00:00:02
Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Masters in Business with Barry Ritholts on Bloomberg Radio.

00:00:17
Speaker 2: This week on the podcast Man, was this a fascinating conversation? David Rischer is CEO of Lift since the past three years. He's been on the board for the past five years. What a fascinating discussion about a company that is probably an app on your phone and you may not be aware of all the different things they do, from bike share to autonom's vehicles, to fleet management and everything in between. I thought this was absolutely fascinating, and I think you will also with no further ado, my conversation with Lift's CEO David Risher.

00:00:55
Speaker 3: Thank you, Berry, Hi, I'm happy to be here.

00:00:57
Speaker 2: I'm thrilled to have you. Before we start talking about your technology background, I got to roll a little further back. Bachelor's in comparative literature from Princeton. That doesn't sound like the sort of career plan for someone who's going to work his way through technology companies. What was the original idea?

00:01:17
Speaker 3: So this goes way back, and the funny thing is even to high school. My mother bought an Apple to computer a million years ago to help her run a small business that she was running, and I sort of got into technology that way. I will admit. Part of it, I think is I had terrible handwriting, and so when I used the computer to you know, to print out stuff, you know from my high school, you know, English teacher, she could finally read what I was what I was writing. Probably gave me a better grade as a result. But so I sort of got into computers a little bit as a kid, ended up at Princeton writing my thesis on a computer again, and this is a million years ago when that wasn't normal. And so I found myself just interested in technology. And after you know, going to a consulting firm for a couple of years to learn about the business world and going to business school, I found myself as an intern at Microsoft, you know again back in nineteen ninety it was and sort of the rest is history.

00:02:09
Speaker 2: So Harvard Business School, we know what that typically leads to. I'm curious, how did the humanity's background help shape the way you think about business, about leadership, about working with people. What was the upside of humanities for you?

00:02:25
Speaker 3: You know what. I really appreciate the question, and I actually think it's it's more relevant now than ever. Look, the humanities is all about, you know, curiosity and understanding and maybe even empathy. Right, If you read a book, you have to understand you're exposed to different people's perspectives. Right, It's almost like you're crawling inside someone else's brain, particularly if you're reading fiction. And so to a certain extent, I think it's you know, nothing could prepare you better. Now you have to have an analytical brain. You might also have to be good with numbers in business. But the humanities world, I sort of think of it as this kind of magic. You know, vaccination against irrelevant because that curiosity is always going to matter, and it certainly helped me through my whole, my whole career.

00:03:05
Speaker 2: I love that answer. So you intern at Microsoft, you end up beginning your career there where you helped to launch their first database product, Access. Tell us about that.

00:03:16
Speaker 3: Sure, So Microsoft was, you know, famously ahead in or at least getting ahead, let's say, with the launch of Windows in word processing, in spreadsheets, of course, And again this is sort of ancient business history, but it's it's sort of a fascinating tale of a technology shift completely reshuffling the deck away from old companies like word Perfect and Lotus one, two three. We don't even know who those companies are anymore because Microsoft took over that space, and it's really because Windows shifted the platform. We might come back to that idea, you know when we talk about autonomous cars, but they didn't have a database, and that was sort of the third big product that a lot of companies wanted. I helped develop it. I was the first product manager on them. And really all that meant is my job was to go around and watch other people you use competing products at the time paradox debase again, products that don't even exist anymore, and try to pay attention to what they were doing with these products, how were they using them, where were they stumbling? And that was my first role, and in a sense it has been, you know, one of the most important jobs I ever had, because it's what sort of taught me about understanding what customers want.

00:04:17
Speaker 2: Huh. Interesting, And then you founded Microsoft Investor and launched that product. Yeah, that is so far afield from databases. What led to that transition?

00:04:29
Speaker 3: Okay, so you're making me realize that there's a theme of my life. I hadn't really thought of before, which is platform ships. So when I joined Microsoft, Windows was the product, right, this was the thing that was going to run you know, software, And of course it become incredibly successful. But then, you know, nineteen ninety five, ninety ninety six, ninety ninety seven comes around, the Internet is here, and Microsoft, like any tech company at the time, had to figure out its Internet strategy, and it decided that there were a couple of key products that needed to be available on the World Wide Web. Again, I think the Information super Highway literally was the way people talked about it is crazy, so cliche, so cliche, but there it was no one even knew how to talk about the thing. So anyway, and I had been, you know, a little bit interested in personal finance. U you know, a couple of star threads came together. Microsoft tried to buy a company called into It so very successful, was unsuccessful, blocked because of the Justice Department. And so we decided we need personal finance. And I said, you know what, why don't we develop this product a personal finance product for the Internet, not as package software.

00:05:29
Speaker 2: Huh really really interesting. And then staying with the theme of platform shifts. Employee number thirty seven at Amazon that is just an absolutely bonker's number. Yeah, senior VP of US Retail. When you joined the firm, revenue was fifteen million dollars. You helped ramp that up to four billion dollars. So that's right obvious question. When you join Amazon, did you have any idea with the behemoth it would become or was it still hey, we're hanging on our fingernails and maybe this will work out, or anywhere in between.

00:06:06
Speaker 3: It was sort of both at the same time, you know, and it was almost always going to be one or the other. Right, So I remember, I'll tell you a little of the story of how I got there. So my phone ring one day at Microsoft and it's this guy, Jeff, and he's doing a reference check of a woman who used to work actually at Microsoft in the personal finance group. So it all kind of connects, and so we get to talking and one thing leads to another, and he's very precise about the way he's asking questions. Remember, the company had maybe ten people at this point, was very very small, very very small. But he had a big vision. You know, he was going to be Earth's biggest bookstore.

00:06:42
Speaker 2: Wait, hold on, let me just stop you. When you say this guy Jeff. Yeah, this isn't just some guy in HR Jeff Bezos is calling you to do a background check on a potential hire.

00:06:55
Speaker 3: That's exactly it. That's exactly so go on, Jeff. So Jeff calls me. At the time, he was just this guy Jeff.

00:07:02
Speaker 2: Hey, David, some guy named Jeff on the phone, pretty much back background check for an employee. So what was that conversation?

00:07:09
Speaker 3: Like, well, so he had, you know, to take you back then, but in a sense, it's still the Jeff you know today. He had a plan and it was a twenty five question plan for the phone call, right and to this day, the question I remember the most clearly was it's very clear you were a fan of this person. Give me an example of a job that she wouldn't be a good fit for. And it was such a clever question because inevitably in background checks you're trying to say nice things about the person. But this is an invitation to say, well, you know, maybe you know, a very detail oriented job might not be the best fit, or maybe something that you know manages a lot of people, because she has something like this that would give people a little sense or give him some sense of where an area to probe mort is. Anyway, at the end of that conversation, literally forty five minutes into it, he says, you know, you sound like a good guy. Said, oh, you sound like a good guy as well. And so a couple of days later, he and McKenzie his wife at the time, and Jen my wife currently still and I went out to dinner, got to know each other, and over the course of the next year, got to know each other a little bit better. And then I ended up applying for this job to help to help Amazon grow beyond just books. That was really the job.

00:08:16
Speaker 2: And how'd that work out? Worked out?

00:08:19
Speaker 3: Pretty well? Yeah, it worked out pret but you know what, it wasn't obvious at the time. So, you know, he during the interview, I remember, he said, look, if we play our cards right, and as you say, it was a fifteen point six million dollar store at the time, so tiny, tiny little thing. He said, if we play our cards right, maybe by the year two thousand, this is a nineteen ninety six, we might be a billion dollar company. Maybe maybe, but a lot has to go right in order for that to happen. Obviously, we got there, and then we got you know, far beyond. But there were all kinds of people who, frankly were sort of rooting for our failure. You know, competitors, you know, Barnes and Noble at the time, a bunch of Wall Street analysts who thought this was just you know, some sort of crazy ponzis. Can know where it was.

00:08:56
Speaker 2: Buy anything on the Internet. What are you guys doing? This is a dumb idea.

00:09:00
Speaker 3: Yeah, totally, totally well. And not only that, but also the costs are going to be huge. You're gonna have to build out of the distribution centers and warehouses sometime. You know, this cost of it. The internet is unproven technology, all sorts of things.

00:09:12
Speaker 2: No one's giving you a credit card over the correct I remember getting from my college roommate, which was decades before Amazon formed an Amazon Gift certificate. And the first time you go through the experience of buying something, it's like, oh, this makes perfect sense. I don't have to I don't have to go to the store, I don't have to waste time. This is great. I mean, there's certain stores are fun to browse, but like the mundane sort of stuff. He was just decades ahead of everybody else.

