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Lyft Co-Founders to Resign; David Risher Is Named CEO

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As the Transportation Network Service company battles to compete with larger opponent Uber, Lyft Inc. announced on Monday that its founding members Logan Green & John Zimmer would resign as CEO & president, respectively. Instead, council member David Risher will assume those positions.

Prior to joining the board of Lyft in 2021, Risher, a former executive at both Microsoft and Amazon, oversaw the non-profit Worldreader for more than ten years.

David Risher
Image Source: neowin.net

A dismal quarterly prediction increased worries that price reductions made to compete with larger rival Uber, which has a stronger price advantage, a global footprint, and a delivery service for food, will compress earnings. This led to a change of leadership at Lyft.

Also Read: Twitch CEO Emmett Shear to step down

David Risher stated service for riders as well as drivers would be their main focus and also, the cost of rides.

“One of the first things we’re very focused on is making sure we are matching Uber on price,” Risher said in an interview.

Expanding the business to food and grocery delivery was not an open option because of what it could do to the rider or the driver experience, he added.

Source: finance.yahoo.com

Over three-quarters of Lyft’s worth was wiped out in 2022, and stocks are dropped approximately 13 percent this year. Uber is now up 24 percent.

During Monday’s after-market trade, Lyft stock increased by nearly 3 percent.

Even with its operations ceasing during the epidemic, the firm, which was created in 2012 and became public in 2019, is still waiting to record an annual profit but it has reduced liabilities over the years.

“Lyft needed to do something … to begin rebuilding investor trust,” Gordon Haskett analyst Robert Mollins said. “We believe today’s announcement means a sale is unlikely – at least in the near-term – as David will likely be given a fair amount of time to improve (or at least attempt to) the company’s competitive and financial position.”

Source: finance.yahoo.com

Also Read: YouTube CEO Susan Wojcicki steps down after nine years

As the leader of the nonprofit Worldreader, Risher worked to promote children’s reading habits by facilitating the delivery of around 75 million ebooks to 21 million kids.

On April 17, Risher will take over as CEO of Lyft. According to the business, he will receive a $3.25 million transfer fee in addition to a $725,000 yearly wage.

Green, who arrived in the Bay Area at the age of 23 and took a job on Lyft in a 125-square-foot cubicle, will assist as the company’s chairman and Zimmer will be the vice chairman.

Lyft

Lyft: Making Car-pools Comfortable and Profitable

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Due to growing environmental concerns, more and more people are shifting to carpooling and ride-share options. Companies such as Uber and Ola have profited from this shift in perspective. There’s another company that joined this cab-share bubble, much before it was a viable investment option. Headquartered in California, Lyft is a ride-share company that operates in over 644 cities in the US. The Lyft mobile app has become a sensation, offering rides, car-pool options, and even food delivery services. Here’s a look at their climb to success and fame.

How the System Works

Lyft has the second-largest market share in the United States, following Uber closely controlling 28% of the market as per the Second Measure. Users download and install the Lyft app on their mobile devices. They then register on the system, sign-up with their mobile number, and verify a payment system. The app supports payment via cards, Apple Pay, Google Pay, and even PayPal.

They can then book their rides, and once the trip is complete, their account is debited. The app provides information such as driver name and photograph to ensure safety. Both drivers and passengers have the option to add their personal information such as hometown and music preferences. Users also have the option to pay their drivers tips as they seem fit.

About the Founders of Lyft

Logan Green grew up in California, graduating with a BA in Business Economics from the University of California. The inspiration for founding Zimride came from having spent most of his life stuck in traffic, as per Green. He started the company as a means to solve the state’s transportation faults and shortcomings. Due to the limitations of public transportation, he requested Zipper to work from UCSB but they couldn’t due to the shortage of vehicles. So, Green acquired some cars and began a car-sharing program that had over 2,000 participants. This idea later took shape and became Zimride in 2007.

Logan Green
Image Source: Google Images

John Zimmer grew up in Connecticut, graduating in Hotel Administration from Cornell University at the top of his class. He then worked as an analyst for Lehman Brothers in New York. He met Green via Facebook while at Lehman Brothers, opting to quit his job to focus on their company. Green and Zimmer later moved to Silicon Valley and shared an apartment to grow the company, without taking salaries for three years.

Launch and Early Beginnings of Lyft

Computer programmers John Zimmer and Logan Green founded Lyft in 2012 as a subsidiary of Zimride. The latter worked as a long-distance carpooling company founded by the duo in 2007. The idea for Zimride came to Green on one of his frequent travels from the University of California to Los Angeles to visit his girlfriend. He initially used Craigslist’s ride boards but faced anxiety as he knew neither the passenger nor the driver.

Facebook launching its API to developers served as Green’s motivation to set up such a company. Soon enough, Zimride grew to become US’s largest carpool company. Green met John Zimmer on Facebook via a mutual friend. The company’s name came from Zimbabwe, wherein Green saw locals sharing a minivan during his trip there in 2005. Zimride launched at Cornell University, and six months later, 20% of the company had hopped on. In 2013, the company legally changed its name to Lyft, and in July of the same year, Lyft sold Zimride to Enterprise Holdings.

Growth of Lyft

While Zimride focused on colleges, Lyft served as a company enabling shorter trips within cities. The large pink mustaches on the front of cars became a symbol for Lyft. In 2014, it launched in 24 US cities, overnight, bringing its overall total to 60 cities. The same year, Lyft hired lobbying agents to handle the resistance they had faced since launching.

By mid-2014, Lyft launched its shared-taxi plan to enable cheaper rides to customers. By the end of next year, Lyft became the only company allowed to pick passengers up from the airport at Los Angeles. In 2017, Lyft completed its 160 millionth ride and launched in another 100 cities, bringing its total to 200 cities.

