Yeah, absolutely. That's fine. That's awesome. Obviously, that has all come to an end, right? Now the market is actually connecting supply and demand more directly. But that would be how you could take share from Uber.

49:38We have to take another quick break. We'll be back in just a minute.

50:04Why a insurance is not a opponent. And how a business is stable or is a business. In the podcast channel, good news from credit reform. Everywhere, where it's podcasts.

50:34Does that come out? Have you modeled that out? So we actually try to pay drivers more. Again, just like we try to charge riders less, but it's very hard. This is not a high margin business, but we look at it literally every single week. Here's every single day, actually. Here's what I can tell you that it might be a little surprising. We have a 29-point advantage over the other guys on a dimension that I really care about, which is which ride-share platform would you prefer to drive for? 29 points in preference. There's actually another question that's adjacent to it that we ask every quarter, which is, does driving for Lyft give you a sense of pride?

51:12Or driving for the other guys give you a sense of pride? And we also have, just coincidentally, a 29-point gap in both of those for all sorts of reasons. Primarily among them, and all the way back to your first point, we do something the other guys do not do, which is we guarantee. We guarantee you will never, never, never as a driver make less than 70 % of what riders pay after insurance is taken out over the course of a week. And literally every week we send out millions of dollars, millions of dollars of direct deposits to drivers to top them up to at least a 70%. Usually the number is about 85%, but 70 is the absolute floor.

51:46That is a huge, huge driver of preference for us. And so the drivers that are being maybe a little bit more thoughtful or nuanced in their answer to you when you ask the question would add, but I know a lot of them, they know it, but they don't really say it because it's kind of not in their best interest in any way. They're still whatever. Like I know that Lyft has actually done some real work here to make sure that our pay is at least a foot. Because that we can guarantee, we can't guarantee demand. We can guarantee we're never going to pay you less than 70%. So that's a very long way of saying it's hard for us consistently to pay more.

52:14We try it sometimes and sometimes market by market we do. But broadly speaking, again, this is a very, very efficient marketplace. And so what we try to do instead is all sorts of other things to drivers to make them feel appreciated, seen, well-paid, not unfairly paid, and so on and so forth. That's kind of the – The other pressure on drivers and rates on this entire ecosystem is autonomous vehicles. Yes. A lot has been said about autonomous vehicles and how they might displace drivers, how they might change those rates. the cars don't quite drive themselves yet, right? There's Waymo in a handful of markets.

52:51There's whatever Tesla is doing in a handful of markets. But it's coming, right? We can see it's coming. That requires an enormous amount of investment. Lyft, I would say mostly you guys are in the partnership game, sort of across the board. That's how you're operating. How are you thinking about that and how that might affect the drivers in your platform today? Yeah, driverless cars are absolutely coming. No question. And we have got some great partnerships. Everything from May Mobility, which is in Atlanta, which is a relatively small company, to Waymo, which is a very big company. We've said that we're going to be working with them in Nashville next year.

53:25To Baidu, which is sort of the alphabet of China, where we're working together in Europe. So from the absolute biggest to the smallest, yeah, we're partnering. And that makes sense, right? We're good at supplying demand and matching with supply and pricing and mapping and laws and found, customer service, even fleet management. We do that. The other guys don't do that. We have a whole subsidiary that does that, which is keeping the car serviced and cleaned and ready. But we don't do AV tech ourselves, and we're not in OEM. We don't make cars. Okay. So we partner. Now, to answer your question, well, broadly speaking, actually, there will be two big sources of AVs.

54:01Some will be from, let's say, people who have fleets of AVs. Maybe they bought a whole bunch of them and they want to monetize them like that, the big fleets. And then some from individual owners, right? And I really do believe this. And I think this is where the intersection with your question gets so interesting. Today, we have one and a half million drivers on the platform. What are they doing? They are trading two assets they have, their time and their car, for money, right? That's the trade. I put myself in the driver's seat. I drive around. I use my car. I get paid for that. Okay. Tomorrow, you can imagine a world where they can do the exact same thing.