00:09:46
Speaker 3: In that way, and in realizing that it's really the customer experience and customer obsession that's going to drive your continued growth because all those things are true. And as he would say famously, you're always one click away from competition. So that's the downside, right is how do you continue to compete in a world where theoretically someone else could start having someone else could start, and someone else can start, and you don't have any geographic advantage over them.

00:10:09
Speaker 2: And they kind of owned that space for the longest time. Really, it was only the pandemic where people were out of things that it forced everybody all right, now I have a Target account, Now I have a Walmart account, Now anybody else who could deliver. And what's been surprising is how they've just powered right through hasn't really slowed them down very much.

00:10:29
Speaker 3: That's right, that's right.

00:10:31
Speaker 2: So you go from Amazon, you kind of tap out. A couple of years later, you teach at the University of Washington's Business School. You were elected Professor of the Year in two thousand and four, and then you spend thirteen years running World Reader, a nonprofit dedicated to helping children learn to read and underserved communities. This is yet another.

00:10:56
Speaker 3: Chef, right, yep?

00:10:57
Speaker 2: What was it? Just like, all right, I have my Microsoft stock, came in Amazon recovered from the dot com implosion. That's doing fine. I could just do something for fun. What was the what was the shift? Thinking behind the shift?

00:11:11
Speaker 3: You know, you know, it wasn't that. Actually it was sort of a different thing. So you asked me, you know, a couple of questions ago, what my career idea was as a kid. Honestly, if I had had to guess, I might have said, you know, I'll be maybe I'll be an English professor someday or something like that. Like I'd wanted to teach and I loved reading, and so this was a way for me to bring together a couple of different things in my life. Obviously books and literacy because that was sort of the passion and focus, but also technology. The thesis of the company was kids are going to read using tech, and that's how it's gotten to be, you know, millions and millions of kids later are all reading on the platform. It started out with Kindle, a product I know something about because of my Amazon days, and brought you know, sort of technology and reading together. So that was really the focus.

00:11:53
Speaker 2: And then what ultimately ended up bringing you back into the corporate sector after you know, a long time. I'm in academia and nonprofits.

00:12:02
Speaker 3: Yeah, so so here it was. You know, one day my phone rings and a guy named Sean agerwal Is on the other end of the line. Sean and I had worked together many years before, back at Amazon. He was my kind of finance partner. He had subsequently become an investor and then the board chair of Lyft, and he and John and Logan the co founders of Lyft. Really we're looking to do something quite unusual at the board level, which was bring someone in who is a real customer advocate. So boards, you know, for those of you who haven't gotten a chance to be exposed to a board, you know, they typically are made up by you know, kind of finance people, you know, business strategists, you know, maybe you know, maybe people who have built companies before. But often by the time you get to sort of the board level of a company, you're pretty far away from the customer. And John and though and again to their credit, said you know what, we need some more customer advocacy right from the top. We need some more support frankly for that kind of vibe as well as someone who'd helped scale a company like Amazon. You know, I also learned a lot about competing at Microsoft and even at world Reader. You know World Reader nonprofits. People sort of look at them and think they're not very much. But it's very, very difficult to actually scale a nonprofit because the funding is always tightened so forth. So I think they were looking for someone with a combination of scaling experience but also real customer advocacy, and so I joined the board as a result.

00:13:18
Speaker 2: And then eventually a couple of years later, you get offered the role of CEO. What was that, like? How did that come about? Frequently board members, or I should say infrequently board members become CEO. Is that doesn't sound usual?

00:13:35
Speaker 3: Yeah? Yeah, so finnally enough. And this one, I'll sort of slow the story down again or this time because it actually was Sean Agerwall again. So same board chair, he calls me up. It happened to be on Valentine's Day, of all day, so I remember the day in twenty twenty three. And then the backstory here is John and Logan again, the co founders have left. This is what they had been doing for fifteen years, NonStop. It was literally their first job out of college founding this whole new company. You know, was standing the onslaugh on an incredibly competitive environment, an incredibly operationally complex environment, twenty four hours a day, seven days a week, for a year. After a year, so at the end of the prior year, they said to the board, you know what, it's time for us to move on. We've sort of done what we need to do. And frankly, the company is going through a bit of a tough time financially and operationally, and I think they realized that they were sort of getting to the end of what they could really where they could really help. So the board did what it does. You know, boards do this. They form a special committee, they start to recruit look around. I wasn't on the committee. I was sort of watching, you know, from from a side. But as they say, then my phone rings one day and a Shawan on the phone with John and Logan and they basically say, you know what we've been thinking and as we've been looking at external people, frankly, we think we might have the right person to at least apply for the job. Let's be clear, apply for the job sitting right here, you know, on the board and I said, what are you talking about? They said, we're talking about you, David. I said, absolutely not really. Your frust reaction was, hey, thanks, but no things. Zero percent chance, zero percent. Wow. I literally said, you should hang up the phone right now because you got better things to do. There's just no way. But you know what, as the day wore on, I found myself saying, you know what, this is a really interesting opportunity. How many people, you know, get this opportunity to run it? And I never run a public company before. I mean, my god. But at the same time, I had learned some things at Microsoft, I learned some things at Amazon, I learned some things at World Reader. I learned some things in various different ways of my life. And I had a lot of passion for the company having been on the board, and also a real understanding that as a board member you really only have so much power and influence. It's fairly limited. But as a CEO it's a different thing. So anyway, one thing led to another. I applied and went through kind of a harrowing experience but ended up getting the job.

00:15:40
Speaker 2: Huh really really fascinating. So we mentioned earlier you joined the board in twenty twenty one, you're named CEO in twenty twenty three. When you joined the company, they were still reeling from the pandemic and all the factors that that drove the company was losing not only losing money but also losing market share to their big competitor Uber. What did you find when you looked under the hood? What surprises were awaiting you as CEO?

00:16:11
Speaker 3: So the first maybe meta observation, and you're teeing it up, is gosh, you're on the board of a company for a couple of years. You kind of think you know the company. You don't really know the company. I mean, if any board members are out there, you think you do, and you probably have a pretty good sense of certain things. But you get in there and everything is ten times you know, bigger, worse, better, all the things than you realize. Okay, what did I see? I saw a company that had some real innovative spirit at its core. Remember Lyft was actually the one that really revolutionized ride share. So the other guys they came up with a sort of black car concept and you know, black car on an app, but it was really Lyft that said, you know what it can be anyone with a prius, you know what I mean, anyone can pick up. So this company had innovated from the early days, but honestly, it's innovated spirit had maybe gotten a little the best of it, tried few too many things, spread a little too thin, losing share, and its core business, as you say, not priced well, you know, not paying competitively. So a number of different just basic issues. So what do we do the first frankly couple of weeks. Well, first thing is lower prices. We were just priced too high. That'd be really yeah, I can't operate.

00:17:15
Speaker 2: And did you do a big instead of announcements around that, because twenty twenty three is still kind of a blur to me.

00:17:20
Speaker 3: So we didn't. And here's why. In order to withstand a price drop, because it's a very competitive business and you're doing a lot of volume, so if you drop your price, you've got to make sure you can pay for We had to do some other things as well. So for example, we had to reduce our cost significantly, so we laid off about it's about a third of the company and yeah, twenty six percent actually of the company, and I think about a three hundred and thirty million dollars of savings. That was a very very significant shock to the company. By the way, we also had to raise driver pay, so we had a lot to pay for.

00:17:53
Speaker 2: We also used simultaneously lowing prices for lift and yet bumping up prices for drug That's right. That sounds like that's going to cause us a big problem for profits.

00:18:04
Speaker 3: So that's exactly right. So in order to pay for it, you have to figure out how to pay for it. And frankly, our cost structure was just sort of out of control. We were doing too many things, We had too many people, and by the way, those people were all working remotely, which makes it quite difficult to really kind of change the culture to a customer obsessed culture, which was my other big thing. So and by the way, we were also overpaying in stock based compensation, which was bugging investors. So in the first couple of months, you know, it wasn't really the time to be bragging. It was the time, frankly, to be saying, Okay, we've got some things to fix, and let's really focus on that. So first, you know, call it you know, thirty sixty ninety days. It's fixing some basics, but also reorienting the company back towards its customer obsessed roots. And I'm still very I guess i'd say proud of this. The second the first meeting I had of the day was literally getting my computer or my laptop, and a second meeting ten o'clock in the morning Monday morning, I said, let's start talking about a product that's now called Women plus Connect, trying to get drivers and women riders.

