Steering Towards an Autonomous Future?

A decade ago, Lyft launched in San Francisco as the friendly pink mustache-wearing ride-hailing service. Today, the company is the second-largest ride-hailing service in the U.S., runs a bike share business, acquired and created and then sold a self-driving car unit — all while facing rival Uber, regulatory headwinds, lawsuits and the public market. Co-founder John Zimmer will talk about how it aims to remain competitive, what inflation and regulatory pressures may bring and where the next wave of growth will come from.

So let's welcome our next guest who's Co-founder and president of Lyft John Zimmer and your moderator Kirsten korsak All right hello everyone Um Jordan toley stole my line because my Whole entire goal in this interview just So you know is to get as many Transportation puns as possible in a Single interview so Shall We Begin let's Do it Uh so Lyft is celebrating its 10-year Anniversary we were kind of reminiscing Backstage you actually were on this Stage I think in 2014. it's been quite a Ride it has yeah see number one all Right okay I got like I got like three Laughs that's awesome Um if you could do if you could have a Redo What would you change Honestly it was my own psyche uh you Know going through readying for what we Went through over the last 10 years Basically been like three three big Chapters we came in with this really big Mission of uh changing cities making Cities designed around people not cars And we've made a lot of good progress on That uh you know we didn't obviously Foresee all the all the crazy challenges We'd have uh with a competitor raising Three billion dollars uh overnight with Us having five months left to live with A pandemic that took out 70 of our

Business overnight and you know the the Precursor of potentially a recession Um and throughout that Um you know some sometimes you know I Could I could psych myself out and so uh Halfway through I think I I really Learned how to uh as as a leader as an Entrepreneur kind of uh get myself ready For anything but uh there were moments Where I was kind of uh stuck Um so that's what I would change so do You feel like you were kind of getting In your own way a little bit yeah Exactly and so it's kind of interesting Because We like to think that like once you Reach some sort of you know anniversary Or Pinnacle that you'd no longer have Imposter syndrome so You know sitting up here today do you Are you able to push that aside and say Yeah I've got this yeah I think now now In a much different place uh Uh older been through been through some Some of that crazy uh so feel like I can take it on but but wish I had Gotten there sooner yeah yeah we were Talking about some of that uh crazy You were like We finally survived We after basically battling it out with Uber yep go public And then Covid comes yeah so uh when you're

Looking at like all of those challenges Which one just was it coveted that just Completely just took all the oxygen out Of the room or was it really like the Sustained fight with Uber this sustained Early fight with Uber was by far the Hardest part of this journey so that was You know as as a business we were it was The earliest done if you think about you Know we started with this idea to to get People to ride in other people's cars Um it was a new regulatory category Received cease and desists within the First few weeks of operation uh we were The first to kind of really scale up Peer-to-peer Uber followed with uberX They were actually trying to shut us Down in back channels through the puc They raised the most money ever by a Private company we had five months left To live in terms of cash uh so those Moments were by far uh the hardest Moments but we you know an incredible Team uh with a focus on the mission and Passion for what we're doing was able to Go to single digit market share up up to 30 to 40 percent and in a couple markets Nearing 50 percent and so that was by Far the hardest Um so then you're like and we get out Public before them we have enough cash To sustain us uh you know forever uh and Then a pandemic takes out 70 80 percent Of your business so it wasn't the

Hardest but it was like you know just After you take a small breath uh that is Also quite challenging Um during the Uber battle days how did You or were you even able to keep up Employee morale because it was like a Sustained long yeah In retrospect in some ways that was the Most like passionate and exciting Moments you know we we were it was clear Kind of who and what we were fighting we Had a belief that businesses should be Run a certain way with certain ethics And values we believed in you know the The mission of what we're doing to Improve people's lives with the world's Best transportation but to improve People's lives there was there was some Humanity in what we were doing and we Were fighting you know I'd argue an Entity that did not share that those Values or that Vision uh and so uh it Was it was it was incredible I think You'd asked I just saw one of the early Team members Veronica right there uh and It was an incredible moment to to be uh In it and excited so do you think it's Harder then to kind of keep that passion Because there isn't necessarily like I Don't know not an enemy to go after but Um to keep that kind of level of passion Excitement as the company has grown it Changes uh so you like survive and you Kind of get get your footing a little

