Lyft CEO David Risher on comebacks, customer obsession and moonlighting as a Lyft driver

9:38Kristin:Can everybody say that? No?

9:40Diane:Well, you know, a lot of people say it. Very few people do it. Very few people do it. And what I mean by that is they get confused. They start to focus on their investors or they start to focus on some pet project or they start to focus. And what they don't do is they don't do the type of work I'm talking about, like actually getting in the car and driving and understanding what a customer wants. I'll give you a driver example. So our drivers, drivers on the Lyft platform, of course, drive to earn money. But one of the things that really frustrates them is when they make too little versus what the rider pays.

10:09Kristin:Right.

10:10Diane:Last year, we put in something called a 70 % earnings guarantee. It means over the course of a week, drivers will never earn less than 70 % of what riders pay after fees. Never, ever, ever. We literally spend millions of dollars on this feature because we rebate money when people, you know, when you kind of underperform. Yeah. That has been a game changer. We now have a 19-point advantage over the other guys in terms of driver preference. So to get back to your question, if we want to develop the best possible service product, the highest level service, we have to implicate our drivers. We've got to figure out things like, you know, why do drivers cancel sometimes or why do riders occasionally get very frustrated with how long it takes, whatever, and just work it, work it, work it, work it.

10:46Diane:What's been the result? We've moved from not profitable, money losing, you know, losing share to we're gaining share now. We're above 30%. We're at 26%. We've got more riders. We've got more drivers. We've got this big, and then we're making money. So that's how it works.

11:01David Risher:David, I want to bring up a term. I had never heard this term before, but I read your 2025 shareholder letter, and I wrote this down because I thought it was so interesting. The word is and shitification.

11:11Diane:Yes.

11:12David Risher:Tell me about what that means in the context of your company and to Diane's question, how you're trying to battle these other people out there.

11:20Diane:So one of the curious patterns that you can see if you look around is new stuff tends to start out great. It's a new app that all of a sudden works great or new piece of hardware. Everyone falls in love with it. And then over time, generally, almost gravitationally, it gets pulled down to getting worse and worse and worse. And you can see this a little bit with Rideshare, what used to be a very elevated experience, and now it's not always. You can see it sometimes today with some of the ways that companies are trying to sort of push AI on you. And you're kind of like, I didn't really ask for this.

11:51Diane:But there's competitive pressure. There's profit pressure and investor pressure, all sorts of pressures that tend to kind of pull things down. And so my view is like, I want to be the anti-gravity device. I want to pull things up. I want to de-inshitify. This word inshitification was coined by Cory Doctorow. And he kind of notice the same pattern over many different things. So anyway, the nice thing about what we've done is we have really elevated the experience. Again, like if you look at how our riders talk about us today versus a couple of years ago, it's a significant difference. And I feel like we're just getting started.

12:21Diane:That's how we're going to keep going.

12:22David Risher:Is it basically, and explain the concept a little more, is basically like you don't want to build too many or spread yourself too thin or build too many different things?

12:28Diane:Ah, so you're getting into how do you do it. Yeah. Yeah. So the first thing is you identify. You say, okay, like we're just not satisfied with our level of service. And that's a hard thing to say for a service company. We're not satisfied. We think we're just not doing well enough. And then you start to take a problem and you start to break it down. So let me give you an example. When I started, we had a driver cancellation rate of 15%. So that means 15 % of the time that you as a Lyft rider opened up your app, you would match with a driver. And then 10, 15, 20, 30 seconds later, you would see this super irritating thing where it said, your driver's canceled on you.

12:59Diane:We're fine.

12:59Kristin:I thought that was just because my score wasn't high enough.

13:02Diane:That's the funny thing. People start to personalize it. They take it And later we'll find out why from doing this. Yeah, in your case.

13:07Kristin:My score is pretty high.

13:09Diane:Well, this is the thing. It's not that. I mean, if they didn't want to pick you up as a rider, they probably would have done that up front. But that's typically not what happens. They get another ride or they didn't know how much money they were going to make. Any number of different things can happen in that process. And so we've worked just so diligently to look like what's happening here. Some of it is literally what information are you showing the driver? Are you showing it 10 seconds before they drop off their last passenger or five? Because if it's 30 seconds before, they'll hit it mindlessly.