00:19:01
Speaker 2: Such a great idea, especially given the mayhem across the street from it.

00:19:05
Speaker 3: I appreciate your saying that, and it's it really matters and so.

00:19:10
Speaker 2: And this is something the company and I'm sorry to interrupt, please, it's very visible on the app, like that choice, which shows some thoughtfulness. And oh there's this problem. How about we have send a woman drive for you and you don't have to worry about what you're hearing about elsewhere exactly. It just makes so much sense.

00:19:28
Speaker 3: So I really appreciate you saying that. It was an easy decision. From that sense, all you have to do is talk to ten women and say we you know, what do you think? And they say wow, gosh, particularly late at night, maybe in a new city, maybe after a long day. It's just not my jam to be talking to a dude sor ry dudes, you know like that. But but but sometimes the easiest ideas are also the most complicated. There are all sorts of potential legal issues, all sorts of operational issues. They're even to a certain extent cultural issues of like is this going to be okay? But I was like, you know what, I think it's going to be okay. I think it's going to be okay. So that was an early decision we made. It came that was in April twenty twenty three. We launched that later that year, and it was really exciting for the company to say, you know what, we can do big things again and we can start to innovate again on behalf of customers. Huh.

00:20:11
Speaker 2: Kind of fascinating. Coming up, we continue our conversation with David Rischer, CEO of Lyft, discussing the future of ride share technology. I'm Barry rid Holts. You're listening to Masters in Business on Bloomberg Radio. I'm Barry Ridolts. You're listening to Masters in Business on Bloomberg Radio. My special guest this week is David Rischer. He is the CEO of Lyft, one of North America's largest and fastest growing ride sharing network. So over the next year or so, you return lift to profitability. On the most recent reported quarter, first quarter twenty twenty six, over twenty eight million active riders, nearly five billion in gross books, one point seven billion in revenues, just about one hundred and thirty three million in eb of the profits. So the combination of restructuring the company, attracting higher paying more drivers, and discounting prices for riders put you on the right foot. How do you build on that? What's the next step to maintain that momentum?

00:21:25
Speaker 3: Well, so, in some sense nothing changes. In some sense everything changes. Okay, So what doesn't change customer obsession is still driving profitable growth. That's just going to be a theme I just go with forever. I you know, maybe I've drank a lot of the Jeff Bezos cool egg, but it seems to be working out pretty well. So so one other financial metric that has been interesting to watch is when I joined, we were losing about three hundred million dollars, consuming abot three hundred million dollars in cash over twelve months. We're now jettering about one point one billion dollars in cash over the over twelve months. Okay, so what that allows us to do is invest in the future. What does that look like. Certainly it looks like internationalks mansion. So that's been one thing we've been at for about the last year, which is, you know, Lift was sort of almost say, caught a little bit in sort of a US centric view of the world, and it just doesn't make sense. Once you have a product that scales really well and it's sort of a fixed cost based type of thing, you really want it to be around as much the world as possible so you can run as much volume through that platform as possible. So we bought a company called free Now last year. It's a European taxi aggregator free Now Free Now Yeah, yeah. It is Europe's biggest taxi aggregator, which means that if you want a taxi and you're in a place like Barcelona or London or pick your favorite city. They operated nine countries, the free nowp is going to be your best way to get it. That gives us a great platform for expansion, even when it comes to autonous vehicles. We'll come back to that, I'm sure you know. In a couple of seconds. So that's one direction of expansion. You think of that as out overseas. Another dimension is up up market. You just kind of refer to this soft again. It's sort of started. Its tradition was as kind of a relatively inexpensive, very available ride share option, but it wasn't as strong and kind of the black, you know, kind of luxury segment. We bought a company called TBR last year. TBR is a high end chow for a company. We also have a very very good lift black product. In fact, if you're listening to this, I promise, if you haven't tried it, give it a try. I think you'll like. It's actually our highest rated product. You know, a nice black car comes and pick you up, picks you up. So that's another area of expansion for us because that gives us frankly more margin to play with, but it also allows us to talk to a segment that we haven't talked to very much. And then of course autonomous vehicles. So these are all nice uses of cash. Once you're generating cash, you can start to either acquire companies or you can invest in things that then grow, you know, build sort of the next chapter of growth.

00:23:44
Speaker 2: So I appreciate you mentioning the various tiers. There's this tendency to think of the consumer, especially the American consumer, as one thing, but we both know that's not true. You get to crunch a whole lot of data. What do you seeing in terms of income, geography various times a day? Like what do the metrics tell you about the different flavors of consumers using lift?

00:24:11
Speaker 3: Yeah, this is such an interesting issue and it's not something I really appreciated. We're going to do about a billion rides this year, and so to your point, with a billion rides, you kind of get a sense of how people are spending their time during the day. So I'll tell you two things that are growing quite quickly. One is party time. And it might be funny to start there, but party time, so I actually say what that means. What that means is a Thursday night for a really Friday night and Saturday night. Call it nine to midnight. And it is really interesting. I think this not just post COVID, but I think frankly, a little bit of app fatigue is driving people to say, you know what, let's actually get out and spend our lives out in the real world instead of spending all of our lives on apps. So I think that's actually I'm quite comforted by that, and it's actually a big part of our sort of overall purpose is to serve and connect people. A lot of passionate about that. At the same time, commute well, and I do think this is a certain post COVID thing where people were sort of thinking, maybe we'll just be in our houses the rest of our life working remotely. It turns out a lot of companies and a lot of people are saying, I want to get back to work. And I think these things are somewhat connected. Sorry for sounding a little bit like a social psychologist a little bit, but I mean, gosh, I'm met my wife at Microsoft. You know, a lot of people have really significant life events that happen at work that are not just work right, and so I think there's a little bit So anyway, when I look at things like commute hours, and then travel continues to be really strong as well, I think, and this is look, I'm, you know, million years old now. When I was a kid, the idea of you know, getting on a plane and going overseas was I mean, I might as well say you'll go to the moon. Now, you know, twenty and thirty year olds, they're like, yeah, I'll sort of take a trip overseas, or I'll go to you know whatever, Nashville for the weekend or something. So anyway, I think these are pretty big, you know, real societal shifts as people want to kind of be out in the real world.

00:25:51
Speaker 2: I'm kind of fascinated by the idea of party time because there's always pre drive apps is There's was always the question I've had two I guess I'm driving tonight, so I stop here. But if you're out on party night and you know you're taking a car home, you're not afraid about having a second with their drink. You can kind of relax a little bit. Getting pulled over is not a problem. If you're in somebody else's lift.

00:26:19
Speaker 3: It's exactly right. It's so again if you zoom out, so you know, Wall Street looks at companies like ours quarter by quarter and it sort of drives you crazy. But if you zoom way way out, you know, let's look at that from a different dimension. Now, average car right now, fifty thousand bucks a year. Okay, average monthly payment eight hundred bucks insurance, it cost you another couple hundred bucks. Gas might cost you another one hundred bucks or so at least now, and then service will cost a little bit more of that. Okay, So that's plan A. And by the way, if you take on all that responsibility, there's no texting and there's no drinking. I mean that's right now. Plan B. Pay twenty bucks getting a lift, someone else does the driving, text your heart to get content, drink as much as you if that's if that's your job and it's you know, twenty bucks, not you know, eight hundred bucks. Time plus plus plus plus plus. So just just looking out again, you're sort of asking about kind of segments and sort of you know, maybe a little bit the role of technology in society. I think I still think we're actually at the at the beginning stages of a lot of these changes, and we and sometimes again people have been around for a while don't even realize how much the world has changed that way.

00:27:21
Speaker 2: Yeah, fascinating data point. I saw it was actually a couple of years ago. The number of kids under nineteen that haven't gotten a driver's license is kind of like when I was growing up, you couldn't wait to get your driver's license because that meant freedom. There wasn't an internet with three channels, plus some people started getting cable like it was a very different world back then. That's right, And now it's like, yeah, maybe I'll get a license, maybe I won't. How do you think about marketing to that demographic?