Bit uh uh but then obviously the Pandemic but then there's a larger you Can get into this to fight another Company we got into this to to change The way Transportation works if you look Back historically throughout U.S history Canal infrastructure railroad Infrastructure shaped our cities shaped The economy people's access to Transportation is more determinant of Their ability to pull themselves up then Some studies show then education it's a Mobility as you know from what you do is Incredibly important to people's quality Of life so the know it like we're so Grounded in that uh we're fighting for That that it's not not hard to get fired Up So um as you know you know having a 10-year anniversary or hitting some Milestones does not remove any Challenges Um there are still ones that remain and A new one has kind of popped up uh the Biden Administration has um recently Proposed a rule that would if adopted There's a long way to go but if adopted Would reclassify gig workers as Employees Um you already kind of had that fight in California so what is your strategy as a Company on the national level are you Going to do the same thing it's put the Same amount of resources which were

Considerable in California to fight this Yeah so first uh for this question I Always think about like what drivers Want and how drivers use the platform so I think the reach of the platform is Still shocking to us that about 5 Million drivers have driven on the lift Platform all time three percent of the US Workforce has earned tens of billions Of dollars on the lift platform Of which the Far Far majority 90 95 Percent Drive less than 20 hours they're Using this as supplemental income you Can turn on and off the app and get Income whenever you want which is Incredibly empowering drivers want to Remain independent contractors and uh And and that's the most important part Of this at the same time We want to provide benefits to those Drivers but the current legal construct Is that benefits are tied to employment Um and so it's been a multi-year uh just Like creating the new regulatory Category for transportation Network Companies uh creating the right Conditions for for workers on these Platforms is also really really Important and speaks to the broader Mission uh the the recent Biden Administration ruling that you're Talking about basically just returns Things to the way they were in the Obama Administration

Where all our drivers were independent Contractors typically we are governed at A state level uh federal government is Important and matters uh for for all Industries Um but it's really interpreted at the State level of which I would argue we've Made uh significant progress over the Last few years California being one Example both educating Massachusetts as Well correct uh that's still kind of Yeah uh there's there's things happening But uh made a lot of progress in both Kind of educating policy makers by Talking to having them talk to drivers And in creating policies that allow for Independence Plus benefits In California and also potentially in Massachusetts depending on how this if It doesn't go your way in Massachusetts Let's say or even on the federal level Even as an independent contractor how Does that it does put pressure on your Bottom line though doesn't it sure if You like in a hypothetical situation if That was which I don't foresee to be Happening Um first I think it's important to talk About the experience people don't Believe us and they say well what's so Hard about doing that uh and what's why Is that bad for the driver so uh the way Labor law works if if everyone on the Platform was an employee they would the

Second they turn on the app start Collecting income so then wouldn't Everyone just turn on an app that you Just start getting income so then we Would create shifts in that case then When you create shifts it doesn't give Drivers the type of flexibility that They wanted to begin with so so one just To explain kind of one of several Reasons why that's not the best solution You know if you're forcing me to Think Through like you can you can find a way I'm sure to make everything work I think It ends up with uh a lot less drivers Um and and conditions that I I don't Believe drivers uh would like compared To the the situation today Uh there's other kind of interesting Renewed pressure I mean Uber's always Sort of there Um in the background Um but we've also seen a little bit of a Resurgence in the taxi industry like in New York and San Francisco also during Covid car ownership went up so these Like new kind of new slash old pressures Um and so I'm wondering how Lyft out Maneuvers another pen by the way Um how how does Lyft outmaneuver these Old and new Sort of pressures on the bottom line Operations it's the customer experience We we need to continue offering an Amazing incredible customer experience

And evolving that customer experience to Make it better than uh you know owning a Car uh or you know even providing Services uh for those that do own a car Um so I think there's Our the broad vision is that whenever You need Transportation whether that's a Bike from our Bike Share systems whether That's a ride to your vehicle a rental Car Um that that lift provides you with that Best alternative uh so I'd say it's Being customer oriented to zoom out like I did on drivers we've uh since the Beginning done over three billion rides More than a third of the U.S population Has taken a ride with Lyft over 112 Million people unique people so we have This incredible reach and ability to Provide better and better transportation Services to to that broad user base So is it just about experiences or is it Finding growth in new areas I mean you Have bikes how substantial of a revenue Contributor is that and and is there Growth there yeah well as a single Segment company and as you know someone Who's in a quiet period pre-earnings I Can't give specific financials uh but on Specific what we've talked about with Bike Share we're the largest Bike Share Provider in North America uh I believe In 21 we did about 45 million rides on The bike share system just to give it a

