Tag: sharing and on-demand economy

Lyft and Uber say they will leave Minneapolis if the mayor signs a minimum wage bill for drivers | CNN Business

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CNN
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Lyft and Uber threatened to stop doing business in Minneapolis after the city council adopted a new rule Thursday that would set a minimum wage for rideshare drivers.

In a 7-5 vote, the Minneapolis City Council passed an ordinance that includes a number of rideshare worker protections, including a minimum wage for Uber and Lyft drivers. Mayor Jacob Frey has the opportunity to veto the ordinance and has until next Wednesday, August 23, to do so.

The proposed ordinance mandates at least $1.40 per mile and $0.51 per minute within Minneapolis be paid to drivers. Minneapolis is debating the minimum wage as gig workers across the country are advocating for fair wages and job benefits. In recent years, states and cities have attempted to pass legislation regarding the growing “gig economy,” or freelance work through apps like Uber and Grubhub, but have generally met with fierce opposition.

On Tuesday, Lyft sent a letter to the council saying “Should this proposal become law, Lyft will be forced to cease operations in the City of Minneapolis on its effective date of January 1, 2024.”

Lyft, according to a statement sent to CNN Thursday, said the bill would be detrimental to drivers, who would ultimately earn less, “because prices could double and only the most wealthy could still afford a ride.”

The company said the bill had been “jammed through the Council” and urged Frey to veto the bill and instead allow time for the state’s rideshare task force to complete its research.

Uber sent an email to its drivers on Monday, urging them to contact the Mayor and City Council to ask them to oppose the move. Uber said its drivers sent over 700 emails on Thursday, but did not specify what was in those emails.

In its email, Uber said the legislation could “greatly limit” its ability to remove unsafe drivers from the platform and increase the cost of rides.

“If this bill were to pass, we would unfortunately have no choice but to greatly reduce service, and possibly shut down operations entirely,” Uber wrote.

In an email to City Council on Wednesday, Frey said he was concerned about the ordinance.

“This ordinance stands to significantly impact our city in terms of worker protections, public safety, disability rights, and transportation mode shift goals,” he said. After meeting with a broad group of stakeholders, Frey said “It is clear that we must allow more time for deliberation.”

After the ordinance passed on Thursday, Ally Peters, spokesperson for the Office of Mayor Frey told CNN via email, “As the mayor laid out in his letter to the City Council yesterday, he supports drivers being paid more.

In recent years, states have attempted to pass legislation regarding the growing “gig economy,” or freelance work through apps like Uber and Grubhub.

In 2020, California passed Prop. 22, backed by more than $200 million from the most influential gig economy companies. The controversial ballot measure allows the companies to treat drivers as independent contractors rather as employees. Though it was a major win for the likes of Uber and Lyft, it did include a minimum earnings guarantee (though it doesn’t include the time a driver spends waiting for a gig).

In June, New York City announced a new minimum pay-rate for app food delivery workers amid the rise in use of services like Uber Eats and DoorDash since the pandemic. Uber and other food delivery apps sued the city in July, maintaining that the law would hurt delivery workers more than help them.

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August 2, 2023
Lyft shares fall nearly 25% after forecasting revenue below estimates | CNN Business

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Reuters
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Lyft

(LYFT) on Thursday forecast current-quarter revenue below Wall Street estimates, blaming extremely cold weather in some of its major markets and lower prices, especially during peak hours, sending its shares down nearly 25% in extended trading.

The company’s outlook was in contrast to that of its larger rival Uber

(UBER), whose strong presence globally is helping it ride a boom in demand for ride-hailing services from travelers and office-goers

Lyft’s bigger presence on the U.S. West Coast, a region that analysts have said was trailing the rest of the United States in return to pre-COVID demand, could be hurting its recovery compared with Uber.

Company president John Zimmer said in an interview that the West Coast had “not fully” recovered but noted a “material improvement.”

Lyft forecast first-quarter revenue of about $975 million, which fell below analyst estimates of $1.09 billion, according to Refinitiv data.

Its forecast for first-quarter adjusted earnings before interest, taxes depreciation and amortization (EBITDA), a key measure of profitability that strips out some costs, was between $5 million and $15 million.

For the fourth quarter, Lyft reported an adjusted EBITDA of $126.7 million, excluding $375 million it had set aside for increasing insurance reserves. Analysts had forecast $91.01 million.

“We wanted to ensure we strengthened our insurance reserve … the purpose of doing that is to ensure we don’t have that type of volatility going forward, because we did such a large reserve on the high end of what we could expect given the size of our insurance book,” Zimmer said in an interview.