00:27:51
Speaker 3: Well, so one of the things I learned from Jeff again it was, as you can imagine, quite an influential boss for me, is you know, build your business is on things that don't tend to change, not things that are that are sort of ephemeral. So what are some things that don't that aren't going to change? Okay, again, people are going to want to get out, either to the doctor or to you know, go to a bar. So that's that's a that's a good bet. People are also going to want to save money, and so a lot of our focus right now and you're going to see started a lot of marketing around this is save money check lift. Now. I want to be super clear here, it's not if I look at the competitor that we always have a better price. Of course, we try to, but we don't always you know, sometimes you know, all sorts of things happen. But over time, if you check both apps, you're going to save some money. And certainly compared to buying a car of your own and dealing with all the maintenance, you're going to save some money. So it's not the only thing I want to say, but I actually think it's an important thing to say, particularly in a world of sort of some economic instability. Is this is a good way for you to save some money. And frankly, I'm proud of our cost position. I'm proud of our ability to offer a great price every single day, you know, billion times a year.

00:28:54
Speaker 2: So let's talk about you versus your competitor. Lift has always been framed as of the underdog to uber. Is this kind of a coke and PEPSI story? What what are the advantages of being number two? Remember the old was it?

00:29:09
Speaker 3: Avis?

00:29:10
Speaker 2: We're number two too? We have to try harder.

00:29:13
Speaker 3: Absolutely, So I like being number two. And it's maybe a funny thing to say, but I do think it means you try harder. You wake up every single morning and you say, I got one job, which is to frankly, you know, do a great job for my riders and my drivers, such that maybe over time I can you know, I can, I can overtake the other guys. You know, I guess the way to think about that is, I think the right number of ride share companies in most markets is probably two. You know, it's a it's a capital intensive business, not because you own the cars, but because you own a lot of server capacity, and you know, it's quite complicated to figure out you know, pick up and drop off locations and customer service. People leave their phones in the car about eight thousand times a week. You know, it's just all sorts.

00:29:56
Speaker 2: Of right, especially Friday party night.

00:29:58
Speaker 3: Right there, you go, it all kind of comes together. There is something, There is something to that. And by the way, we have really cool innovation coming out there. We'll bring your phone back to you automatically. But that's a separate story. But anyway, so in a funny way, it's it's it's not a bad thing to be in sort of a two player position because you really only have one competitor, and frankly, if you spend too much of your time thinking about that one competitor, you're probably losing the script. Because guess what, there are a lot of drives rides that people aren't even taking on rideshair at all. Okay, so you know, back to this question. You know we're a customer obsess company, and you know this is going to be the thing. This is why we're growing, you know, mid single mid double digits, you know, fifteen to twenty percent a year on ear. It's why we've become profitab it's why we're spinning off cash. And I think that is a good place to be, particularly when I look at the other guys who I tend to think of, frankly as a more I'll call them sort of financially and maybe maybe technologically driven. Maybe I don't know exactly how they describe themselves, but but I don't get the customer obsessed vibe. Huh.

00:30:53
Speaker 2: So that's kind of interesting. Let's talk about an example where there's no customer are obsessed vibe. So I use Lyft, I use Uber. It feels like on Uber, the way it measures time is sort of an alternative reality. Hey we'll find a driver in three minutes. It takes nine minutes. Hey the car'll be here, but in eleven minutes, it's there in twenty three minutes.

00:31:18
Speaker 3: Like they.

00:31:21
Speaker 2: The app is very full of bs. It consistently lies I'm curious, it's just just a logistical issue that everybody has to deal with. Or and we know a lot about the history and culture of your biggest competitor, is this a culture problem that you know their history has a lot of bad behavior, a lot of let's just call it questionable legality. I wouldn't go so far as to say fraud, but they did a lot of bad things. Does that show up in how the app behaves? Or is this just no Google Maps is tough to work with. This is a logistical challenge.

00:32:00
Speaker 3: You know it is. It is a logistical challenge. But but I think you're Look, I'm not going to character you did a marvelous job characterizing me.

00:32:09
Speaker 2: I'm I've got liability for slams.

00:32:12
Speaker 3: Are fantastic, exactly. So Barry's got a whole second.

00:32:16
Speaker 2: Hold on, Well, you were a lawyer, right, yes, yes, Oh there we go. But I'm recovered. I understand recovered lawyer.

00:32:21
Speaker 3: But you did just hear a lawyer very carefully parts of these words. Okay, listen, I won't comment on that. What I will say is we are very focused. For example, you're talking about reliability. Oh my goodness, you talk to my team and they will, they will they roll their eyes maybe would be one way to say it. But the number of times I talk about reliability internally is is high because I am obsessed by saying we're going to make a promise, we're going to meet the promise, And starting in a couple of weeks, we're actually starting to do some more work to actually surface that promise even a little bit more visibly. We do it today for airport pickups. If we're more than ten minutes late for airport pickups, we pay you up to one hundred bucks, no questions asked. Really yep, and we rarely have to do that. Our reliability rate is above ninety nine percent for schedule report pickups. Yeah, so we're very very focused on that. You know, I will say, look at business school, there's a very famous class which has a weird technical name, but it's basically about incentives and behavior. And what's the name of the class, Like I was in physical a long time ago, I think it's called CCMO is the is the and I don't even remember what it stands for anymore. It's probably called something different today, but it really is about how incentives drive behavior, you know, financial incentives and other incentives, and an incentive alignment and so forth and so on. There is an incentive in the the sort of the on demand app world not always to be truthful because if you if you over promise something and then you kind of hook a person in, you know, what are they going to do if they cancel or whatever. It's just going to take them more time. So and that is an evil and pernicious problem that is kind of baked into the model, and we just reject it wholeheartedly. Doesn't mean we never make a mistake, but if your car shows up later then we estimated it's not it's because we made a mistake, and we are trying over and over and over and over again to eliminate those their defects right and then start to guarantee it over time.

00:34:13
Speaker 2: So you are crunching a lot of numbers, You're seeing a lot of data in real time. I'm kind of fascinated by the concept of what at lift HQ the dashboard looks like, what sort of data you're you're watching constantly? What's the most surprising set of numbers or charts that come across that.

00:34:34
Speaker 3: Yeah, this is a great question. I mean, yes, So the answer first is just you know, validate. The premise is absolutely you know, an enormous amount of real time data, you know, two to three million rides every single day and now worldwide, so we're very active and in fact, we have whole cool maps that are you know, simulations in such a behavior, particularly around storms and all sorts of crazy steps. Anyway, back to your question, Look, there are a couple of metrics that I think might surprise you that we pay as much attention to as we do, and I'll give you a specific one because it kind of helps tell the story. When I joined, about fifteen percent of the time drivers would cancel on you. Now this is infuriating, really yeah, that high.

00:35:10
Speaker 2: I mean every now and then on your competitor, i'll see your cancelation, but typically it's Russia hour, someone's stuck on the other side of the city. They're not going to make it, so rather than get that ding, they just cancel and find someone by them.

00:35:24
Speaker 3: So today's world, it is less than four and a half percent on our app. So we've brought it down by a factor of three. Yeah, exactly less and so oh no, yeah, no, that's it's just slightly around that, Yeah, so how have we done that? Well, it's not just there on the other side, it's maybe we didn't give them enough information right up front, right, so for example, how much they're going to make or what neighborhood are they going to drop you off at? Maybe and by not enough information, maybe we gave it to them, but the font was a little bit too small for them to see it right, or maybe it wasn't on the screen, you know, quite long enough, or maybe we gave you a ride that we didn't know was very very unlikely for you to want because of your past history or whatever it is. So now we spend a lot of energy and we've just been grinding away this year after year after year because it's so infuriating to riders. That's an example of a sort of specific metric that we're looking at, you know, by the day.

00:36:23
Speaker 2: Huh. Really really interesting. Two kind of related questions to the growth of Lift. Your last quarter's earnings call you said, or maybe it was a previous one, twenty seven percent of North American rides or linked to a corporate partnership Chase, DoorDash, United, Hilton, et cetera. What is that strategy? Is that about customer acquisition margin, like what goes into those sort of big partnerships.

00:36:50
Speaker 3: Sure, so you know, as you say, we have, we have tens of millions of people who use our service every quarter. It's about fifty million a year. And again this is back to sort of the Amazon philosophy. You've got to compete for those customers, right, You've got to compete because you know they have alternatives and in fact, there's you know, another company out there that some people know. Okay, So one of the ways you compete is you say, gosh, it's not just about the ride, it's about the relationship. And maybe it's a relationship you already have with another company. So you mentioned United Airlines. United Airlines has now been a partner of ours for about the last six months. It's been a wonderful partnership already because the United Airlines Mileage Plus program is incredibly well built out. People are very very loyal to it. What can you do on Lyft You can now earn miles so that you can take a vacation, you.

00:37:38
Speaker 2: Know, same with Hilton Honors, and same.