13:34Diane:And then they'll look after they do the drawback. If the font isn't big enough, they won't be able to process it. If the information about how much they're going to earn isn't there, they're not going to know. And so they'll say yes, and then they'll count. So anyway, we just take thing after thing after thing after thing. And now we're at 4.5%. So from 15 % to 10 % to 5%, now we're under 5%. But it's just, frankly, it's like so much, you know, the physical world is complex. The digital world is complex. The physical world is complex. You put them all together, as we have to do, and it's very complex.

14:05Diane:So you just hit it over and over and over again, and that's how you make a difference.

14:08Kristin:You know, I want to say the word incentivification because I want to say it too. But, you know, I thought you'd maybe coined it because one of the people here at this conference is Hayden Brown of Upwork. And she mentioned that you had created an app. And you're somebody who's really into spelling bees. You're obviously education. I know that's part of your background. Yeah. Talk a little bit about, first of all, I want to, you know, what is it about spelling bee? Tell us more about that. because I think it says something about the way you discover things and how you like to lead.

14:38Diane:So, okay, this is a kind of a funny story. I mean, one thing you might need to know about me is I was a comparative literature major. I'm a reader. I like language. I like stories. The Lyft story is, I think, going to be one of the world's great comeback stories. I'm really excited about writing that story with our team. But I also like word games. And we were talking about crossword puzzles we play crossword puzzles but anyway there's a uh uh an app called spelling b in new york times many people are obsessed by it i got this crazy idea a little over a year ago that i wanted to create a version of it it's kind of the opposite so instead of having to use all the letters you couldn't use the letter in the center so if you play the game you kind of know what i mean opposite the anti it's the anti so i call it contra b which is not a beautiful name but what are you going to do anyway and then i got really into the reason that hayden and i were talking is I said, I can't develop this myself, but I want it to exist.

15:28Diane:And so I used her Upwork platform to contract with some developers in India. And it took over the course of a month. And, you know, obviously I have a day job, right? So I would kind of do this, but luckily time zones

15:38Kristin:are - Driving a car too. Let's not forget that now and then.

15:41Diane:I got a lot going on. But anyway, luckily, you know, I don't sleep so much. And so anyway, so I did it kind of the morning and evening, which is when also India is away. And over the course of about a month, I created it. It's called Contrabee. You can download it in the app store. There's also a web version. And hundreds of people use it every day. And I get the nicest notes from people. Oh, my God. You make my day every morning. I'm so glad you do what you do.

16:02David Risher:OK. So, David, that begs two follow-up questions from me. Number one, what are your other side hustles you got going on?

16:09Diane:I do have other side. The one, I do a philanthropic thing called Half My Daft. Let's talk about that separately.

16:15Kristin:Half My Daft.

16:16Diane:Yeah. It's a whole separate conversation about trying to get people to give more money away. But the thing that I'm actually very passionate about also is it's called Tomorrow Sellers. and it's a non-alcoholic wine. I won't go into detail about this, but Lyft's sort of like our basic guiding principle, our purpose is to serve and connect. I want to serve riders and dryers better than they've ever been served before. And I want to connect people because I think connection really, really matters, particularly today when we're also, you know, sort of dissipated and all this. And I think wine can do the same, but a lot of people want to drink less wine.

16:46Diane:So tomorrow's cellar, we've got a great red, a great white, great sparkling.

16:49Kristin:Do you drink wine or do you drink, are you?

16:52Diane:It's called zebra striping. I do. I sometimes on some nights I drink regular wine. Sometimes I drink non-alcoholic wine.

16:58David Risher:I like that. And then the other question I had for you is you mentioned this, you wanted to talk about the Lyft comeback. So what does that mean exactly? Because you're two years into the job. What is the comeback you're seeing?

17:10Diane:So, you know, let's back up for, you know, a minute here. Again, when I took this job on, the company, which had been such an early innovator, had a little bit lost its way. Just a little bit. It was trying to do a lot of things. It was losing some share. And it just lacked the focus and, frankly, wasn't growing profitably. In fact, it wasn't making any money at all. And so now you have this very interesting situation. You know, almost a billion dollars of free cash, a profitable company growing again, and one that customers are really kind of falling in love with again. And so we have a whole new campaign, actually.