Active riders rose 8.7% increase to 20.36 million for the fourth quarter, Lyft said. Analysts were expecting 20.30 million, according to FactSet estimates.

Rideshare was “really back … we’re happy with the current marketplace conditions,” Zimmer said.

Revenue rose 21% to $1.18 billion, slightly above the average estimate of $1.16 billion.

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February 9, 2023
Federal agents interview veteran who alleges George Santos took thousands from dying dog’s GoFundMe | CNN Politics

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CNN
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Federal law enforcement officials are investigating a US Navy veteran’s allegation that Rep. George Santos raised money for a lifesaving surgery for his dying dog only to take off with the money.

Rich Osthoff, the veteran, told CNN he spoke to a pair of FBI agents on Wednesday about the incident on behalf of the US Attorney’s Office in the Eastern District of New York, which is investigating Santos’ finances. Osthoff said he cooperated with the agents’ requests, including handing over his text message exchanges with Santos.

CNN has reached Santos’ attorney for comment. Santos did not respond to questions about the matter when asked by reporters on Capitol Hill on Wednesday and a spokesperson for the US attorney’s office for the Eastern District of New York declined to comment.

Politico first reported the development.

Osthoff told CNN last month that in 2016 Santos promised to raise funds for his pit bull, Sapphire. Osthoff said at the time he was homeless and living in a tent after losing his job and house.

Santos set up a GoFundMe which eventually raised around $3,000. A post from the Facebook profile of George Devolder at the time links to a GoFundMe raising surgery funds for the dog.

Osthoff said Santos became uncooperative when he tried to access the GoFundMe money.

Santos, a New York Republican, told CNN in January that he had “no clue” what Osthoff was talking about and defended his work with animals.

Text messages provided to CNN by Osthoff also show his exchanges with Santos in 2016.

“Hey Anthony, Rich here. I was hoping to hear from you. Just checking whether you made contact with the vet,” Osthoff writes in one text to Santos, who was going by the name Anthony Devolder at the time.

Santos replies that he “just called” Osthoff and he’s been “jumping through hoops.” He adds, “They are not as flexible as you said they were,” apparently speaking about the vet Osthoff referenced.

Santos also writes that a vet “had already ruled out the surgery without the ultrasound because based on his experience he thinks it’s very invasive,” but he tells Osthoff he will take the dog to a vet to get an ultrasound “to give you piece of mind.”

After Osthoff says, “I’m starting to feel liked [SIC] I was mined for my family and friends donations,” Santos tells him that, because his dog is not a candidate for surgery, “the funds are moved to the next animal in need and we will make sure we use of [SIC] resources to keep her comfortable!”

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February 2, 2023
China to launch state-backed transport platform for ride-hailing, trucking | CNN Business

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Hong Kong
Reuters
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China will soon launch a state-backed platform for transport which includes services of ride-hailing, cargo trucking, road transport, railway, ferry and flight services, Chinese state media Beijing Daily reported on Wednesday.

The online platform, which has completed internal tests, is expected to integrate more than 90% of total capacity of the transportation market, the newspaper said.

China’s ride-hailing market was dominated by Didi Global which ran afoul of powerful regulator the Cyberspace Administration of China in 2021. The 18-month ban on the ride-hailer was lifted on Monday after the company took effective measures to ensure platform safety and data security.

The report did not give details of why the government was introducing the platform, whether customers would be obliged to use it or whether it would compete with existing platforms.

The report alluded to the disorderly expansion of ride-hailing apps and issues of data security.

The state-backed platform, called “Qiang Guo Jiao Tong” – or “Powerful Nation’s Transportation” – will offer people convenient services while maintaining data security and protecting personal privacy, Beijing Daily reported.

Other social media apps such as Wechat, Alipay and Douyin will be integrated into the platform, the report added.

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January 18, 2023
Woman sentenced to three years in state prison for collecting $400,000 in viral GoFundMe scam | CNN

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CNN
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A New Jersey woman has been sentenced to three years in state prison for her role in scamming more than $400,000 from GoFundMe donors, by claiming to be collecting money for a homeless man.

Katelyn McClure, 32, is currently serving a 12-month and one day term in a federal prison in Connecticut for her involvement in the scheme, the Burlington County Prosecutor announced in a news release Friday.

Her state sentence will run concurrently with her federal prison time, according to the prosecutor’s office. The judge also ruled McClure, who formerly worked at the state Department of Transportation, is “permanently barred from ever holding another position as a public employee,” the release said.

In 2017, McClure claimed she ran out of gas and was stranded on Interstate 95 in Philadelphia. The homeless man, Johnny Bobbitt Jr., supposedly saw her and gave her his last $20 for gas.