00:37:40
Speaker 3: With Hilton Honors exactly. There We've been a partner for many, many years. The big innovation on the mileage plus side is you can actually spend your miles on lift as well, which almost feels like free rides. Right. It's just like, you know, you get you know, two hundred miles for five hundred miles whatever for taking an airline trip, and you spend you know, a small segment of those on a lift ride. So these partnerships, you sort of asked what their sort of the method behind it is. It's about customer acquisition, for sure, but it's also about customer retention, you know, because if you're in the United ecosystem or on the DoorDash side, or Hilton or Alaska Airlines or built primarily here in New York City and other cities where they are active, and you want to either earn or burn miles or points, I'm more a great place to do that.

00:38:22
Speaker 2: Huh. Really really kind of interesting. I read an article from Reuter's Smaller US markets and college towns have been meaningful growth drivers. Curious, why are those markets underpenetrated? What did you guys figure out that?

00:38:37
Speaker 3: So part of it there has been just a little bit of you know, you might say, neglect from the right business for a while, and we realized about eighteen months ago that a large part of the town. Just to frame this again, total addressable mark total, this warm market exactly about one hundred and sixty billion rides a year that people take in their private cars across the United say it one hundred and sixty billion. And remember do a billion, the other guys might do three or four, maybe two or three billions. So four billion out one hundred sixty million, Okay, So there's a lot of adjustable market left for us to go to. And we've been in places like New York and San Francisco and Chicago for over a decade right now. But some of these smaller towns, you know, the Indianapolis of the world, the Saint Louis Is the world, as well as college towns where basically, you know, nobody has a car compared to the population. You know, they just look like good opportunities for us. They're complicated from a marketplace management perspective because anytime you go to a newer geography, you've got a first, make sure you've got enough drivers because otherwise it takes too long to get picked up, and you've got to make sure you've got enough riders because then driver. If not, then riders drivers won't make enough money. So it's it's quite complex to invist. The chicken and egg problem is the chicken egg from over and over again, which again is why back to an earlier part of the conversation, it's really quite hard at this point to come into the market fresh. You know, you're not going to find a lot of folks who want to come into a well served market. But anyway, so we just started to focus on and our data scientists and our mar marketers really kind of went to town and it's been a big source of growth.

00:40:03
Speaker 2: Huh, really really interesting. Coming up, we continue our conversation with David Rischer, CEO of Lyft, discussing the future of transportation technology. I'm Barry Ridults. You're listening to Masters in Business on Bloomberg Radio. I'm Barry Ridults. You're listening to Masters in Business on Bloomberg Radio. My extra special fascinating guest is David Riescher. He is the CEO of Lyft, and we have been discussing the future of transportation technology. We have to talk about AI. We have to talk about autonomous vehicles. But before we do, I have to ask you two really interesting questions. One is, how do you solve the problem of even so people leaving their phones in the car and when they get out and suddenly it's a big penal. They asked, somebody has to come either drop off the phone or whatever. How do you, as a customer obsessed company, how do you solve that problem.

00:41:15
Speaker 3: I so love this question because it is an experience every single one of us has had, and it is both infuriating and incredibly stressful because all of a sudden you realize, oh my god, my entire life is driving in the wrong direction and I don't even know how to contact the company at this point, okay.

00:41:31
Speaker 2: Close to the number is on your phone.

00:41:33
Speaker 3: And the phone is in the car, and you're like, I want to hold my phone to call the phone, but I can't do that. It's very, very stressful. So here's what we've done. We actually are working. We're doing a huge amount of work on this just to be really customer set. The first thing is automatic detection. So if the phone starts to travel away with the driver after you know you've been dropped off, yeah, that immediately automatically alerts the driver there's probably a phone in your backseat. It requires a little bit of work on the rider's side. We're still trying to figure out how to riders to opt into this because they have to share a little bit more information. But we're still working on that. But regardless of whether it happens automatically or manually, the second thing is we've got a whole web portal, so you don't actually have to use your phone. You can and you don't have to log in. But really the big innovation is this. We used to have it's called sort of out of band, so the whole like return the phone thing, it becomes almost a separate process. And frankly, in the past it's almost felt like a bit of a negotiation with you in the driver and nobody liked it. The drivers didn't like it because it felt like it was sort of an annoyance. The riders didn't like it because they're like, oh my god, I sort of feel like I'm being held hosted here, a terrible thing. Now it's a whole automated process, and basically what we realize is we should just treat it like any other ride. So it's basically the phone is getting a ride back. So what you get to say as a rider is yes, please bring my phone back. I know exactly how much is going to cost. It's going to cost just the exact same amount as if I'd taken a ride to that exact place where the phone is, and the driver gets it in their queue, just like they would get any other ride request, and it gets returned to you typically. I was just looking at this data and it changes every single week. But we're now getting to the point where a large percentage of our phones are being rider's phones are being delivered back within an hour, which is the apps of cold Stand.

00:43:09
Speaker 2: So let's use technology and cut that on the app opt in to avoid leaving your phone in the car via Bluetooth, not on each ride, but just once on the app, and then when the person when the ride is over, you've arrived and the person gets out, if the phone doesn't leave the car right there, and then the driver should lower the window and say, hey, you let that car you're in the back seat. If that technology, and that doesn't seem like you're changing or creating new technology, You're just applying existing technology. Why take an hour? Why not take thirty seconds?

00:43:49
Speaker 3: And this is now where you realize that all technology problems are ultimately human problems because in order for that to happen, a person has to have opted in. They've got to click a button. Most people are either skeptical of that or they're not paying attention. So now that's our trick, is to try to figure out a way to really encourage people to do that. As you say, you only have to do it once. But that's going to be the next big, next big focus.

00:44:09
Speaker 2: So let's stay with that theme before we really move too far away from people and towards technology. You drive for lift every six weeks or so, which seems kind of bonkers. What what have you learned sitting in that seat that you can't learn from the executive suite or the boardroom?

00:44:28
Speaker 3: So much, so much? And I know, uh, you know, we're all busy people, you know. Here, I am busy senior executive CEO of company. And my god, you know what, I got time, right, I got time. I can't jump in the car. So and here's why. So I learned stuff about being a driver and I learned something about being a rider every single time. So I'll give you an example of each very quickly. On the driver side, I learned how important a feature is that we've developed over years and refined called uh stay within area. And that's because there are actually two features next to each other, one stay with a narrow one arrive on time. Let me actually focus on a arrive on time. What that means is I've got a kid to pick up at the end of the day, or I've got a date with my wife tonight, or I've got a doctor's when I'm a three o'clock in the afternoon, and so I need to figure out a way to organize my life such as my last ride is going to put me, you know, right where I need to be by a certain time that you know, if I look at the gig economy, one of the real gifts of the gig economy is it allows you to integrate your work into your life in new ways. Again, I don't have to call my boss and tell them I'm going to be late today. I don't have to do anything like that. But sometimes I do have other things in my life. Maybe it's another job, maybe it's an obligation with my you know, with my parents, or whatever it might be. So anyway, that's a feature. It worked pretty well when I started. It works very well now, And in part it's because I give a lot of feedback to the team about how to how to make that better and how important it is to get that exactly right. And then on the rider's side, I mean, every time I take you a rider in the car, and of course I asked them why they chose us versus the other guys. Sometimes it's because they say, oh, Chase Sapphire Reserve. I'm a Chase Saffire Reserve a car holder, and you guys have a relationship with them. That's great. That gives me a little bit of data of how important it is. That's a points relationship, points relationship, and you get all sorts of You get ten dollars every single month to use as lift credit. And look, I can look at the data just like anyone else and realize the number of people who are using that. But there's just no substitute hearing somebody you know go off about how they much, how much they love that card and how important that partnership is to them. As a generic example. And then a specific example involved a woman that I gave a ride to. This is now about almost two years ago, but it still really, you know, kind of resonates with me where she would wake up every single morning and depending on what the price was of getting from her home to her job, because the prices would bounce around a lot, she would either take a lift or maybe take the other guys, or drive herself or stay home. And it was a source of stress and concerned her every single day. She would literally wake up an hour, you know before she had to leave, just to sort of check prices. And it just made me realize how much surge pricing is is customer hostile, nobody nobody like.

00:47:01
Speaker 2: It starts to drizzle a little bit and suddenly it's a thirty dollars surcharge, and I know people are infuriated by it.

