WEBVTT - Lyft CEO David Risher Talks Record Quarter, Spending to Grow

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Let's stick with earnings

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<v Speaker 1>more broadly and shares a right hailing company. Well, Lift,

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<v Speaker 1>we're currently up two point one percent. That's called it

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<v Speaker 1>after the company reported first called a profit. Actually, so

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<v Speaker 1>there's some anxiety among Wall Street about the expectations, but

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<v Speaker 1>it was all being ramped up by spending on international expansion.

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<v Speaker 1>Maybe that's what was hitting in the near term, the

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<v Speaker 1>preprofitability metrics. You've got to talk to the person who

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<v Speaker 1>knows all Lift CEO, David Risher. Look, we've had a

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<v Speaker 1>volatile trading day for Lift. There was some pressure as

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<v Speaker 1>people worried about, well, the amount that you're spending to grow,

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<v Speaker 1>but you're managing to push back on that. You see

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<v Speaker 1>to investor base that this is the right use of capital.

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<v Speaker 2>I really think it is. Yeah. I mean, look, we

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<v Speaker 2>had a record quarter, which is always wonderful, almost five

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<v Speaker 2>billion in bookings. You bit up thirty seven percent a

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<v Speaker 2>year on year, one point one billion dollars of free

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<v Speaker 2>cash flow. So that's great. So when you're in a

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<v Speaker 2>position like that, that allows you to grow and grow

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<v Speaker 2>even more. And as you noted, we've done some international

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<v Speaker 2>acquisation just in fact one announced a couple of days

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<v Speaker 2>ago GET in the UK. Look, I think it's a

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<v Speaker 2>great time to be franking in the rideshare business because

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<v Speaker 2>we're a really important part of a lot of people's lives,

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<v Speaker 2>and we're.

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<v Speaker 1>Growing like a weed, growing like a weed. Mandy blue

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<v Speaker 1>Bag intelligent sort of saying that supply growth for lift

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<v Speaker 1>perhaps is likely to trail some larger peers. I mean,

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<v Speaker 1>I talked to us about the adoption rate, the adoption

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<v Speaker 1>rate of your offerings, but the adoption rate in particular

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<v Speaker 1>of autonomous vehicles that you're starting to dabble in.

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<v Speaker 2>Yeah. So look, I think if you zoom wagh in,

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<v Speaker 2>you can always find little things, right. So we delivered

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<v Speaker 2>about two hundred and thirty seven million rides this last quarter.

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<v Speaker 2>That's a lot of rides, a lot of commuting rides,

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<v Speaker 2>a lot of rides to the airport and so forth. Now,

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<v Speaker 2>the quarter started off a little bit slow. There's some

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<v Speaker 2>really intense storms, particularly in New York City where you live.

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<v Speaker 2>As you know, that brought ride share and beg share

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<v Speaker 2>to sort of zero. So that was an early kind

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<v Speaker 2>of headwind. But look, Valentine's Day, Saint Patrick's Day, Super Bowl,

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<v Speaker 2>these were all all time highs, and then we had

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<v Speaker 2>our highest ride month ever in March. So I think

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<v Speaker 2>that there's a lot of reason to believe that there's

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<v Speaker 2>still a huge, huge amount of growth here. And then,

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<v Speaker 2>as you say, autonomous vehicles, that's a great product and

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<v Speaker 2>that's going to be one of the next big kind

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<v Speaker 2>of growth vectors up mart Mahine.

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<v Speaker 1>Over a Evercore really liking the fact that you've got,

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<v Speaker 1>you know, a record six straight quarter in terms of

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<v Speaker 1>active riders. But I think what he's liking to see

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<v Speaker 1>is maybe consumer incentives to just moderate a little bit.

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<v Speaker 1>Are you being able to do that.

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<v Speaker 2>David, Yeah, we are. We've gotten a lot of you know,

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<v Speaker 2>we think of it is a sort of leverage off

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<v Speaker 2>of consumer incentives. And I'll tell you a particular thing

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<v Speaker 2>that I'm starting to see more. I think it is

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<v Speaker 2>rewards maxing. Okay, so, oh no, you've got right there,

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<v Speaker 2>you go, there, you go. Be careful about where we're

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<v Speaker 2>going to go with this one. So anyway, no, but look,

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<v Speaker 2>we've got to deal with United right, which allows people

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<v Speaker 2>to both earn points and also spend points on left.

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<v Speaker 2>We have a deal with Hilton, we have an arrangement

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<v Speaker 2>with alask Airlines. We have an arrangement with door Dash

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<v Speaker 2>are super super important program there that just expanded to Canada.

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<v Speaker 2>And so what we're seeing people do is they're you know,

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<v Speaker 2>they're they're taking lift rides, they're earning points and they're

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<v Speaker 2>spending them elsewhere or they're even spending them back on

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<v Speaker 2>our platform. And Yeah, I think it's going to be

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<v Speaker 2>a thing, and I think it's one of the reasons

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<v Speaker 2>why we're saying high margins sort of like black and

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<v Speaker 2>luxury rides rise. Even with some consumer concerns, still this

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<v Speaker 2>rewards maxing thing, I think is working for people.