McClure and her then-boyfriend, Mark D’Amico, posted about the “good deed” on social media, including a picture of her with Bobbitt on a highway ramp. They also started a GoFundMe campaign to raise money for the homeless veteran, saying they wanted to pay it forward to the good Samaritan and get him off the streets.

The story went viral and made national headlines, with more than 14,000 donors contributing. The scammers netted around $367,000 after fees, according to court documents.

Prosecutors said the then-couple spent the money on a BMW, a New Year’s trip to Las Vegas, gambling in casinos, Louis Vuitton handbags, and other items.

Bobbitt, who received $75,000 from the fundraiser, according to prosecutors, took civil action against D’Amico and McClure and the scam soon became public.

An investigation revealed the real story. According to Burlington County Prosecutor Scott Coffina, the couple first met Bobbitt at an off-ramp near a casino at least a month before the GoFundMe campaign went live. Investigators reviewed texts the couple sent discussing the scam and their money troubles, including one McClure sent to a friend which read, “Okay so wait the gas part is completely made up, but the guy isn’t. I had to make something up to make people feel bad.”

D’Amico and Bobbitt were charged in 2018 alongside her for concocting the scheme, prosecutors said.

McClure pleaded guilty to one count of theft by deception in the second degree in 2019, according to the Burlington County prosecutor.

Bobbitt pleaded guilty to conspiracy to commit theft by deception in 2019 and was sentenced to a five-year special probation period which includes drug treatment. D’Amico also pleaded guilty and agreed to a five-year term in New Jersey state prison, as well as restitution of GoFundMe and the donors, in 2019.

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January 8, 2023
IRS delays rule change for people who get paid on Venmo, Etsy, Airbnb and other apps | CNN Business

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CNN
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Anyone getting paid for their goods and services through apps like Venmo, PayPal or CashApp, or platforms like Etsy and Airbnb, just got a reprieve from the IRS.

Following concerns expressed by the tax community, the electronic transactions industry and some lawmakers, the IRS said Friday it would delay by one year the implementation of a rule change that would have resulted in a virtual paper chase of tax forms going out by January 31, 2023, to anyone using such apps for their business transactions.

The rule change requires third-party payment platforms to issue a 1099-K to the IRS and the app user for business transaction payments if they add up to more than $600 over the course of the year. A business transaction that is taxable is defined as a payment for a good or service, including tips.

It used to be those platforms only had to issue you a 1099-K if you engaged in more than 200 business transactions for which you received total payments of more than $20,000 in a year.

“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”

Indeed, the increase in 1099-Ks issued early next year for people’s 2022 tax returns was expected to be, in a word, “ginormous,” according to Wendy Walker, who chairs the information reporting subgroup on the Internal Revenue Service Advisory Council.

Walker works as a solution principal for Sovos, which helps more than 30,000 business clients with tax compliance, including the issuance of all types of 1099s, of which there are at least 16 different varieties.

Some businesses that only had to issue a couple thousand 1099-Ks under the prior rules were looking at a couple hundred thousand, she noted. “Our clients … have reported enormous increases in their potential filing obligations as result of the threshold change,” Walker said.

Meanwhile, those receiving 1099-Ks for the first time will have to figure out what portion of the amount reported on the form is actually taxable versus what portion represents payments that may be deductible business expenses, such as a fee paid to the payment platform or a credit issued to the business, Walker said.

“People are just not going to understand how to take that gross amount and then work off the deductions to get to their taxable amount.”

The move was welcomed by those representing third-party payment platforms.

“Given the potential confusion the reporting requirement would cause, we applaud the delay, ” said Scott Talbott, spokesman for the Electronic Transactions Association. “The $600 reporting requirement is not worth the problems it would cause. ETA will keep working to increase the threshold to a realistic amount.”

How does ETA define realistic? A threshold that falls between $10,000 and $20,000, Talbott said. “ETA supports a reporting threshold that ties into regular businesses and not consumers occasionally selling a handbag or a bike online.”

The new rule doesn’t impose any additional taxes on anyone. Nor does it change your obligation as a taxpayer to always report to the IRS all of your taxable income from your business activities.

But the 1099-K reporting will make it harder for someone to evade the taxes they owe by underreporting their business income.

The rule also does not apply to personal transactions you conduct on an electronic payment platform. For example, if a friend sends you money through Venmo to help pay for a dinner out or your mother sends you some spending money.

Lastly, the 1099-K reporting rule does not apply to any transactions made through Zelle. That’s because Zelle is a payments clearinghouse that connects the payer’s bank account directly to the receiver’s bank account. “Zelle facilitates messaging between financial institutions, but does not hold accounts or handle settlement of funds,” the company said in a statement earlier this year.