00:47:07
Speaker 3: And they should be. And here's the problem. This is the difference between you know, if you're an economist, you love this, right. It's all supply demand balancing in real time. It's just unbelievable, like a like a perfect science experiment. And if you're a real person, it just it just bugs a crappety you. So it really drove home to me how frustrating this was. And it was literally a Friday morning when this woman had donuts and she was bringing them in to see a coworker for his birthday and she's like, I can't work from home today. I'm so glad that Lyft was, you know, was reasonably priced. So that's what's led us to both take about fifty million dollars a year out of surge pricing. We've really tried to get rid of it as much as we can, can't completely eliminate it, and also introduce a product called price lock that allows you to lock in a price on a route.

00:47:47
Speaker 2: So tell us a little bit about price lock. What does that do? Yeah, so I'm not familiar with that aspect of the yep yep.

00:47:54
Speaker 3: So what it's really meant for people who commute the same root every day and they don't want the route to go from twenty to thirty to four because you say it right, and by the way, to be very clear, like, there are good reasons for surge pricing, right, it's a very good way for us to encourage drivers to drive when there's more demand than their supply. But because it's very frustrating for riders, we want to give people a way to kind of opt out of it. So for a given route, you know, from point A to point B, if you want to lock in a price, we basically say, here's the average price over the course of a month. If you want to lock in, I think it costs four ninety nine a month per root. That's all it takes. And it's been super popular for people who just want to get that out of their lives.

00:48:28
Speaker 2: Huh, really really really kind of interesting. So let's talk a little bit about autonomous driving. I was in San Francisco last month. Way mos are everywhere, that's right. Tell us a little bit about what lift wants to do with autonomous vehicles or these just shiny objects or these the future.

00:48:48
Speaker 3: They're the future. They're the future. It will take a long time for this future to come. It will be very unevenly distributed, but they are the future. And the basic reason why is they are a reliable product, and they're a safe product.

00:49:01
Speaker 2: You know, it's safer than human drivers. They are substantially right.

00:49:04
Speaker 3: And it's because they not only know the policies, but they follow the policies. You know, they tend to follow the rules and they don't get distracted, you know. So not to say some crazy thing won't happen one time out of a million, but ninety nine point nine nine nine percent of the time they'll do the thing that you expect a car to do, which is, you know, keep it. It's it's right or safe. So so okay, so that's that is coming. So now, you know, as a as a business person, you know, you have you have a choice to make, right. You can either embrace this or you can sort of not. And and the thing is, in a sense it's a choice, but in another sense it's not. Because you've seen Kodak you know whatever, full right, But by.

00:49:40
Speaker 2: The way, Kodak invented the digital camera but didn't want to accounibalize their own film business, and how did that work out?

00:49:47
Speaker 3: Exactly? Not not so well. And then you look, on the other hand at maybe a company like Netflix that invented the DVD by mail business just sort of you know, you know, sort of set Blockbuster aside, but did such a good job surfing from that to you know, streaming and now to original content. Right, they're a great company in so many ways, but they were they were relentless, fearless about cannibalizing their own business to sort of, you know, get to the next thing. So that's the shift that we're right in the early early early days of it will be another platform shift. But we're in a very fortunate position. And here's why. You know, we have millions of riders, We have millions of billions, billions of data points about pickup and drop off location and pricing and so forth and so on, and we have a whole subsidiary called flex Drive that does fleet management, which I can come back to in a couple of seconds. But these are going to be some of the building blocks of the self driving or I really should say hybrid network of the future, because that's the last thing I'll say. Just as sort of intro self driving cars are going to come little by little by little by little, human drivers are going to be around for a long, long, long time. There is not enough self driving cars in any given market to satisfy peak demand on you know, Friday afternoon at five o'clock rush hour or what have you.

00:51:01
Speaker 2: So this is not a three, four or five year transition. This is a ten to twenty year transition. Is that about right?

00:51:07
Speaker 3: Think about it as a decade transition. Yeah. And even again, the word transition I think is maybe, you know, not quite right, because the economics of an expensive car don't really lend themselves to having a whole bunch of them sitting around at two in the morning empty. You really, I think, want a hybrid network for a long long time for human reasons too, right, You might want someone to help you with your luggage, or maybe even someone to ask you how your day was. But the economics of it make it such that it's much more likely this will be a hybrid network for at least a decade or more.

00:51:37
Speaker 2: So that kind of raises an interesting question. What exactly is Lyft? We know it's a ride hailing company, it's also a transportation market clearing mechanism, it's a consumer brand, and it's also a logistics platform. Like where is the future growth coming from?

00:51:56
Speaker 3: I mean, you know a little all the above, right, So as you say, I mean the thing people know lift the most for are you know, human driven cars, you know, picking you up and dropping off. And as we were just saying, that will become a mix of human driven and you know, frankly robot driven cars. What you may not know is Lyft also runs the bike shore system. Here in New York City where we're.

00:52:16
Speaker 2: City bikes are run by Lyft. I do not know that.

00:52:19
Speaker 3: That's exactly right. So we run city Bike, We run the program in San Francisco, we run the program in Chicago, we run the program in Boston, in Portland, Oregon. And then we also supply the technology and the bikes in London, in Barcelona, in Madrid, you know, many many countries around the world. This may seem like sort of a small thing, but if you've been to a city like New York or London, you'll know that cities are very very aware that they want sort of multimodal transportation. So that's going to be, you know, a big part of our future as well. And then look, you know, someday, who knows, maybe boats, maybe vertical takeoff, airlines, you know, who knows. But I will tell you that our real focus right now and we will always be is this. This is our sort of purpose is sur and connecting. I want people to be out and about and connect with each other in any possible way we can. That's really what I want.

00:53:06
Speaker 2: So you mentioned London, Yeah, what are the plans for by do robotoxis in robo in London. This is going to be a pilot program that could potentially scale up dramatically like the Weimos in San Francisco.

00:53:21
Speaker 3: That's right. So again, let's think about the self driving car world for a couple of minutes. The technology is being developed worldwide. It's being developed in the United States. Weaimo of course is the leader, really the worldwide leader. Zooks, which is owned by Amazon, is much much smaller, but you know, trying very hard to come up behind Waimo. And then there'll be you know, many others, including maybe in Nvidia and companies that aren't even really in the space now, but we'll want to sell their technology to different Oh yeah, it's different car manufacturers. There's also technology coming out of China by do is sort of the Google. You think of it as kind of the alphabet of China. And there are many many others. There's a company called we Ride. There's a company called Pony, There's a company called Momenta. There's a company called Jie. I was just in China a couple of weeks ago looking at the incredible just growth of technology there, both hardware and software type technology. Okay, so that's all background. It's going to be deployed worldwide and in the United States, Chinese technology is not super welcome for obvious reasons, but Europe is taking maybe a little bit of a more sort of economical approach where they're kind of looking at different technology providers and saying, let's experiment. So in London we're partners with by Do. By Do has a very very highly regarded self driving platform and we're just in the early days of rolling it out there. It's called an art six car. This is sort of behind the scenes stuff and it literally just rolling off boats right now and it'll be commercialized next year.

00:54:48
Speaker 2: So I'm looking at the current crop of autonomous vehicles, which are essentially converted traditional cars, But you really do you need that front driver's see? Can you change up the internal layer? Like what are autonomous vehicles going to look like? Not in twenty sixty but in a couple of years.

00:55:10
Speaker 3: Yeah. So again, it's such an interesting time to be in this industry. And it's exactly you know, as you're saying, like, do you really need a steering wheel? Do you really need you know, accelerator and breaks? You know? Zeokes as they say they're in Amazon subsidiary, they would say you absolutely don't. And they have a purpose built vehicle that doesn't have either one of those things now for regulatory reasons, for human acceptance reasons, and so forth, for manufacturing reasons, that's going to be slower to roll out because you can't rely on, you know, the big OEMs to produce a car like that that's its own vehicle. So I think what you're going to see over the next three to five years is an enormous amount of new innovation in the in the car space. It won't just be you know, there won't be a driver. It'll be you know, you'll have seats that face each other. You know, you'll have seats that completely recline because you've got more space in there. You'll have different luggage configurations. You'll have some of them will feel more like you know, party buses, some of them maybe you know, corporate shuttles that just don't have drivers. A lot of new stuff is going to come in the next couple of years, step by step, because again, you know, hardware is hard. It takes a long time to build it out. But you know, you look five years out and I think you're going to see a lot of cars look pretty different from what you see today.

00:56:16
Speaker 2: I'm unfamiliar with Zekes and Amazon's relationship with them. But if I recall correctly, Amazon was an early investor, took a big chunk.

00:56:24
Speaker 3: Of Rivian, that's right.