Sense of of scale to compare that that Is larger than Bart the you know the Transit system here if you call uh City Bike itself is actually larger which is The New York Bike Share system we own is Larger than Bart it's about if you Compare it to a transit system the 25th Largest transit system in the United States uh so in places where we've Gotten to density of Bike Share and Added the e-bike which is an incredible Product that the team developed uh it's It's it's getting to a real significant Scale how come you have not embraced or Jumped into delivery as a growth Opportunity and instead really kind of Like steadfastly said you're not going To do that and take the ubereats route For example There's a trillion dollars spent on Transportation in the us alone every Year there's so much more to be done in This space if we focus on Transportation Which again has many different verticals You know you can build one of the Largest companies ever built even just By focusing in the regions we're Currently in so I think focus is really Really important we can have Partnerships in other areas and Um but I think that allows us to to best Compete and best deliver for our Customers so focus is important but also Diversifying a business is also

Important and during covid we did see That you know ride hailing really Um took a hit and and delivery was a bit Of a bright spot yeah so when that Happened were you like uh I really wish I had Diversified my business yeah I Mean you think about like what is Temporal and what is permanent like We're we're in this you know with the Long-term vision and uh covid I would Argue is is mostly past us and uh and I Feel good about the strategy we we did You know work on some B2B delivery Meaning uh we have an amazing driver Community an amazing driver Network and There are retailers that want to go Direct to their customers and not go Through a delivery platform uh and we Can provide them uh with with a certain Amount of delivery you know as a Platform uh so I think that's been smart Um but but we're past covet I'd again Argue and we're now looking at a Potential recession and in a recession Transportation historically is always Stable it's a necessary thing that People need and 30 salads on food Delivery is not stable in a recession And so this is the kind of you have to Have a the right I think longer term Perspective on that I'm not saying That's not a good business I'm just Saying I think there's a higher Roi for Us uh with with focus and and it's on us

To make sure that we balance both the Near-term and long term An another growth area which is really More a little bit more futuristic it's Certainly not near term Um is autonomous vehicles and lifted a Bit of a u-turn Anyone no no okay yay all right uh it Sold their sold their technical unit for For Um developing autonomous vehicle Technology solar to woven planet and Really is now doing this sort of network Effect partnering with companies like Motional Um and I'm wondering what is the Timeline from your view to when not just Oh we have commercial launches but There's an appreciable amount of Revenue That Lyft is capturing yeah from this Um I've gotten these predictions wrong And it kind of feels like you know I Have two kids now and so it's it's like You know the are we there yet and you Just keep saying 20 minutes and then 20 Minutes later you say 20 minutes uh so I Always think like it's uh just a couple Years away that that the answer to your Question but it's super hard to predict It's kind of this last percent of a Technical problem and then you have to Get the cost down for autonomous Vehicles so it will happen I I strongly Believe it's not a matter of if but

Obviously when Um but the good news is for Lyft is that We have a business that you know creates Uh revenue and profit and uh Doesn't necessitate that happening Tomorrow the other thing is for Autonomous vehicles The best way to commercialize them will Be on an existing Network you're going To need to have a hybrid network with Drivers and with autonomous vehicles Because as you're seeing now with Autonomous vehicles they can do less Than one percent of use cases today Without a driver maybe it'll get to 10 Percent you know in the next few years But imagine being on a t or Verizon and Making one out of 10 calls that would Not be a good Network to be on being on The Lyft Network you'll be able to get 10 out of 10 rides one might be an Autonomous vehicle with one of our Partners nine are going to be with you Know from from our driver community and So I think what we do is super important And can Flex is that technology is ready Um is your aim to partner with every Single autonomous vehicle company out There or are you being strategic if you Are being strategic what is making you Pick one company over the other I think there's a certain bar uh you Know of of any partnership uh Particularly in AV for AV it's it's

Safety uh and it's you know likelihood Uh to to get over this extremely Difficult technical challenge Um so I'd say there there is a bar but I Think it's too early to pick you know One one winner and so Um today it's about having multiple Partners uh 10 years from now uh too Hard too hard to predict Um but uh today you know having multiple Partners as that field continues to Develop is important Um on the I'm going to say the eight ass Front because uh Tesla FSD is not a Self-driving vehicle Um because the driver has to be in the Loop but more and more Um ride hailing drivers are actually Using Tesla's does Lyft have a policy or Will it have a policy about whether Drivers can use FSD beta software which Is while they're actually have Passengers in the back have you talked About that internally This probably been a few conversations That um You know something that that could be Potentially talked about we do not have A have a policy currently Um you know we think that the regulatory Bodies are best uh you know Regulators When it comes to to that level of safety Um I think more and more people are Turning to electric vehicles as drivers