But the IRS may still get reporting on at least some of your business transactions on Zelle, Walker said.

If there is a business-to-business payment over the Zelle network, the business that makes the payment must provide the receiving business and the IRS with either a 1099-NEC for non-employee compensation or a 1099-MISC for other expenses, she explained.

Like the 1099-K, those other forms also provide information to the IRS that will make it harder for businesses to understate their income in a tax year.

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December 28, 2022
Airbnb finds people have more trouble booking stays if hosts think they are Black | CNN Business

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CNN
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Airbnb on Tuesday said it has found a “meaningful difference” in the booking success rate for users who are perceived to be White compared to those who are perceived to be Black. The findings come after the company launched an initiative to uncover and remedy race-based discrimination on its platform.

While all users successfully had their reservations confirmed by hosts more than 90% of the time in 2021, Airbnb said it found a notable gap in user experiences during that time depending on their apparent racial identity. Users who were perceived to be White had a booking success rate of 94.1% while users who were thought to be Black had a success rate of 91.4%, according to the company. (Those perceived as Asian and Latino/Hispanic had booking success rates sitting in between.)

“It is a meaningful difference, and it’s unacceptable,”Janaye Ingram, Airbnb’s director of community partner programs and engagement, told CNN. “It is something that we obviously are not okay with and we are doing a lot to address.”

The findings are part of Project Lighthouse, an effort launched by Airbnb in 2020 to collect data on racial discrepancies on its service. The project was developed in partnership with Color of Change, the nation’s largest online racial justice organization, and with the support of other national privacy and civil rights organizations like the NAACP and Asian Americans Advancing Justice.

Airbnb’s efforts to address racial disparity on its platform come after the company repeatedly faced scrutiny on the issue. A 2015 study from Harvard found that Airbnb hosts were less likely to rent to guests with names that sounded African American. The next year, Airbnb was hit with a lawsuit accusing it of discriminatory housing practices. (A federal judge later blocked the suit.) And in 2019, the company settled a lawsuit from several Black women in Oregon alleging customers were discriminated against based on their race.

The company said Tuesday that information collected through the Project Lighthouse initiative is being used to inform the company’s approach to bookings and reviews in an effort to minimize racial discrimination for prospective guests.

“You can’t fix what you don’t measure,” Ingram said.

Airbnb has taken a number of steps in recent years to address concerns about racial disparities on its platform, including getting rid of guests’ profile pictures prior to booking, making more people eligible for the “Instant Book” feature that bypasses host approval, auditing booking rejections and making it easier for all guests to receive reviews, according to the company.

On Tuesday, Airbnb said Project Lighthouse revealed another potential issue in need of tweaking: guests with more reviews have higher booking success rates than those without, and guests perceived to be White or Asian have more reviews than others. In response, Airbnb plans to make it easier for all guests to receive a review when they travel, an effort that it hopes will have a large impact on the Black and Latino or Hispanic communities.

The findings released on Tuesday come after Airbnb conducted two racial audits in 2016 and 2019.

“Racial audits work, as long as corporations make the changes necessary to address what they expose,” said Rashad Robinson, president of Color Of Change. “Six years after Airbnb’s first racial audit, and two years after Color Of Change negotiated Project Lighthouse, Airbnb is now a leading example of what it looks like to back up the rhetoric of racial justice with the policy, practice and personnel that can prevent rampant racial discrimination.”

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December 13, 2022
Uber launching self-driving cars in Las Vegas | CNN Business

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CNN Business
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Ridehailing giant Uber is now offering Las Vegas riders the option on its app to hail a self-driving taxis developed by another company, according to a press release Wednesday. While the autonomous vehicles are currently only available for ride hailing in Las Vegas, there are plans to expand to Los Angeles “at a later date,” according to the release.

The robocars, made by driverless technology company Motional, are sent with two “vehicle operators” behind the wheel to monitor the technology and provide added support to riders. Uber said it plans on launching a fully driverless service with Motional in 2023.

Users requesting a ride will be offered an autonomous vehicle if one is available before the trip is confirmed. If a customer opts in, a self-driing Hyundai Ioniq 5 mid-sized hatchback, modified by Motional, will be sent to pick them up.

Motional has been offering robotaxi services in Las Vegas since 2018 through Uber rival Lyft, though rides before 2020 were offered under parent-company Aptiv.

Uber and Motional first announced their non-exclusive 10-year agreement in October, two years after the ride-hailing company sold off its own self-driving unit, Advanced Technologies Group, to San Francisco-based startup Aurora. The sale came after a a five-year run of developing self-driving vehicles that was marred by litigation and a fatal crash.