17:42Diane:In fact, it just started today called CheckLift. And I want people to give us another try, check us out again. And what my hope is, is you're going to see, as I say, a comeback that just looks like it's for the ages.

17:52Kristin:Do you have any sense of the demographics? When you say checklist, you're talking to two people who use Lyft. Kristen, partly for the built relationship, right? Is that fair to say?

18:03Diane:Great. Love it.

18:04Kristin:Honestly, I just find it to be a better service. And I feel like you do pay more attention to drivers, which matters to me. So have you noticed any different demographic shifts in terms of who really is coming back to you?

18:18Diane:So I love that question because I think different people, you know, ride share, it is a big industry. I mean, remember, just to scale it, we're doing 2 million rides a day, 800 million rides a year. We have 50 million riders a year and 1.5 million drivers. So it touches a lot of different people. And you're right, different people use it for different reasons. I would say, broadly speaking, younger folks tend to be very partnership focused. A lot of the times, if they're BILT members, or we have a partnership with United Airlines, or if they're Chase, Sapphire Reserve, any of these things.

18:49David Risher:Also one of those, yeah.

18:50Diane:There you go. So a lot of people really like kind of getting perks, and you can get great perks on Lyft with BILT, which you're a member of. You can also pay with points on there. On the other end of the spectrum, we just started something called Lyft Silver, which is for older folks, people like my mother before she passed away. hey, the conversation about taking car keys away from your parents is a terrible conversation.

19:10Kristin:You take their car keys and go, here, mom, here's an app.

19:13Diane:Well, here's the thing. Here's an app purpose-built design to get you out and about, and it's simplified, and the cars are bigger, and customer service is one click away, and all these things. Hundreds of thousands of people are now responding to that. So when you think about demographics, it's not necessarily one coming at us. We have a couple of different groups that we're really trying to bring back on the platform.

19:32Kristin:Can I ask one fault? Why wouldn't everybody want a simpler lift? What's unique about being old? Why wouldn't I want to press one button?

19:40Diane:I'm young. You're so right.

19:42Kristin:So what's so unique about that?

19:45Diane:You know, I'll tell you a funny story about that. There actually are younger people who turn on lift silver, and they're like, oh, I love this. This is great, two buttons. But you do lose out, right? So you don't get to choose lift black if you want an elevated experience or extra comfort. Priority pickup isn't available. So, I mean, there is a trade-off. But for most people, again, who are sort of later in life, they're kind of like, I'm good. I don't need more choice in my life. Take time on their hands.

20:07David Risher:Yeah.

20:08Diane:I just want to kind of get where I'm going, and that's good for me.

20:10David Risher:Okay. Well, speaking of choice, how do you convince on the driver side of things? Because they're also going for a bunch of different platforms. Yeah. How do you convince them to stick with you as opposed to going to Uber or another competitor?

20:22Diane:Yeah. So this is one of the big focuses I had right from day one is saying in every car, there are two customers. There's a driver and there's a rider. and we're going to focus on both of them. So for the driver, people drive for different reasons. Some people have lost their job and 24 hours later, they're making money. Some people are doing it as a side hustle. Maybe they're starting a small business. I actually picked up a guy who's starting a restaurant and he was like, restaurants are hard to start, so I need some stable income. Some people are doing it to stay active. I meet plenty of older drivers who say, yeah, often they're older guys and they're like, yeah, I got to get out of the house because my wife needs to get me out of the house.

20:57Diane:So people drive for different reasons. But in the end of the day, if we are really focused on what each of them needs, we can get them to stay on the platform. So for example, if people are driving to earn, as I say, we have a 70 % earnings guarantee. Super important. If people are driving almost sort of for the perks, a little bit like we were talking about before, we have a whole loyalty program that allows you to get points and turn them into Walmart gift cards or turn them out into lift cash. So it's just like anything else. If you start to think of folks as really your customers, not just service providers, but customers.

21:24Diane:You start to figure out what they want, and then we just design product after product for them.

21:28Kristin:We've seen this shift both in policy, and let me go back to the drivers. This push to unionize, for example, and who's a gig worker, who's an employee. Give us an update on that, because obviously it varies state by state.