Because uh as as gas prices uh rise and As EV prices come down uh for a driver On the lift platform that utilizes the Vehicle far more than the average Consumer uh the payback on that battery Uh is much faster and so the economics Uh makes sense uh for for more and more Drivers the economics makes sense on the Electric Um piece but I would argue that Regulators haven't stepped in actually Um with Tesla and FSD and it's very Experimental I mean really we're all Kind of uh living in elon's beta verse If you will Um and I'm wondering if it is going to Come down to the private sector Uber Lyft others to sort of say you know Actually we don't when you're driving on Our honor and giving people rides we're Just not going to we're going to request That you're not using that sort of beta Software Yeah I think we will continue to assess Um and I think again we are not the the Best regulatory body uh for kind of the Entire industry Um but obviously uh driver and Rider Safety is is our top priority and so uh To your point it's something that will Continue to be looked at on the robo Taxi side you have talked about a hybrid Network do you see like eventually when This really comes

Um to a Appreciable again like commercial level How the makeup is going to be between The human drivers and Robo taxis I know It's a little bit distant but do you see Overall growth or is the aim to have Overall growth throughout or like a 50 50 split is it going to be dependent on Marketplace like how are you thinking About that I think there'll be overall Growth uh such that I can't imagine Anytime you know in the next decade plus Where we would need any less drivers Because the big opportunity here as AVS Come on board and bring down the cost of Transportation and continue to improve The experience both from a safety Perspective and an enjoyability Perspective is that more and more rides Still today what we do in our industry Represents you know maybe one percent of Vehicle miles traveled as you get into Autonomous you can go from one percent Of vehicle miles traveled to two to five To ten so there's much more room for Growth of our overall business and so I I don't see any any path where there's Less drivers In fact as that keeps happening you you Could argue that that you'll still need More even if you know they're doing 98 80 70 60 50 percent of rides the overall Pie is getting much bigger Um I want to go all the way back to what

We first talked about in the beginning And you were talking about your psyche In it I was you you as a founder and Sort of how you've navigated that and Um you have publicly talked about your Depression and how that has Um changed as a Founder how has it Informed like how you run your business And even mental health mental health Policies uh with your company I mean you Think about uh Team Member productivity And the best way to get team members Being highly productive and building a Phenomenal business is that they're Happy and healthy and so you know we We've you know added mental health Benefits Wellness benefits but also just You run the company in business with With empathy Um you know my background's in Hospitality not not technology and so I Always think about the people in the Business and so in our case you know That is our team members that is the Drivers that is the Riders and I think As any leader being empathetic uh having Your own personal experiences and using That to inform how you continue to lead Uh is uh is a good thing being Empathetic is one thing Kind of deciding that you're going to Publicly talk about it is a very Different thing so what compelled you to To do that I mean why was that important

To to actually tell the world that this Is something that you've I think it's Important to normalize it you know I I I Think if you surveyed you know 10 people That have experienced some form uh of uh Sadness or depression or anxiety you'll Come back with a pretty high number I Don't know the current count but it Could be something like 50 of that group So Um it's it you got to normalize it uh so By talking about it or not talking about It is not helping in that way and so I Thought about it more about that way It's not like a for me not a big deal to Talk about it I think it would be Detrimental to not talk about it and Then the health mental health policies That you've extended is that it just for Your full-time staff or are you actually Working on extending that to to your Your drivers uh that's been for the the Full-time team members at Lyft to this Point yeah what Jew I mean when you Think about the gig workers they're Actually kind of on the front lines so Have you thought about that internally Like how to support that really Important group on the menu yeah that That is that when you look at uh Flexibility uh Plus benefits that is the Idea that is what we want to do you know A year into starting lift you know we Didn't start it with this idea that holy

three percent of the US Workforce Would earn tens of billions of dollars On the platform uh we didn't we hadn't Realized that would happen uh and then When you realize that you feel you know Or you start seeing that you feel an Incredible amount of responsibility and So I went to our general counsel hey What type of benefits health benefits Can we provide for drivers and that's When I really learn deeply on the Current construct of employment being uh Being what it is and what we talked About and providing certain limitations So I think there is an opportunity and We're going to continue to work with Policy makers to make that more true Okay well we'll see what you what you Come up with on the state side and Potentially on the federal side right That's good well thanks for joining us We should say John's parents are in the Audience so Um let's give them a round of applause And thanks for joining us today thank You all right

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