Waymo, Google’s self-driving company, sued Uber in February 2017 alleging trade secret and intellectual property theft, with Waymo eventually receiving about $245 million in Uber stock as part of settlement and Uber agreeing not to use proprietary information from Waymo. The ridehailing company suffered another blow to its self-driving program a month later when one of its test vehicles in Tempe, Arizona, struck and killed a pedestrian. An Uber test driver behind the wheel, who was supposed to monitor the vehicle and intervene if needed, was watching a television show on her phone.

Through its partnership with Motional, Uber is attempting to shift its business model away from being solely reliant on its vast fleet of independently contracted drivers, a business model that has posed legal issues for the company in recent years. The Biden administration is currently proposing a new labor rule that could classify millions of these gig workers as employees — a move that would challenge the low-cost labor models behind Silicon Valley heavyweights like Uber.

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December 9, 2022
Airbnb CEO on the tech downturn: ‘It’s like we’re all in a nightclub and the lights just came on’ | CNN Business

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After years of seemingly unstoppable growth, the tech industry is now facing the “ultimate reality check” as it confronts broader economic uncertainty and waves of layoffs, Airbnb CEO Brian Chesky told CNN on Thursday.

“It’s like we’re all in a nightclub and the lights just came on,” Chesky said in an interview on “CNN This Morning.” After a period of “exuberance and euphoria,” he added, “now we all have to, like, take a hard look at things.”

His remarks come at a difficult moment for the tech industry. Facebook-parent Meta said last week it was cutting 11,000 jobs after nearly doubling its staff during the pandemic. Amazon confirmed this week that lay offs had begun in its corporate workforce, with reports saying it plans to cut 10,000 positions. And Twitter recently cut approximately 50% of its staff as new owner Elon Musk races to bolster its bottom line.

Airbnb may be an exception. Chesky said the company is not undergoing layoffs at this time, and in fact is hiring. But that is due in large part to the company cutting 25% of its staff at the start of the pandemic as the travel industry was clobbered, and losing more employees by attrition after.

“Two-and-a-half years ago, we lost 80% of our business in eight weeks,” Chesky said. “People were predicting we were going to go out of business.”

“We just hunkered down,” he added. “We rebuilt the company from the ground up, and we stayed really lean.” Now, Chesky said, “we’re stepping on the gas, we’re not putting on the brakes.”

While the reckoning hitting much of Silicon Valley is painful, Chesky appeared to suggest that a more sober reassessment of the industry could also provide an opportunity for the tech sector to rethink its place in society, after years of criticism for the impact its products can have on people.

“I think Silicon Valley has done so many amazing things for the world, but we have to be careful having a fetishization of new technology, as if the new technology is going to solve all the problems that the last technology created,” Chesky said. “We need more diversity in Silicon Valley, but that diversity should not just be demographic diversity. We need artists, humanists in this industry.”

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November 19, 2022
Lyft to lay off 13% of staff | CNN Business

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CNN Business
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Lyft on Thursday said it will lay off 13% of its staff, or nearly 700 employees, as it rethinks staffing amid rising inflation and fears of a looming recession.

In a memo to staffers on Thursday, a copy of which was shared with CNN Business, Lyft

(LYFT) co-founders Logan Green and John Zimmer said the layoffs will impact every part of the company, and pointed to broader macroeconomic challenges that led to the cuts.

“We know today will be hard,” the founders wrote in the memo. “We’re facing a probable recession sometime in the next year and rideshare insurance costs are going up.”

“We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives,” the memo said. “Still, Lyft has to become leaner, which requires us to part with incredible team members.”

For much of the pandemic, the tech industry only seemed to grow bigger as consumers shifted more of their lives online. But a number of tech companies reported slowing growth in the September quarter, as customers and advertisers rethink spending. Many in the tech sector are now rethinking their investments and staffing needs.

Amazon on Thursday said it planned to implement a pause on corporate hiring for months, citing the economic climate. Also on Thursday, Stripe, a payment processing company and one of the world’s most valuable startups, announced it is laying off 14% of staffers.

“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” Stripe CEO Patrick Collison wrote in a note to employees.

Lyft’s move, however, comes as its chief rival, Uber, bucked the trend by reporting strong revenue growth, fueled by demand for rides and meal deliveries. Lyft is set to report earnings results on Monday.

“We are not immune to the realities of inflation and a slowing economy,” Lyft’s founders wrote in the memo to staffers.

In a company filing on Thursday, Lyft confirmed the plans involving the “termination of approximately 683 employees” and said it will incur approximately $27 million to $32 million of “restructuring and related charges” due to severance and benefits costs.

Shares for Lyft are down nearly 70% so far this year.