00:56:25
Speaker 2: And all of the electric Amazon delivery vehicles you see are essentially the Rivian platform repurposed for commercial use. That's right, Zooks plus Rivian is that the direction Amazon is going? And do you guys, does Lift whose CEO has a relationship with Jeff have a relationship with Amazon.

00:56:49
Speaker 3: We do have a relationship with Amazon. Of course we're huge consumers of AWS, which is andy current CEOs you know, kind of kind of pride and enjoy and for sure we'll end up using uh, you know, we'll look, everyone is going to end up partnering with everyone. That's That's the interesting space we're in right now is if you're in the if you're in the business of developing a self driving car, it's billions of dollars of R and D billions of dollars, and so you want as many customers as possible. And then if you're in our business and the business of moving people around and connecting people, you want to have multiple suppliers of that technology so you're not beholden to anyone. Some of that is just being you know, a smart you know, business person. But some of it also is you know, technology goes through its own you know, fits and starts. Look at what happens with the airline business when all of a sudden, you know, Boeing has a problem with one of its its units. Uh, you know, they stop manufacturing those for a time or they're grounded. So I don't want to overdramatize, but you know, anytime new technology comes out, you're going to find you know, some of that happens as well. So all of us are kind of in multiple Uh you know, let's say maybe polyamus relationships might be one way to well.

00:57:53
Speaker 2: Don't you have to be play? You can't lock into platform dependency too early, otherwise you end up owning beta max and what good is that? And I know half our audience has no idea what.

00:58:04
Speaker 3: The hell that is?

00:58:05
Speaker 2: So there we go it old school reference. Yeah, but what I mean when you commit one way? So let's talk a little more about the autonomous ride hailing. What are the big concerns? Is it safety? Is it regulation? Is it winning the consumer's trust? What are the economics of managing a fleet like that?

00:58:25
Speaker 3: Again, so many interesting questions here. Let's start with the customer side of things, right, So the first order of business has to be building customer trust and adoption for this new technology, because you know, it's a car that drives itself, which is magical but also can be a bit intimidating or you know, even scary for people who you haven't seen the technology. Lift obviously has a lot of value to add right there, because it's a brand that already people trust, they understand, you'll be able to opt in or opt out of getting it. I was just in Atlanta a couple of weeks ago, or we're have an experiment, small deployment with a company called Mame Mobility, which is also in the self driving car space. They're Toyota, Siennas they pull up to you and all of a sudden you get in. It's kind of a whole different type of experience from which you've probably experienced in the past. But because it's got lyft behind it right on the door already, people sort of say, okay, great, I kind of understand this company and know something about it. Okay, that's great. So then you kind of have to work yourself down the stack. There's all sorts of technology problems that you have to solve as you integrate their platform and us, and then someone's got to manage these cars. And this is worth talking about for a couple seconds. In traditional ride share, the driver is responsible for their own car, right they put gas in it, or they charge up if it's electric, They keep it clean, hopefully they keep it maintained and so forth. But in the self driving space, at least for the next three to five years, most of the car ownership are going to be professional fleet owners. Know they're going to buy twenty fifty, one hundred, five hundred, and they're going to kind of manage these as a fleet, and that means that they've got to be again charged and maintained and cleaned, but they have to be done at kind of at a professional level. That's the sort of stage where we're in. We've had a subsidiary for many years called flex Drive. We actually own about ten thousand cars on the lift platform for drivers who don't want to drive their own car, and we are responsible for maintenance and keeping them cleaned and so forth and so on. So we actually bring a lot to that as well. And I think that's one of the reasons why we like the economic profile of self driving cars. They don't have insurance as high, for example, as personally driven cars. But also we like the economics of our fleet management subsidiary and think we can service these at an industry leading rate and therefore hopefully make more money on the asset than anybody else.

01:00:33
Speaker 2: Is there still going to be a future for people who today you would think of owner drivers who just want to own autonomous vehicles and lease them out or send them out into the lift network. Like I'm crunching the numbers in my head as we're speaking, and I'm like, oh, that could be a ten to twelve percent return on investment, not bad when bond yields are four percent, three and a half percent, one hundred percent.

01:00:57
Speaker 3: I mean, there will be a time where, you know, if you fast forward, you know, five years or whatever, maybe more many people individual owners have cars that can drive themselves. And then there's a question to your point of can you put that on the network? The answer is absolutely, you'll be able to put it on the lift network and it'll come back again, cleaned and charged. Because of the flea management side of things.

01:01:15
Speaker 2: That sounds really really interesting, you know, it's funny because when the ride apps first came out, there was a little bit of a lag before people got comfortable. What do you mean I'm getting into a stranger's car. I imagine we're going to go through the same thing. What do you mean I'm getting into a car with no driver. It feels like the transitions are happening faster and faster, same sort of question. This isn't a ten twenty year thing. This is a couple of years before people are forget people under thirty who adapt so rapidly, the middle part of that age bell curve, the thirty to sixty. They're going to adapt to this pretty quickly over the next couple of years. How do you think about the different segments of consumer when it comes to autonomous driving?

01:02:04
Speaker 3: Yeah, you know, I think as you're suggesting, you know, younger people do tend to take up new technology, you know, pretty quickly. But in this case, I do believe that many people, after they've had a couple of rides and realize that it feels very safe and reliable, I think they'll flip from skeptic to kind of fans, you know, pretty quickly. Now, I will say policy makers, you know, they have their own you know issues, so and some of that can be very local. So you may find some cities that just say we just don't want them on our streets for a period of time. You may find conversely, other cities that say, bring them because we want to feel like a city of the future. So I think there are going to be some policy issues. There are also some infrastructure issues. Remember that, you know, av's also tend to be evs. Evs require charging. Charging requires infrastructure, and not every city is going to have the amount of electrical power. I mean, this is kind of a side issue. But if you listen to you know, Jensen for example at Nvidia talk about what could end up holding the United States back from its next pick leap, a lot of it comes down to power structure in this country, right, So anyway, so there are many different kind of bits and pieces all the way from consumer adoption to physical infrastructure to policy and so forth. But I think again, over the next three to five years, I think you're going to see a real shift, mostly because consumers are going to try them and like them, and then they're going to be saying, hey, you know, faster please.

01:03:17
Speaker 2: So here's the crazy thing. About avs that I'm still kind of shocked about that relies on visual on lidar, on radar and all these other technologies, but there isn't a whole lot of infrastructure built into the roadway grid. Wouldn't be that difficult to create a series of RF devices that specifically geared for autonomous vehicles that like, every now and then if you're letting the car drive yourself and there's an exit or a merge or like, it's not great with those sort of things today because there's no real infrastructure. It's relying on a technology not built for autonomous driving. Is there any sort of motion towards Hey, let's everybody that's doing autonomous come up with set of standards and have the government implement this into the highway system.

01:04:16
Speaker 3: I mean, the short answer is no today and long term for sure. And the reason no today frankly is again, you know, anytime you see these platform ships, you always have competition for sort of who gets to sort of own the platform, right, and individual companies all have a huge incentive to say, you know, I want to do it my way, because if my way becomes the standard, then everyone else kind of follows along me and I get to sort of set the standard. Over time, though, you tend to see that those things that doesn't become a long term competitive advantage typically, particularly for this sort of infrastructure, And so I would fully expect over time, it's just in the same way that you can start to see charging networks kind of harmonize, that you'll see some sort of you know, kind of federal level. But we're years before that, right.

01:04:59
Speaker 2: We did see that sort of standardization take place in a lot of other technologies, and suddenly you're not competing on a standard, you're competing on highest quality, lowest price, et cetera.

01:05:11
Speaker 3: Exactly right.

01:05:11
Speaker 2: But you would think that if the cars literally knew exactly where the road was, it would be even that much safer.

01:05:19
Speaker 3: You would think. But I would say right now that the technology is evolving so quickly at the car level, and really the safety is very, very, very impressive. And and of course, look, I know, you know, tomorrow morning you're going to open up, you know, a newspaper or an app, and you're going to read about some strange thing that happened, you know, in some strange part of the of the world with a self driving car. And I'm going to tell you that that is going to happen, and that's you know, one in a million as opposed to you know, one in you know hundreds, which happened every single day with human drivers.

01:05:49
Speaker 2: Yeah, those are the clickbait headlines, not the statistically significant practice. All right, So last question before I get to my favorite questions, I ask, well, my guests, when it comes to transportation technology, what are we not discussing as a society, as a government, as consumers that we really should be. What is kind of getting overlooked in this rush to new technology? It could even be something that you guys are focused on, but a lot of people don't realize is oh no, this is really significant and the public hasn't quite grocked this yet.