21:45Diane:It does.

21:46Kristin:And what's the state of the nation on that right now?

21:49Diane:So I actually think it's nice to sort of back up on that a little bit. Almost at a generational level. Like when I was growing up, looking at my parents, my parents would take a job and they were in it for years. My father was a lawyer at one firm for many, many, many years. When I was growing up, it was more sort of, you know, you take a job five to seven years and maybe you do something else, something else. Today, a lot of the people today in their 20s in particular are doing something, you know, and they'll assemble a couple of different things, you know, and something on the side. It's more like it's almost a job that works for them.

22:18Diane:A portfolio career. A portfolio career. Exactly right. Okay. So once you get your head around that, then you realize, okay, if that's what people want, you've got to have opportunities like gig work, which has literally like you can be working 24 hours from now. You don't have to call in sick. You just don't show up. You don't have to call in when you want to take a trip to Colorado to see your friend. You just don't show up. You don't have to clock out to pick your kids up after school. You just do, you know what I mean? Like all these different. So that is happening and millions of people are using it every year.

22:47Diane:But laws take a while to catch up. And still a lot of lawmakers for some time had in their head, this doesn't feel like work to me. This feels like some different thing. But really, state by state, little by little, a lot of people are starting to say this is the way millions of people are making money on their own terms and doing it in a way that really works for them. And so now, of course, there's still some states who are kind of like, we want to make a big deal of this. But most states are at the point where they're saying, we understand that these are gig workers, these are independent contractors.

23:13Diane:And now our job is to figure out how to make it as compelling a way to earn money as we possibly can? What benefits can we offer? What perks can we give them? How can we get to the point where driving for Lyft is almost something that you want to do to both make money and also get experience? I can tell you about that too if you're interested.

23:30David Risher:David, I want to shift to your background a little bit because I think it's fascinating. You were at Microsoft, you were at Amazon. There is still a letter from Jeff Bezos on Amazon's website thanking you for your work at Amazon, which is wild. That doesn't happen often. Tell us about some interesting moments you've had with Jeff, with Bill Gates, and what you learned from them.

23:50Kristin:Can I step back one step further? You're at Microsoft, and you're telling, do you tell Bill Gates that, you know, I'm about to go work for this tiny startup? Because you were there very early on. And then to Kristen's question, of course.

24:04Diane:Yeah. I mean, people talk about careers like there's this sort of master plan. And, you know, for me, it's been a little bit more of making choices that really felt like they kind of fell between, you know, something I was super, super interested in doing and something I thought I might be pretty good at. So I was at Microsoft in the 90s. Absolutely wonderful time to be there. You know, it was a Windows time. And, you know, Bill was still running the company. By the way, I happened to meet my wife there on the first day. So it was very, very meaningful for me in many ways. Yeah, we just passed our 30th wedding anniversary last week.

24:34Diane:So thank you. So anyway, incredibly formative time and a very, very competitive company. And so I learned a lot about competing, including from Bill. Of course, I didn't work for Bill, but his DNA was everywhere on the company. Diane, you're referring to something very funny, which is that when I took a phone call one day from a guy doing a reference check, it happened to be this guy named Jeff. He was starting this tiny little bookstore online, and he was doing a reference check for somebody. And so we got to talking, and one thing led to another. And eventually, a year later, I decided to throw my hat in the ring for a job of his and decided to leave Microsoft to join Amazon.

25:07Diane:It was back in 96. So I walk into Bill Gates's office. Bill Gates calls me up. He sends me an email. And he says, this is crazy. What's going on here? So I go into his office. And he says, hold on for a second. You're being successful at Microsoft. Things are going well. You mean to tell me you're leaving this company for some tiny little internet bookstore that nobody's ever heard of? That has got to be the stupidest decision I've ever heard anyone made.

25:29Kristin:Said the man who started a company. No, I'm just kidding.

25:32Diane:Well, I mean, here's the thing. He wasn't entirely wrong. It wasn't an entirely rational move. But I sort of figured, gosh, I'd done well at Microsoft. I thought I had some skills to bring to this new bookstore. I'm a reader. I like reading. Jeff is a pretty inspiring guy. Just felt like all was going to work out okay. So anyway, that was that. I joined Amazon back. I was the 37th employee. I think something like this. I was the guy in charge of building a music store and a video store and a toy store, trying to create the everything store. I did that for many years. Then I taught at the University of Washington.