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November 3, 2022
Lyft announces new CEO, says co-founders will step aside from management positions | CNN Business

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CNN
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Lyft announced on Monday that Amazon veteran David Risher will join as chief executive next month, and that co-founders Logan Green and John Zimmer will step down from their management positions at the ride-hailing company.

Green, who is currently the CEO, will be succeeded by Risher effective April 17, the company said in a statement. Zimmer, Lyft’s president, will also step down from his role as of June 30, the company said. Both Green and Zimmer will stay on at Lyft in non-executive roles as chair and vice chair of the Lyft board, respectively. No replacement for Zimmer was named.

The leadership shakeup at the ride-hailing company comes as it has struggled to turn a profit over the years and after its stock has taken a beating in recent months, shedding more than 13% so far in 2023. Late last year the company said it was cutting 13% of its staff, or 700 employees, as part of a major effort to cut costs. Lyft’s stock rose about 4% in after-hours trading Monday on the news.

Lyft

(LYFT) emphasized Risher’s management experience at Amazon

(AMZN) and Microsoft

(MSFT), though he has not worked at either in two decades according to his LinkedIn profile. He was the 37th employee of Amazon

(AMZN), and went on to become the e-commerce giant’s first head of product and head of US retail, according to a statement from Lyft

(LYFT).

Risher has been a member of the Lyft board since July 2021, and has spent the past 13 years working at a nonprofit he co-founded aimed at getting children to read more.

“I am honored to step into the CEO role at such an important moment in the company’s history, and am prepared to take this business to new levels of success,” Risher said in a statement.

Green added in a separate statement that building the company over the past 16 years has “been the adventure of a lifetime.”

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April 12, 2021
How Uber left Lyft in the dust | CNN Business

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CNN
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For years, Lyft positioned itself as the “nice guy” in the ride-hailing industry. It let rival Uber do most of the dirty work fighting regulators and the taxi industry to create a path for a new crop of companies to offer rides to customers through an app.

In the process, Lyft cultivated a feel-good brand – but Uber dominated the market. For a brief moment in 2017, however, it looked like the balance of power might shift, as Uber was rocked by a seemingly endless series of PR crises that culminated with its founder and CEO Travis Kalanick stepping down.

Six years later, however, Lyft’s position is arguably more precarious than it has ever been. Uber now has 74% of the US rideshare market, up from 62% in 2020, according to market research firm YipitData, while Lyft’s market share slipped to 26% from 38% during that same period. Meanwhile, Lyft stock has plunged nearly 90% since it went public in 2019.

In a nod to those challenges, Lyft announced Monday that its two cofounders, Logan Green and John Zimmer, would step back from their management roles and the company would bring in Amazon veteran and Lyft board member David Risher to take the helm of Lyft as CEO.

In its announcement, Lyft framed the leadership change as a straightforward succession plan. “All founders eventually find the right moment to step back and the right leaders to take their company forward,” Green said in a statement. “As a member of the board, he knows both the challenges and opportunities ahead.”

For Lyft, the current challenges are immense. While Uber diversified its business beyond ride-hailing by delivering meals and grocery items, Lyft never did. That arguably hurt the company earlier in the pandemic when fewer customers were traveling but more were ordering items online. Late last year, Lyft said it was cutting 13% of its staff, or 700 employees, as part of a major effort to cut costs.

At the same time, Lyft now faces an Uber that is run by a seasoned executive, Expedia veteran Dara Khosrowshahi, who immediately got to work straightening up the company’s business and image. Under Khosrowshahi, Uber doubled down on growing its meal delivery business, while working to cut costs elsewhere, including by selling off more experimental efforts like its self-driving car unit.

In its most recent earnings report last month, Uber said that it had its “strongest quarter ever,” reporting a 49% year-over-year increase in revenue. Lyft’s latest earnings report, meanwhile, was unusually disappointing for Wall Street.

One tech analyst, Dan Ives of Wedbush Securities, said Lyft’s conference call to discuss the results “was a Top 3 worst call we have ever heard” as its “management is trying to play darts blindfolded.” He slammed the earnings outlook offered on the call as a “debacle for the ages.”

With Risher as the new CEO, Lyft is clearly hoping for a turnaround. Risher was the 37th employee of Amazon – a company that has long been the model for the on-demand industry – and he went on to become the e-commerce giant’s first head of product and head of US retail. In its statement announcing Risher as the new CEO, Lyft pointed to his legacy at Amazon: “In tribute to Mr. Risher’s contributions, Jeff Bezos added a permanent thank-you to the Amazon website, where it can still be seen  today.”

Tom White, a senior research analyst at D.A. Davidson, wrote in a note this week that the new CEO “could signal an increased willingness to broaden the strategic aperture at  LYFT a bit as it relates to areas like product strategy (delivery), partnerships, or other novel ways to create value.”