54:42They can buy a car. It's a self-driving car because I think over time, almost every car will be a self-driving car. And they can then flip a switch and make it Lyft ready if we've done our job right and put it on the Lyft platform. What does that mean? That car drives around. It picks people up. It drops them off. It uses all of our mapping and all of our pricing and all sorts of things. It uses our fleet management to make sure it's always cleaned and always charged by the time it gets back to you and then shows up again when you need it again. So I think one way to answer the question is we want to make sure for individuals that they can continue to participate in this gig economy.

55:13It's just that now they can do it in a different way. They don't have to use their time. They can use their physical asset. The second thing is we are – Wait, can I ask you one question about Lyft Ready? Yeah, of course. You just described the same vision for Tesla robotaxis as Elon Musk has described for Tesla robotaxis. He has been less, I would say, clear that the cars would be cleaned when they returned to you. Yeah. Doesn't seem interested. Yeah. Have you talked to Tesla about saying, okay, you've got this big robo-taxi idea. Do you want to put a Lyft app on it and just make this go? So I don't want to describe exactly conversations that happen or don't.

55:44I would say, in general, the vibe that Tesla gives off, I think, is representative of how their company goes, which is we kind of like to do things ourselves. So I'll just sort of say that as a generic thing. Fleet management, you've touched on sort of three things all at once. I think there's a question of what's Tesla going to do? Interesting question. Well, they're the only car company that's selling cars to consumers today that can do what you're describing. Even if you believe that they should or should not be doing it, no one else is selling you a car that can do what FSD can do. 100 % today.

56:17Exactly right. 100%. My view there is they will need some kind of fleet management. You can't, unless you want to push all of this back to, well, first of all, they're going to need a whole bunch of customer service and a whole bunch of other things that people don't sort of think too much about because the scale is so small, right? But as you start to grow and people start to leave their umbrellas, iPhones and the thing, and you got to onboard and offboard, there's a whole bunch of infrastructure. Let's put it this way. Creating a rideshare business is not for the faint of heart. So the first thing that you might ask yourself is, is all of that a good idea for them to spend a lot of energy on, or should they partner with other organizations who are already doing that, which you're kind of asking.

56:53And I'm declining to answer the specifics, but I think in general, it's an interesting conversation that the companies should be having. And then there's then this more subtle part, I think, which is, again, to your point, it's all well and good to think that these cars just magically charge themselves, clean themselves, maintain themselves. But that's not the reality. We have a whole subsidiary called FlexDrive that oversees 15 ,000 cars. We do it today mostly for drivers who don't want to use their primary car. And so we rent them a car. We buy these cars. We rent them the cars. We tell the drivers when it is they're going to need service.

57:27We make sure that we've got sensors on the cars to sort of bring – we know how long it's going to take to service the car, all these different things. That kind of very unsexy fleet management stuff, gosh, it's the difference between profit and loss on an asset. And we happen to be very good at that because we've done it for many years. And so back to your point, I think part of the reason that other companies don't talk as much about this as we do is they don't do it, but we do it. And it's part of the reason why our Waymo partnership in Nashville is, I think, quite interesting. Waymo and us said, gosh, this is really important and you guys do this and do it well, so how about you do it here in Nashville for us?

58:04So I know we've covered like five different things all at the same time there. But I think that's part of the reason is people are not focused on it as much because it's not a capability many companies bring to the table. But we do. Yeah. I'm very curious on the, you know, my car is going to make me money as I sleep. There's a lot there and there's, you know, but one company that can actually sell you that product today. But the rest of it, you know, I always think about it as like, man, this really implies there's a lot of demand in my sleepy town while I'm sleeping for my car. Is that going to work?

58:32Because I actually need my car quite often during the day. I think that's also fair. I think that's also fair. I think for many people, it won't necessarily be their primary car. I think there will be entrepreneurs who go out and buy five cars, just like people buy small fleets today for black car service. And that's probably more likely in the near term. Let me ask you about Waymo real quick and I want to kind of zoom out again. You're Waymo's partner in Nashville. Waymo's partnered with Uber and other markets. Waymo is running their own service in some markets. It does feel, and they're obviously backed by Alphabet.