25:59Diane:I'd always been passionate about teaching in the business school, and I loved doing that. Then my family moved to Barcelona. Now I'm going into too much detail, but I lived there for a period of time, learned Spanish guitar, learned how to speak Spanish in Catalan. Then I traveled around the world with my family for a year. We were our kids' teachers. And then I started a nonprofit called World Reader to get kids reading using digital technology. And we got up to 20 million kids reading on the platform. And then I joined Lyft. So my career makes no sense at all, but there are some through lines around technology and big scale, trying to do ambitious things, and frankly, getting in sometimes pretty early and trying to do ambitious things.

26:34David Risher:What did Jeff say to convince you to come? What were the words that really motivated you to make the switch?

26:40Diane:So that's a great question. He, a couple of things. He was very customer obsessed right from day one. This wasn't some add-on later. And part of what I think maybe had distinguished my career at Microsoft had been, I was the customer guy. I was the voice of the customer. So hearing his enthusiasm about that and how important it was to the business model, right? He was like, look, on the internet, everyone is one click away from somebody else. So you have to create a customer experience. So that was very interesting because it hadn't been created, right? I mean, an online bookstore, what does that even mean?

27:11Diane:So anyway, the idea of designing and creating that was very, very appealing. And then the second thing he said, so this was at the time when I was interviewing, it was a$15.6 million store. So it was a relatively small business. And he said, this was in 1996, he said, I think if we do everything right, by the time we're at the year 2000, we'll be a billion dollar business. And I found that also very compelling because I thought to myself, how often do you get to be at a company that's right at this crazy intersection of technology and culture and all these different things and build something that could be a billion-dollar company.

27:41Diane:By the way, we got there in 1999. By 2004, I think we were at a$4 billion run rate and on and on and on. So it was really quite a rocket ship, which is always a fun thing to be on. But that building of something that hadn't been built before at that scale was really very exciting.

27:56Kristin:Which begs the question, because you're one of the few people who's gone from big to small to big to small. So you went from a relatively small nonprofit to Lyft. So how is it to manage one versus the other?

28:09Diane:This is such an interesting thing. So as you said, yeah, I was at Amazon when we were a multi-billion dollar company. And then I started this tiny little nonprofit. And we got to$10 million, but it's still very, very small in the grand scheme of things. What was big was the impact, 20 million kids reading. That's big. But the dollars are small. What was so interesting about joining Lyft is I expected it, and this will sound very strange, I expected it to be much harder than running the nonprofit. I really did because the scale is big. It's a public company and all these sorts of things. What I actually have found was the opposite, that running a nonprofit, because you have to do two things.

28:45Diane:You've got to be really good at driving impact. Otherwise, you have no purpose in life. You've got to be really good at fundraising because otherwise you run out of blood, like it's no oxygen, like nothing. You've got to be really good at attracting and retaining really good people because guess what? If you don't have good people, you can't do anything. And they all have better offers where they can get paid more. Yeah, they can make more money also. Always. So you have to lead with purpose. Let's say it's sort of like going to the gym where you exercise every muscle really, really hard. I'm not saying that for-profits are easy.

29:15Diane:I'm not saying running Lyft is easy. It is not. But it's still the same 24 hours in a day. So I can't work any harder. It's the same amount of hours. and the intensity I bring to it is high, but it doesn't always feel like, oh my God, like we're going to run out of money the day after tomorrow and I got to fundraise. It's interesting. I would say, you know, you take, and I don't want to cast shade on anyone, but you take your average Fortune 500 CEO and you put them running a nonprofit for, you know, 18 months, they would go screaming out of the room, screaming out of the room.

29:42David Risher:That is a warning for everyone out there who might be trying to do that. Yeah. But as you said, Lyft also isn't easy. Yeah. What's the hardest decision that you've made a CEO?

29:53Diane:Oh, gosh.