01:06:23
Speaker 3: Yeah, you know, I'm going to come back to the basic role that technology plays in people's lives to help them live their absolute best lives. I'll tell you something that I have a lot of passionate about personally, and that is as people live longer lives, one of the things that is very predictive of their quality of life is how much time they're spending with other.

01:06:43
Speaker 2: People out socializing.

01:06:45
Speaker 3: Exactly, very very highly predictive of a healthy long life, and as we as a country are getting older, which we are demographically, that is going to be an enormous shift where you have so many more people in their sixties, seventies, even eighties who want to live healthy, vibrant lives. And so one of the things I'm really quite proud of with Lyft is, you know, Lift Silver is a particular product line that we've developed over the last year that's really focused on, you know, helping older folks get out. The app's a little easier to use, the cars are really easier to get into, the drivers a little bit more experienced. I think that sort of the intersection between societal trend and the type of work we do in transportation is really quite deep, and you know, maybe just as important ultimately as you know all of our conversation around medicine and so forth and so on, is keeping people out and about. And I know it's you're an or ring where I am as well, it's a uh or maybe or not.

01:07:36
Speaker 2: I don't know, No, I am. My wife wanted to get so we got a pair and she got bored being told she's stressed all the time and stop wearing it. So now I'm wearing funny, so we both we each have one, and I'm the only one who still.

01:07:47
Speaker 3: Wears how funny. Okay, actually my wife and I did the same. She said, I get a little tired of saying, you know that it's telling me exactly I'm stressed or I'm not sleeping well. But at least for me, it's a sort of nice nudge to get good sleep and frankly, to kind of keep an active life. And so so I see this space the transplation pieces is somewhat similar, like, I want technology that kind of helps me live my best life, and I think transportation plays a big role there.

01:08:07
Speaker 2: All right, so let's jump to our speed round our favorite questions, starting with tell us about your mentors who helped shape your career.

01:08:16
Speaker 3: Oh gosh, I love this question because I think it's so important for us to remember that we all stand on other people's shoulders. A list a few. Of course. I've worked for Jeff Bezos a lot. I've mentioned him, but I wanted other people first, Big Boss, a guy named Todd Nilsen. Todd really taught me the power of a great story and also the importance of really listening and watching closely customers, so he taught me to big things there. And then a guy named Peter Spirow. He was the board chair World Reader for many years. He and I sort of knew each other back in the Microsoft days, but was the board chair for the nonprofit. I ran so focused on the team, so focused on the team. You're only as good as your team. Really learned a ton about management and leadership from Peter.

01:08:57
Speaker 2: Huh, really interesting. Let's look about books. What are some of your favorites. What are you reading currently?

01:09:02
Speaker 3: Oh Man, I just finished a book called Good People. So I tend to read some fiction and some nonfiction. So I'm currently reading a book called Apple and China, all about Apple's entrances into China and ultimately the importance that China has and frankly the power that China now has over Apple. And then Good People is a fictional book about an Afghan Afghanian a family from Afghanistan that moves the United States and is either a model family or terrible people. And it's very very hard to know which, and it's sort of the book sort of flips back and forth. Remember when I said the books kind of teach empathy and sort of different respectives. This one does a good job of that.

01:09:42
Speaker 2: Huh. Really interesting. What about streaming? You listen to any podcasts or Netflix, Amazon, whatever? What keeps you entertained?

01:09:50
Speaker 3: I do. I am a podcast guy. I have to say, though, I'm kind of traditional when it comes to podcast I listen to The Daily from the New York Times pretty regularly, and I think most of it is because I have so many things in my life that are sort of There's so much content that comes at you that's sort of superficial, and at least with The Daily, I feel like I get to go a little deeper on a subject. You know. It tends to be a kind of a half an hour, you know, deep dive on a particular thing, and I do feel particularly I also read The New York Times. I know it's sort of traditional in that way. So if I read an article and then I kind of hear a podcast on the same topic, I do feel like I've actually gotten maybe a little bit smarter about something, you know, beyond the surface.

01:10:28
Speaker 2: Let me just push back, ever so slightly on how The Daily has evolved, because when it first came out and I was a regular listener, I don't want anybody telling me about the story that's in the paper that I can read. They used to kind of do the background. Hey, how did you start investigating this? What led to this? Tell us some interesting stuff that didn't make it into the article. It was really inside baseball and that stuff is kind of fascinating now whenever I check it out. It's the person I don't want to say reading the story, but it it feels like they've left a lot of that, you know, behind the scenes stuff back three years ago. It's still It's become one of the biggest podcasts in the world.

01:11:12
Speaker 3: It's a giant. Yeah, yeah, yeah, that's interesting.

01:11:16
Speaker 2: Anything else, anything else you listen to or watch.

01:11:19
Speaker 3: I mean, you know, I'll mindless TV. I love, but I can embarrass myself. But tell me all that that sort of stuff. Yeah, I We'll stick with the daily.

01:11:27
Speaker 2: We are in the golden age of mindless TV. And it's not you know, if you're watching The Crown, or Landman or three Body Problem. There's so many fascinating shows out there. It's not like garbage Time like it was when I was a kid.

01:11:43
Speaker 3: You are right about that, and I will say that my wife and I became obsessed with the pit as many people are. It is funny. It almost makes you feel like, you know, halfway to being an er doc myself, by the way you are not, so don't think that that's true. But what is hilarious is my wife's tolerance for some of the gore stuff is a little lower than mine. So she watches the pit with her hand kind of half in front of her face.

01:12:04
Speaker 2: The whole time. My wife did. We watched the first couple episodes. She's like, this is just too much. It's like you want to relax, and it's very but it's a great cast and it's a great setup for stories. Final two questions, what sort of advice would you give to a recent college grad interested in a career in either technology or business.

01:12:25
Speaker 3: So my advice here tends to be it's always sort of the same. And here's how there's so much temptation when you're picking your job early on to pick something that that sort of seems like it's going to be good on your resume, or maybe is going to make you a lot of money, whatever it is. This is sort of the temptation because it's so sort of in the air, maybe now more than ever because of social media, and oh man, the people that I see succeed are really the ones that say, yes, I have an economic reality. I have to sort of do better than that. But once the economic you know, reaction has been met, it is all about pick something you think you're really going to love and are going to be good at, are going to be good at. And I say that, like, you have to be a bit introspective of this. You know, maybe you love you know, selling, okay, great, so take a sales job. Maybe you love listening to customers. Great, take maybe a marketing job. Maybe. But I'm trying to make this sound maybe a little bit more interesting than follow your passions, because that's so trite, But there is something to it that really kind of being introspective about what you think you're going to just jump out of bed every morning and love doing tends to be a much more powerful predictor of long term success than people who try to optimize for that short term sort of get rich quick type of thing and then find themselves later realizing, shoot, this isn't really my thing. It's somebody else's thing. Huh.

01:13:40
Speaker 2: Really really good answer, and our final question, what do you know about the world of consumer facing technology and apps that would have been useful to know twenty five thirty years ago when you were first getting started.

01:13:53
Speaker 3: Wow. Okay, that's also a really interesting question. You know, I think I've probably gone through a similar arc to other people where I, you know, in the nineties, maybe even early two thousands, was sort of a universal techno optimist. I probably was in the camp that said technology is such a powerful force for the good. And you see me try to harness it with World Reader specifically, of course, trying to technology and get people reading. In that case, it did work. We've gotten over twenty two million people reading, so that's awesome, but oh man, it is hard not to see some of the just terrible costs we've paid as a society. And so I think maybe more of a mindset than a particular thing of just just be really aware that technology is so powerful and man, oh man, with great power comes that great responsibility. And I'm just a big believer that, you know, our best leaders now and I'm not necessarily putting myself in the category but are being really thoughtful about, you know, the good of technology, but also really trying to avoid some of the problems.

01:14:53
Speaker 2: Good answer David, thank you for being so generous with your time. This has been absolutely fascinating. We have been speaking with David Rischer. He is the CEO of Lift, one of North America's largest ride sharing networks. If you enjoy this conversation, well, be sure and check out any of the six hundred and thirty nine we've done over the past twelve years. You can find those at iTunes, Spotify, YouTube, Bloomberg, wherever you find your favorite podcasts. I would be remiss fine and thank the crack team that helps me put these conversations together each week. Alexis Nordega is my video and podcast producer. Jean Russo is my researcher. Anna Luke is my producer. I'm Barry Britoltz. You're listening to Masters in Business on Bloomberg Radio.