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<v Speaker 1>Rewards maxing, of course, is a play on all the

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<v Speaker 1>maxing that we have with looks maxing, all the tons

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<v Speaker 1>of phrase that gen Z use. Is it genders? I mean,

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<v Speaker 1>I mean how much you see how much you're seeing

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<v Speaker 1>the idea of different age groups responding to your new offerings,

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<v Speaker 1>because in many ways, I see the more premium offerings

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<v Speaker 1>coming to an older cohort, a more obviously a wealthier cohort,

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<v Speaker 1>in many ways a corporate cohort.

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<v Speaker 2>You know, I think that's something that's changing over time.

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<v Speaker 2>I think, you know, back when I was you know,

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<v Speaker 2>early in my career. You know, you didn't have an amex,

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<v Speaker 2>you know, platinum card or Chase Sapphire reserve card until

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<v Speaker 2>you're you know, old like me now. But no, it

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<v Speaker 2>turns out actually a lot of kids, a lot of

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<v Speaker 2>sort of gen y gen z folks, are early in

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<v Speaker 2>that ecosystem because they realize that there's a lot of

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<v Speaker 2>value to be unlocked if they kind of play the game.

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<v Speaker 2>And I think a lot of them think of it

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<v Speaker 2>a bit of as almost to play in the game,

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<v Speaker 2>Like I, how can I do this rewards maximum thing

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<v Speaker 2>to be able to afford a lift black even when

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<v Speaker 2>I'm in my twenties.

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<v Speaker 1>Savvy is what they are, and I'm interested, David, and

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<v Speaker 1>how savvy you are about the landscape for M and A?

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<v Speaker 1>Right now you've made acquisitions. This is where you've been

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<v Speaker 1>spending your money. Is there more to come?

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<v Speaker 2>You know, never say never about these things. It's always,

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<v Speaker 2>you know, a fool's game to predict M and A.

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<v Speaker 2>But I will say that it's it's a part of

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<v Speaker 2>our strategy. Now. We were not a very inquisitive company

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<v Speaker 2>for a long time, but now that we've got you know,

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<v Speaker 2>the fastest pickup times, great pricing, great service levels all around.

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<v Speaker 2>We're really thinking of bringing that abroad, and that's really

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<v Speaker 2>where our M and A focus has been is overseas.

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<v Speaker 1>Any warries about the consumer right now?

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<v Speaker 2>No, No, And I know that sounds glib. Of course,

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<v Speaker 2>people are feeling some pain. Our drivers feel a lot

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<v Speaker 2>of pain at the pump, and so that's why we

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<v Speaker 2>were the first to get out there with a nice

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<v Speaker 2>cash back program at the pump saves about a dollar

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<v Speaker 2>a gallon. So you the reasons, I think, of course,

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<v Speaker 2>are to be concerned. But when we look at the data,

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<v Speaker 2>you know, we're we're not seeing that play out.

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<v Speaker 1>It's been a week where I feel that you haven't

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<v Speaker 1>actually mentioned AI yet much. I mean, autonomous vehicles is

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<v Speaker 1>inherently AI. How much there were your workforce using it?

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<v Speaker 1>How much your workforce responding to having to use it?

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<v Speaker 1>And is there any stretch at which point you are

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<v Speaker 1>able to reduce your headcount or hiring on the back

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<v Speaker 1>of it.

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<v Speaker 2>You know, I love this question, and I think it's

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<v Speaker 2>really important for people to sort of get their arms

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<v Speaker 2>around this. Absolutely. Something like eighty six percent now of

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<v Speaker 2>our developers, our software engineers are using actively, like every

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<v Speaker 2>single day, using AI to write code for them. We're

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<v Speaker 2>also using it in customer care, We're using it all

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<v Speaker 2>over the place. But I think there's a way of

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<v Speaker 2>thinking about it which is not so much about cost reduction,

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<v Speaker 2>but about velocity increase and capacity building. You know, our

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<v Speaker 2>imaginations are huge, and we're a customer obsessed company, so

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<v Speaker 2>we have no shortage of great ideas to innovate on

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<v Speaker 2>behalf of customers. I think that's really where AI is

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<v Speaker 2>going to give us a big edge. Not so much

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<v Speaker 2>on this sort I mean cost. We can maybe save

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<v Speaker 2>a little bit money, but there's so much more value

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<v Speaker 2>if we can figure out new great ways for riders

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<v Speaker 2>and drivers to use our platform.

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<v Speaker 1>Is it a more competitive backdrop right now? To say

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<v Speaker 1>one more time, is it a more competitive backdrop right now?

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<v Speaker 2>Well, it is, you know, but only in the following sense.

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<v Speaker 2>You know. Remember there one hundred and sixty billion rides

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<v Speaker 2>that people take in their private car every single year,

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<v Speaker 2>and I think that's ultimately going to be the real

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<v Speaker 2>competition for us. Look, it's fifty thousand dollars to buy

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<v Speaker 2>a car eight hundred bucks a month plus insurance, plus gas,

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<v Speaker 2>plus maintenance, whereas Lyft is you know, twenty bucks a ride,

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<v Speaker 2>so in a funny way, I think the competition is

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<v Speaker 2>going to shift a little away from the other guys

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<v Speaker 2>and a little bit more towards what are good ways

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<v Speaker 2>for you to spend your money and how can you

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<v Speaker 2>live your best life? And rewards Max and rewards Max exactly.

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<v Speaker 2>I'm glad you picked up on that