59:04They've been backed by Alphabet for a long time. They're going to spend a lot of money to win. It just seems very obvious. If you ask Sundar about it, he's like, we're just going to keep spending money because now it's very clear that we're close to winning. They're going to spend a lot of money until they win. They're looking for partners. They're looking to see what winning looks like. You're obviously in kind of a weird competition. You're in a weird kind of bake-off. You're the partner in one market. They're the partner in another market. They've got their own service in yet another. How do you perceive that competition?

59:33Have they told you what winning looks like? I think they're figuring it out. I really do. And I take them at their word. I think a word that they use pretty often is optionality. They have something pretty cool. They've got technology that works about as well as anyone's in the world. Again, I think really only Baidu would be the real competition. I think everybody else is some degree off of where they are. And it works and works well, and people like it. So that's a good place to be. Thus, if you're in that position and you think, well, gosh, I'm not really sure how this is all going to play out, a totally reasonable strategy is, well, let's try a little bit of everything.

1:00:16Let's try doing it ourselves end to end. Let's try partnering in a certain way with one company. Let's try partnering in a different way with another company, and we'll kind of see. You know, when I fast forward, I think a very likely outcome is they will realize, gosh, as I just said, running a rideshare business is quite expensive. And it's very physical. It involves, again, think of the scale. 800 million rides we do every single year. 50 million riders. One and a half million drivers. I know those aren't part of the picture, but someone's got to own those cars. So there's going to be someone else in this picture who's owning these things and wants these things to utilize.

1:00:58If you're Google, do you want customer service? Do you want all these different things that you have to do to operate that service? Maybe you don't mind it in a couple of markets. Maybe it's kind of cool. You can have direct access to your customers and you can do brand building and maybe get some data from it, whatever, whatever, all good. But do you really want to do it in 280 cities around the United States or all around the world? I don't know. So I think a very likely outcome is they will be, you know, frenemies, right? Or what's that? Coopetition or whatever. Like they'll compete in some markets and in others they'll partner.

1:01:29And our job is to be the best partner they can possibly have so that they, over time, give us more of their business and stay focused in their own way in some small number of markets. And that's great. You obviously focused the company. Lyft used to have its own autonomous car division that was sold before you became the CEO. But you have other partnerships, right, that sort of bring you closer to actually making the hardware. You just announced one, a company called Tensor. Yeah. There's some weirdness with Tensor. It used to be a Chinese company called AutoX, and we were told that that all got wound down.

1:02:02Have you ridden in a Tensor car? Do they exist? They do exist. I have not ridden in a Tensor car myself, but colleagues, people on my team have. I'll tell you about Tensor just for 30 seconds. It's a very interesting company. So they are also trying to create, somewhat uniquely in the market, a car that is a self-driving car and a robo-taxi. So in other words, drive me or drive somebody else from the start, right? They partnered with FinFast, which is a Vietnamese company. They have a small number of cars here in the United States. But I think what's the most interesting to them about FinFast is it's a very new company.

1:02:42And therefore, their assembly lines are quite new. They have very modern technology and so on and so forth. They have outfitted their cars like a crazy number of sensors. Everything is redundant. I mean, you talk to the guy's name is Professor Axe, who runs the company. You talk to him, and he'll tell you how important it is to have redundancy around braking, redundancy around steering. He wants this thing to be absolutely bulletproof. The steering wheel literally moves out of place if you don't want the steering wheel there. I mean, it's a very, very interesting product. It's very expensive. It's$300 ,000 or something like this.

1:03:11But, of course, it'll come down. But still, it's really meant to be a very bespoke thing and, as I said, self-driving from the start. He'll tell you about LiDAR and how there are different versions of LiDAR. They've got the best, all this stuff. Okay, why did I go into detail about this? I think over time, and you can see this through history, people start by retrofitting something existing as a way to get started. And then eventually they realize, gosh, this is a new thing. And so therefore, let's create our own purpose-built thing. and i think they just decided in particular we're going to jump over the bespoke or the the kind of the you know take somebody else's and try to retrofit and we're just going to go it's small scale it's super expensive we're going to kind of ride that cost curve down other people obviously waymo's done exactly the opposite they use the jaguar ipace and they're going to move to the the zika zooks is kind of more you know so anyway long long long answer to kind of a particular question but i think tensor is very interesting because they really are kind of our first proof point for the lift ready concept, even though super small, super experimental, but really interesting.