Nicholas Cauley, an analyst at research firm Third Bridge, wrote that Lyft “still has many levers it can pull to regain market share.” He added: “There are still improvements to be made and a leadership change is a positive catalyst for turning the ship around.”

But in an interview with CNN’s Julia Chatterley on Wednesday, Risher seemed to dash hopes that Lyft would borrow from Uber’s playbook and branch into other delivery categories.

Risher told CNN he wants to make sure Lyft focuses on providing a great ride-hailing service and “not get distracted by delivering pizzas or packages or all sorts of other things that other companies are doing.”

“I don’t really want to get in the same car that, you know, just delivered the tuna sandwich,” he added. “And if you talk to drivers, they say, ‘Gosh, I don’t make as much in food delivery and it’s more frustrating. I get tickets when I’m double parked in front of the restaurant and so forth.’ So, you know, I think that, that Uber has its challenges too. I really do.”

Risher also said “it’s not our focus” to pursue a sale of the company.

While the market initially seemed to welcome Risher’s appointment, the slight uptick in Lyft stock after the news came out was quickly wiped out a day later once Risher started talking about his plans for the company.

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April 12, 2021
Lyft stock plunges nearly 15% on weaker than expected revenue forecast | CNN Business

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CNN
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Lyft may have a bumpy road ahead to recovery.

The ride-hailing company reported revenue of $1 billion for the quarter ending in March, marking a 14% year-over-year increase and beating Wall Street estimate’s. But the company forecast weaker-than-expected revenue for the current quarter, which was enough to jitter investors.

Shares of Lyft plunged nearly 15% in after-hours trading Thursday following the earnings results.

The latest earnings report comes on the heels of Lyft shaking up its the C-suite and announcing plans to cut 26% of its employees as it fights for market share and profitability.

David Risher, who previously worked at Amazon and Microsoft, recently took over as CEO of Lyft and the company’s two co-founders stepped down from their management positions at the company. Risher has been a member of the Lyft board since 2021.

On a conference call with analysts on Thursday to discuss the results, Risher said Lyft is currently at “an inflection point” as people return to pre-pandemic social habits.

“I am very aware of our current levels of growth and profitability are not acceptable,” Risher said on the call, his first as CEO. “I am committed to growing Lyft into a large, durable, profitable business, that our riders, drivers and shareholders love, and I look forward to keeping you informed on our progress.”

Compared to its chief rival Uber, Lyft has so far struggled to bounce back from the pandemic’s hit to its business. While Uber diversified its business beyond ride-hailing by delivering meals and grocery items during the health crises, Lyft never did. Uber also was able to attract drivers back to the platform better than Lyft as pandemic restrictions eased in the U.S.

Earlier this week, Uber said in its quarterly earnings report that revenue was up 29%, as demand for its rideshare and delivery services held firm despite lingering recession fears.

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April 12, 2021
How Lyft’s new CEO is ‘copying’ his former boss Jeff Bezos to turn around the company | CNN Business

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CNN
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David Risher had a rocky first week at his job.

Days after taking over as the new CEO of Lyft

(LYFT) last month, Risher announced plans to “significantly reduce” the company’s workforce and stressed that the decision was his. The next week, Lyft

(LYFT) revealed the extent of the layoffs: 26% of the staff, or more than 1,000 employees, would lose their jobs.

“It was a very, very tough decision and a tough, you know, set of days and weeks to go through, of course,” Risher told CNN in an interview Thursday. “Nobody likes it.”

“But,” he added, “It’s also really important for us to be a strong player.”

Lyft hasn’t seemed like such a strong player of late. The company has shed 90% of its market value since going public in 2019. It has lagged behind its chief rival, Uber

(UBER), in recovering from the pandemic shock to business. And Lyft has gone through multiple rounds of layoffs and management changes, including Risher taking over as CEO last month and the company’s two co-founders stepping back.

Now, Lyft’s new chief executive says he hopes to draw on the lessons from Amazon

(AMZN), where he worked very early on, and from his former boss Jeff Bezos in his efforts to turn the rideshare company around.

“We’re going to focus on customers,” Risher said, alluding to Amazon’s guiding principle. “That’s a fundamental, just truth of business – if you can create a business that, really, your customers love, you can do amazing things for the world.”

Many tech companies like to compare themselves to Amazon, but if anyone has the credibility to say it, Lyft is probably hoping it’s Risher. Risher was Amazon’s 37th employee, and his contributions are memorialized on the site with a thank-you note from Bezos, which can still be seen today more than two decades after Risher left the company.

