Lyft picks up a new CEO

Hi folks, it’s Brad in San Francisco. Lyft is getting a new chief executive officer as the ride-sharing pioneer loses market share and field [View in browser]( [Bloomberg]( Hi folks, it’s Brad in San Francisco. Lyft is getting a new chief executive officer as the ride-sharing pioneer loses market share and fields questions about its viability. But first... Today’s must-reads: • Musk takes another step toward making Twitter [a two-tier system]( • Biden is [cracking down on commercial spyware]( • Apple’s CEO [talked about supply chains in China]( The nicer Uber The story of Lyft Inc. contains many lessons for entrepreneurs and students of tech startups. The company, originally called Zimride, started out in 2007 arranging long-distance carpools for college students, then renamed itself in 2013 as it pivoted into smartphone ride-hailing, being popularized at the time by a rising startup called Uber. But while Uber had an elitist proposition back then, allowing users to hail drivers of luxury vehicles who owned taxi-licenses, Lyft’s idea was far more egalitarian and disruptive. Co-founders Logan Green and John Zimmer envisioned that any driver could sign up and start earning money to ferry around passengers in their own vehicles. Thus, over the strenuous objections of Uber, which originally tried to sic regulators on its smaller rival, the age of so-called “ride-sharing” was born. Those idealistic beginnings ended up permeating the entire life and culture of the company. Lyft was always the nicer ride-hailing app, the more palatable alternative. Uber’s CEO Travis Kalanick got embroiled in high-profile leadership scandals while his firm stomped on transportation regulations around the world and became the target of bitter animosity from taxi drivers. Lyft’s co-founders, the pensive Green and his more voluble deputy, Zimmer, who yesterday [both stepped down at the company](, tended to stay in the background and took pains to not antagonize regulators. Even when Zimmer wanted to get himself arrested in New York in 2014 in an effort to change the city’s draconian ride-hailing restrictions, company lawyers dissuaded him from kicking up that much of a fuss. But that cautiousness may have hurt the company in the long run. Lyft innovated in many areas – not just ride-sharing but adding carpools within cities and the ability to rent e-bikes within its app. Uber quickly copied those features, then ended up drawing more attention for them. Lyft was also far more careful with its fundraising and expansion. It resisted growing beyond North America and never moved into food-delivery – two businesses that together account for the majority of Uber’s revenues. Since the onset of the pandemic, Uber has moved even further toward becoming a super-app, giving customers the [option to rent a car](, [ship a package]( and even [charter a bus](. Lyft has stayed mostly in the ride-hailing lane at the expense of hooking more new users. There’s other evidence that Lyft was stalling. Since it went public in March 2019, Lyft has never reported a quarterly profit and its market share is declining. According to data from Bloomberg Second Measure, Uber accounted for 75% of the US consumer ride-share sales at the end of February, while Lyft had 25%. That’s 8 percentage points lower than its market share in February 2020, right before the pandemic. Meanwhile, fares are creeping up: On a per-mile basis, Lyft fares are 31% higher compared to 2019 while Uber’s are 20% higher, according to YipitData. Without other services to lure customers in, Lyft has said [it plans to slash fares](, a strategy that investors fear will erode any profits. As Lyft’s co-founders move to its board of directors, David Risher, a former Amazon and Microsoft executive, [will take over for Green]( as CEO next month. Risher’s been on Lyft’s board for two years, and for the last 15 has run the non-profit WorldReader, whose mission is to put digital books into the hands of kids around the world. He was a deputy to Jeff Bezos in the ‘90s, back when the company was expanding from books into selling product categories like electronics and hardware – a lifetime ago, in other words. My colleague Jackie Davalos and I spoke to Risher last night and asked him whether Lyft over the years had been too nice and too circumspect about expansion opportunities. He disagreed, of course. “You’ve got to be sort of true to your DNA, right? But I would say that brand attribute, it's actually [something] that we continue to benefit from,” he said, positing that riders want such choices. “I’m pretty comfortable with the idea of, we are the good guys, but we also compete super hard. We can be nice, but we can also, when we need to, fight it out.” Risher wouldn’t say whether he’ll rethink his predecessors’ decisions, such as not to expand internationally. He also declined to talk about rumors of [a Lyft acquisition](, insisting the company can remain independent. With a $3.6 billion market cap, Lyft would be relatively cheap – though it’s not at all clear who would want to buy it. “I really think there is room for at least two major players,” Risher said. “Maybe this sounds self-serving, but it’s a bigger truth. The world wants it. You want competition. I think it keeps us both honest and increases service levels over time. Maybe everyone gets picked up faster. It’s just a good thing.”—[Brad Stone](mailto:bstone12@bloomberg.net) The big story Billionaire Richard Branson has long been a player in the private space business, but as Virgin Orbit, his second space foray, is showing signs of flaming out, [Branson himself is conspicuously absent](. Get fully charged Huawei is working with domestic partners to replace US chip design software to [help Chinese companies sidestep US sanctions](. The UK’s ClearBank saw a 20% spike in client flows [after Silicon Valley Bank went under]( earlier this month. The US Federal Trade Commission is closely following developments in artificial intelligence [with an eye to antitrust issues](. As fears of a banking crisis swirl, tech stocks are experiencing a big rally, but that strong rebound [may signal that they don’t have much further to run](. 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