1:04:08And I'd love the fact that they're trying to innovate. When you look at that kind of bet, right? You're describing the big disruptive bet. We're going to take the new technology and we're going to start with that as the foundation of the product. And we're not going to worry about all the stuff that happened before. Sure. That pattern repeats. Right in the middle of that, just to bring it back around, is the driver, right? The idea that lift ready will put a bunch of rideshare cars in people's houses or that it's worthwhile to make a technology bet on self-driving cars in that specific way that Tensor might be making.

1:04:41All of that puts pressure on the driver, right? The logical end state of that is one day there will not be drivers on this platform at all. How long do you think that will be? Many, many, many years. Many, many years. Beyond the sort of work span of 99 % of drivers on our platform. part of it is just basic, you know, laws of physics, like at the Taylor Swift concert or at the end of the NFL game, or even at five o 'clock every afternoon or nine o 'clock in the morning of every day, there just aren't enough self-driving cars. There's certainly not enough riders who only want self-driving cars, right?

1:05:16A lot of them just want to get where they're going fast and therefore, and cheap. And therefore I don't really care whether it's a robot or not, but I don't really want to wait for 15 minutes when I could wait for two minutes for a human driven. And then there are people who want help with their luggage. And then there are people who want to have the conversation. And then there are people who just don't like technology. So there are all sorts of reasons. And then there are regulatory things, and then there's snowstorms, and then there's ice pellets and all kinds of things. So there are a billion reasons why in the near term, the hybrid network is the better approach, supply and demand, all those things.

1:05:47In the medium and long term, right, there will be fewer drivers as a percent. But remember, 160, let's just remind ourselves of just this crazy fact. So today, as I say, we do 800 million rides. Maybe the other guy do 1.5 billion rides. So maybe two and a half billion rides between the two of us every year in ride share in the United States I'm talking about. Okay. What's the total number of rides that people get in the car and drive themselves? 160 billion a year. So 2.5 billion, 160 billion. So there is a lot of room between 2.5 billion, 160 billion for us to continue to grow and expand and have more drivers in the platform.

1:06:23And by the way, like all the estimates around the number of self-driving cars by say 2030 are like 30 ,000. Okay. 30 ,000 is a tiny thing. We have 1.5 million drivers on about 30 ,000. Now they're working 24 seven, high efficiency, high utilization. So it's not apples to apples, but still. So that's again, sorry for all the verbiage there, but it's a way of saying, I think the hybrid network dominates for a long hybrid meaning, some driven by humans, some driven by autos, by robots, dominates for a long, long, long time. And I think by the time we get to a point where there are relatively smaller number of drivers than there are today, gosh, I think we're talking about, you might as well think of it as a generation.

1:07:02I don't mean 25 years, but I mean, most people who drive on the platform don't do it for more than three, four or five years type of thing. At that point, it'll be a whole different world. And then the last thing I'll say is I mentioned as sort of a joke at the beginning, but not really the car tender idea. Like, I think there'll be fun things that people are going to be doing in the cars that are not just driving. It's making drinks. It's telling stories. It's being the local guy. It's, again, helping you with the luggage. It's doing all kinds of other stuff that drivers do today kind of on the side.

1:07:29And now, I don't know, it's just being a, I don't know, who knows? Are you going to expose that sort of driver individuality, right? I mean, you could do it from the top down, right? You could say, well, you're all bartenders now. We're new and old fashions in the car. And maybe the platform will support that. Maybe the ecosystem will support that. But, you know, the other thing I've heard from drivers, you know, sometimes you get into a Lyft and the driver has set up 15 charging cords and will let you play with the music. And sometimes it's just a guy in a Camry and there's no rate differential there.

1:07:58Like the extra effort is not rewarded. Are you thinking of, I mean, they're essentially it's commodity, right? The point of the platform is to commodify the service. Do you think you're going to let the drivers decommodify in that way? I do. I really do. And I think, look, we just announced two days ago, I guess, the acquisition of a company called TBR, which is a very, very high-end, ultra-luxury, chauffeur-driven service. It's for non-deal roadshows and Super Bowl events and stuff like this. It's a very, very bespoke thing. But one of the reasons we did it is because the level of service that they provide is unbelievable.