In its first product update since Risher took the helm at Lyft, the rideshare company on Thursday unveiled new features aimed at taking some of the pain points out of the summer travel season. With the update, customers can preorder their Lyft rides from the airport the moment their plane touches the ground; Lyft then handles the rest of the logistics to ensure a driver is waiting for the customer as they exit the airport.

The airport preorder option rolled out at Los Angeles International Airport and Chicago’s O’Hare and Midway airports on Thursday, with plans to expand to other airports in the near future.

“You can outsource a lot of that stress to us, that’s what we want to do. And that really is Jeff Bezos,” Risher told CNN. “I’m just copying his strategy that worked pretty well for Amazon. I think it can work pretty well for Lyft and our customers.”

But as Risher works to revive Lyft’s fortunes, he faces a rival, Uber, that has shown renewed strength in recent quarters. (Uber has also added features to make airport pickups less painful.)

When asked what went wrong for Lyft, Risher told CNN, “I think the pandemic went wrong with Lyft.” But the pandemic did not impact Lyft and Uber the same.

Under the leadership of Expedia veteran Dara Khosrowshahi, who took over after founder Travis Kalanick resigned following a long list of PR crises, Uber doubled down on diversifying its business with meal deliveries. That service has helped carry it through the pandemic and bounce back quicker as the economy reopened.

But in a previous interview with CNN, Risher seemed to dash hopes that Lyft would borrow from Uber’s playbook and branch into other delivery categories.

Risher told CNN’s Julia Chatterley he wants to make sure Lyft focuses on providing a great ride-hailing service and “not get distracted by delivering pizzas or packages or all sorts of other things that other companies are doing.”

For now, Risher and Lyft are focusing on the all-important summer travel season.

Another update unveiled Thursday helps customers get out the door to the airport at the best time by syncing their flight info from their smartphone calendar into their Lyft app to get reminders about booking airport rides. Risher told reporters Thursday that the basic idea for this arose because he and his wife could never agree on the best time to leave for the airport.

“Our focus right now as summer travel begins is really de-stressing the airport experience in particular,” Risher told CNN.

Risher demurred when asked if Lyft would be an independent company a year from now, after many industry-watchers initially thought news of his appointment was aimed at positioning the company for a sale.

“It’s not our focus to be part of somebody else’s company,” Risher said.

Uber may be outpacing Lyft today, but Risher believes customers are best served by having both companies around.

“My view is every single person who’s a rider should have both apps on their phone, I really believe that, because sometimes you want a choice,” he added, “but then we want you to choose Lyft, and the reason we want you to choose Lyft is because we think we can provide a better experience.”

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April 12, 2021
One of Asia’s top female entrepreneurs is stepping down at Grab, the ride-hailing company she helped found | CNN Business

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Hong Kong
CNN
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One of Southeast Asia’s most well-known female entrepreneurs is to step down from her operational roles at Grab, the ride-hailing giant she helped found more than a decade ago.

Tan Hooi Ling, a former chief operating officer who currently leads the firm’s technology and corporate strategy teams, will move to an advisory role by the end of the year, the company said Thursday. She will also give up her seat on the board.

Her exit leaves Grab’s Chief Executive Officer Anthony Tan the tough task of reversing years of losses amid increasingly fierce competition in the ride-hailing and food delivery markets, all without the help of the woman who helped him co-found the company in 2012.

“Grab has been one of the most fulfilling experiences of my life. The impact we create is a reflection of who we are as a team, and I am humbled to have been able to walk alongside Anthony and the many amazing Grabbers who share the same values and work ethic to build something that improves lives in Southeast Asia,” a statement from the company quoted Tan Hooi Ling as saying.

After being founded as a ride-hailing company by the two Tans – who are both from Malaysia but are unrelated – Grab quickly soared to become Southeast Asia’s most valuable private company. It acquired Uber’s Southeast Asia business in 2018, and has since expanded into a variety of other services, including food delivery, digital payments and even financial services.

But Grab has faced intensifying competition from Southeast Asia rivals, including Singapore’s Sea Ltd, Indonesia’s GoTo Group, and Berlin-based Delivery Hero’s Foodpanda.

Grab, which unlike some of its competitors avoided mass layoffs during the coronavirus pandemic, posted an annual loss of $1.74 billion in 2022. That was a 51% improvement on the year before, according to its annual report.

In 2021, the company merged with a special-purpose acquisition company, or SPAC, backed by Altimeter Capital in a deal that would pave the way for a New York listing and value Grab at nearly $40 billion.

Before that, Grab had heavyweight backers including Japan’s SoftBank

(SFTBF) and China’s ride-hailing startup, Didi Chuxing.

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April 12, 2021