29:57Diane:I'll answer it in two ways. The first way general, the second specific. The general thing is every problem at the end of the day that you run up against is a people problem. If you've got demand, if you've got a good strategy, if things are moving forward and so forth, it's always people. There's always a problem. And so anytime you have to change a person's role. Fire them, of course, that's terrible. But even change their role or maybe even promote them, but wonder, are they really ready? And am I promoting them too early? And then I'm setting them up to fail. All those decisions are hard. They're just hard because you know it's way beyond just business.

30:34Diane:It's personal. That's a whole class of problems. The specific problem or issue that I had the hardest time with was actually saying no to a product that was already out there. And this sometimes happens. Sometimes you develop something with the best of intentions, and it just doesn't work. And it's hard because it's almost like it's your baby or whatever it is. What product was that? So the product never really had a very good name, but the concept was you landed in a plane, and as you landed and turned off your Lyft app, turned it on, we would automatically fire off a ride request. So by the time you got out to the curb, the ride would be there.

31:13Diane:Internally, we sometimes called it Touchdown, which we thought was a fun name, but we never really came up with a very good name externally. It just wasn't reliable enough. It wasn't reliable enough. There's too much that can happen.

31:21Kristin:Anyone who flies in the JFK or LaGuardia knows you're not at the curb five minutes later.

31:25David Risher:Yeah, just thinking that. JFK, you never know.

31:27Diane:You just never know. That's the problem. And even though we did all sorts of clever things with GPS and all sorts of different things, there's just too many variables. So we couldn't create a customer experience that was reliable enough. But it was very frustrating because I love the concept and I really want it to work. But I also had to say, you know what, guys, it's just not good enough. We have to take this one down.

31:43Kristin:Let's look around the corner for a second. You're doing driverless cars. You know, I met May Mobility's here. You're going to be doing something with them. Of course, you've expanded into Europe more with your acquisitions, including working with Baidu, which, of course, is fascinating in this geopolitical age. Give us a sense as to what are you excited about that you want us to be excited about because there's so much going on in the space that you're in.

32:08Diane:I actually think driverless cars is exactly it. And I think it's so interesting because I think like so many things, it's hard to see the future, right? Let's just stipulate that. But in this case, not so hard. You know cars will eventually get very good at driving themselves. They will be safe. It'll happen over time, right? So that you know with 100 % certainty. What you don't entirely know and what the world doesn't entirely know is, is this going to be good for our business or terrible for our business? I happen to be a huge believer it's going to be great for our business. Why? It's a good product.

32:39Diane:It's safe. People like it. Sometimes it's nice not to have the driver in the car. Deal for lift silver. Yep. Oh, absolutely. Sometimes older people will want it. You know, it's all these sorts of things. So that's interesting. At the same time, it's going to be disruptive, right? New players will be brought into the market and so forth. So what I like about our position is, you know, we've got millions of ride requests every single day. We understand the technology very well. We certainly know how to match up supply and demand 24 hours a day, seven days a week. We know how to manage fleets. Like, we've got all the skills.

33:07Diane:But there's no guarantee it's going to be good for us. It's just, however, here's what I'll say. What I've seen is in the markets where there are autonomous cars, they are actually growing faster, faster than the markets where they're not, where we're operating. So that gives me a lot of hope for the future. I think our costs will be lower, lower insurance rates and so forth and so on. I think our service quality will be even better. And I think it will take us from maybe a couple percentage in total of the overall market between us and the other guys to maybe double that and double that again as we bring more onto the platform.

33:35David Risher:Dave, we're coming to the end of our time here, sadly, but I have a fun one for you. Yeah. If you could, you know, dream up any product to roll out at Lyft, wildest imagination, what would you want? What would it be? What's the David dream?

33:49Diane:Oh, man. To the moon. Yeah. I mean, gosh, this is where I get in trouble because, of course, then the team starts to go work on it. So let's create something that is actually physically impossible just so no one is tempted to actually start it just that. But it can be a vision. it will be very cool one day where your car can literally go 3D, get off the road, fly over the other cars and plop yourself right down there. So you can go multimodal. That's going to be amazing.

34:19Kristin:I look forward to that. Yeah, that sounds great. Thank you for joining us. Thank you, David.

34:24Diane:Yeah. Thank you guys so much. That was a lot of fun.