1:08:34And gosh, can we learn a lot about it. And there, the drivers do all kinds of interesting things, right? I mean, they'll get you your coffee before you get in the car because they know that you like a latte and not a flat white. And then when you spill the coffee on your shirt, they'll pick the new shirt up while you're in the meeting so that it's ready for you when you come out. And they've already called the next person saying, we're going to be two minutes late because the guy's got to do something before he gets there. So I'm not saying you can provide that level of service to every single person 24-7.

1:09:04But I think the idea that, and so I mentioned briefly before this notion of inshittification, you know, a service that starts out amazing and then kind of gets a little bit less so over time. I think rideshare for so long has been caught in this kind of binary of, you know, us versus the other guy and very competitive focused and everything's a commodity and everything's about cost and so forth. And I think over time you get to the point where it's like, that's no longer interesting. What's much more interesting is the next 160 million rides that people are taking in rideshare that they're not today.

1:09:34And how do you let that driver show up in a way where they become different from a robot, not just sort of a robot with a human robot, a flesh robot? So, yeah, I think there's a lot. And then the question is, how do you do it at scale? And how do you do it in a high-quality way? And how do you do it in an economic way? But those are what, aside from self-driving and all the rest, the human side is what makes this industry so interesting. I do have to offer a plug here. Corey Dottra, who wrote a book called Uncertainification and coined the term on Decoder very soon. You can hear him talk about that.

1:10:03Oh, fantastic. I'm a fan. Ask him about it. He actually came. So I sent him a little note after I wrote this. So I wrote about a certification last year. I got introduced to Corey. He actually came to the office. He at the time said all kinds of nice things. So anyway, he's a good guy. I hope you have a great conversation. It's Sarah Jong on my team who did it. But she's smarter than me. So they had a great conversation. Both of them are. That's just the way it goes. Let me ask you just one question about the curve here, and then we can wrap it up. You're saying sort of in the aggregate that attrition will solve this problem, right?

1:10:33Right. Drivers will graduate off the platform. They'll find other work or they'll retire, do whatever they do, and they'll go. And as that happens, robots will come online and you'll find some sort of happy medium. Right. Like that's that's broadly the plan. We're not going to replace a lot of drivers. Drivers are going to graduate. Robots might replace them. Some other drivers might replace those. Who knows? That's the time. That's the long horizon. And I can see how that might work out in the short term. what I hear very directly is, oh, the robot cars have come to my town. Now the demand is moving away from this platform.

1:11:07I'm waiting around for even more rides than I was before, right? Or the dynamics have changed or the rates have changed and it's very individualized. And it's hard to make an argument that says, well, you know, look, one day you're going to retire. But you don't get to make the long-term argument to the driver themselves when they are faced with the threat of autonomy. How do you make the argument to the individual driver that this will be good for them? Yeah. So two things. I mean, I think first, and we look at this data a lot, I would say that the stories you just told is not really supported by the data.

1:11:34In other words, for example, we are growing, Lyft is growing faster in markets where there are ABs, even when we're not participating in the AB, faster than average. So our average growth rate is called 15%. We're growing faster than that in places like San Francisco and Phoenix and places like that. So I think there's sort of a false causality where people see a self-driving car and they're like, oh, I didn't get a ride today, and that must be that. But that's actually not really the case. In general, self-driving cars actually expand the market. They actually oxygenate the market in new ways, bring tourism and all kinds of things.

1:12:08So point two, however, that's just data, which isn't necessarily going to convince anyone who's feeling this. Okay, so let's talk about the feeling side. We are being really very active in this. We have a whole driver roundtable thing, and the whole topic of that, we bring drivers together, we just did it again last month, we're doing it in different parts of the country, is let's talk about what happens when AVs come to town and how you're going to be okay, how we're going to collectively make something that is okay for you. I mentioned this part very briefly before, but I'll come back to it.

1:12:37One of the things I am super excited about is this driver accomplishment letter that we now let drivers create for themselves. So once you've driven a certain number of rides on the platform, you can go in and, thanks to AI, push a button that says, you know, David started driving in, this is actually true, I drive for Lyft. And I think my first drive was on April 13th or 14th of 2023. So anyway, he's been driving since April 2023. He's one of our top, now this part I'm making up, 5 % drivers. He's super reliable. Here are a couple of representative comments. I would recommend David for any service-oriented business he might have.

1:13:16And that credentialing, because what drivers are in the service business. So I think one answer to your question is not just let's wait for attrition, but let's help drivers who want to use this as a sort of mobility thing. By the way, remember that thing I just talked about with TBR, the company we just acquired? Those drivers make quite a lot of money, quite a lot of money. And so to the extent that you want to drive up in the ecosystem, black and sort of higher level, that's another possibility too. And that ain't going away anytime ever. No robot takes the place of the chauffeur that gets you coffee.

1:13:48So I think it might sound a little vague, but all I want to say is this is not something we're just saying, oh, too bad for them. We're actually saying the opposite, which is how can we help this transition happen in a way that feels orderly? Yes, how can we share the data of what's happening, of course, but also how can we help drivers to transition. And by the way, maybe we can hire them in customer service. This is something we talk about all the time is all of our driver customer service folks. How cool would it be if every one of them were ex-drivers as an example? So I think there's some answers to this question.

1:14:21Yeah. Well, David, this has been a great conversation. I'm excited to have you back as more and more of these things develop. What's next for Lyft? What should people be looking at for? If you look maybe six months ago and then six months from now, six months ago, we were only domestic. Now we're an international company. We acquired a company called FreeNow in Europe. which is awesome. So now when you go to Europe, actually, and you open your Lyft app, you'll get a note saying, please download the free now app. There's our partner. Over time, that'll just be the Lyft app. So that'll be wonderful that we'll be able to operate in Europe kind of natively.

1:14:51If you're a United customer, you're soon, very soon, going to be able to open up the Lyft app and get points from United Airlines. So put that in your cap. If you're a CEO, soon you'll be able to use TBR as part of the kind of overall Lyft ecosystem. So a couple of very obvious ways where we're, you might say, expanding out and expanding up, right? Up in terms of sort of demographics and service level, out in terms of geography. In more and more markets, you're going to be able to take a self-driving car on the Lyft platform. Today, you often do it off platform or on somebody else's platform. So that's super exciting.

1:15:23All those things are kind of near term. I think if you look medium and long-term, I'll come back to the beginning. Our purpose is to serve and connect. And this is almost more of a philosophical thing than a company thing. You know, every minute you're spending, you know, watching Netflix at home, every minute you're spending, you know, getting, you know, food delivery. It's awesome. Those are great experiences. But gosh, do I really want to be a helpful force in your life to also make sure you're connecting with people and getting out and about and experiencing the real world. And so as you look over, you know, two, three, five years, you should expect Lyft to become, I hope, you know, more and more helpful in that part of your life as well.

1:15:59Terrific. Well, I'm excited to get a ride in a Tensor car very soon. Awesome. It just, it looks crazy. I just want to see one in person. It's insane. I'll have to have you back. Yeah. It's insane. Thank you so much, David. Yeah, it's been a huge, huge pleasure. Thanks so much for the time and the questions.

1:16:15I'd like to thank David for taking the time to join Decoder, and thank you for listening. I hope you enjoyed it. If you'd like to let us know what you thought about this episode or really anything else at all, drop us a line. You can email us at decoderatheverge.com. We really do read every email. Or you can hit me up directly on Threads or Blue Sky. Also, if videos are a thing, we're on YouTube now. You can watch full episodes at DecoderPod on YouTube. We also have a TikTok and an Instagram. They're at DakotaPod as well. And they're a lot of fun. If you like Dakota, please share it with your friends and subscribe wherever you get your podcasts.

1:16:41Dakota is a production of The Verge and part of the Vox Media Podcast Network. Our producers are Kate Cox and Nick Stat. Our editor is Ursa Wright. Dakota Music is by Breakmaster Cylinder. We'll see you next time.

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