By the end of 2017, Lyft expanded its services to several Canadian cities such as Ontario, Toronto, and Ottawa. The following year, they partnered with All scripts to facilitate rides for patients, serving over 2,500 hospitals and 7 million patients. They acquired a bicycle-sharing company Motivates in late 2018.

The company went public in 2018, the first ride-sharing company to do so at a valuation of $24.3 billion, raising $2.34 billion. Also, by 2019, the company successfully completed over 5000 rides via self-driving cars in Las Vegas and has since grown tremendously, providing over a million rides a day.

Uber IPO

Uber Suffers a slow Growth and a $5.2 Billion Loss as it Closed Q2 2019

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Uber just had its IPO, and it does not seem that the company is earning the expected profits. The company on Thursday revealed its second quarterly earnings after the IPO and has reported a loss of worth $5.2 billion. Though the earned revenue for the second quarter earned is $3.17 billion, it is still less than the expected revenues, i.e. $3.36 billion.

The price of Uber’s every share had gone down to $42.98 per share from its IPO price, i.e. $45, and the company closed the quarter at 9%. The reported net loss is the biggest loss that the company has ever gone through.

Recently Lyft also came out with its revenue for the Q2 2019 and also reported a loss of $644 million. Being smaller in size, this loss for the company is equally also huge. If we took out the various expenses, like Uber mentioned, “stock-based compensation expenses for employees”, the two are still at loss, as Uber has lost around a $1.3 billion, which is 30% more than last year. And, the total loss for Lyft is around $197 million.

Uber IPO
Image Source: pymnts.com

Uber has just earned a 14% growth up from its last year’s growth, whereas, Lyft has reported a 72% more growth compared to its last year’s growth, i.e. an $867 million.

“While we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we made good progress in that direction,” said the Uber chief financial officer Nelson Chai.

Uber CEO Dara Khosrowshahi also made a similar statement and said, “We’re very confident that this company, at maturity, can be cash-flow positive.” Dara also said while talking to reporters, “We think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down. I think our break-even is something that we can push the company to break even if we really wanted to frankly.”

But is the company really experiencing any growth? In recent years, the pace of growth for the company has quite slowed down. Also, it had fired over 400 employees during the IPO as well. There have been more losses than profits in the entire journey of Uber, and it makes its position questionable in front of the investors.

Drivers Planning a Strike Against Uber and Lyft on Wednesday to Get Better Wages and Job Security

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Uber is prepping up to go Public on Friday, i.e. on 10th May, but there is something else that the Uber drivers are planning for. There has been a lot of fuss about the forthcoming IPO for both cab-riding services, Uber and Lyft, and finally, when both are about to go public, the New York Taxi Workers Association is calling on U.S.-based drivers to come in front and participate in a two hours strike on Wednesday.

Almost three days ago, a group of drivers from the UK had also announced that they will be having a 9 hours long boycott of the app on Wednesday over the wages. And now, the NYTWA is also encouraging the Uber drivers to join in the protest for two hours, on Wednesday between 7 a.m. and 9 a.m.

The protest is against the two ride-hailing services, and the agenda is to get a better basic wage as well as job security for the Uber drivers. Currently, the Uber drivers are getting a $17 hourly wage, which they want to increase to a better offer. The main motive of the protestors is to coincide with the Uber’s IPO so that the companies take notice of their issue.

“In the IPO filing, Uber said drivers will only get more dissatisfied because they plan to cut our pay and stop incentives. We don’t want our wages to stay just a minimum. We want Uber to answer to us, not to investors. The gig economy is all about exploiting workers by taking away our rights. It has to stop. Uber is the worst actor in the gig economy.” NYTWA member Sonam Lama said in a press release.

Along with New York, the drivers in other cities also are looking forward to the protest. In San Francisco, the drivers have planned to shut off the app for 12 hours and will be protesting at the Uber’s HQ.

On the entire matter, an Uber spokesperson said, “Drivers are at the heart of our service, we can’t succeed without them and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road. Whether it’s more consistent earnings, stronger insurance protections or fully funded four-year degrees for drivers or their families, we’ll continue working to improve the experience for and with drivers.”

On the other hand, the drivers are claiming that the two companies are working on its PR and is always showing off on how well these two companies treat their drivers. But it is not at all true.

With upcoming IPO Uber is seeking a valuation of $84 billion and with this, the drivers and the other employees of the company are also looking forward to getting a hike in their basic wages.

Uber, Lyft Rewarding the Drivers with Cash Bonuses to Invest in Shares in Their Respective IPOs

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According to a new report from The Wall Street Journal, the cab-renting service Uber and Lyft are planning to allocate some cash bonuses to their drives so that they can invest in the company’s shares through the upcoming IPO of those companies.

uber-lyft
Image Source: howtogeek.com

There has been a lot of discussions about the role of a driver in a transport company and most of the times those drivers are not recognised as the full-time employees of that company. Also, under the rules of the Securities and Exchange Commission (SEC), those companies are not allowed to grant those drives a share of the stocks, directly, in the company.

Although many times several laws have been trying to put those drivers into the full-time employee category, companies like Uber and Lyft regards the drivers as individual contractors. Now the two companies are planning to offer those drivers who have been a part of their team for a longer time with rewards, such that they would be able to buy a share of the stakes in the IPO of those companies, before shares to begin trading on public stock exchanges.

According to the reports, Lyft will be granting the drivers, who have completed 10,000 rides, with $1,000 and the driver who have completed over 20,000 rides will get $10,000. It will be the choice of the drivers if they want to keep the money or put the money towards IPO-priced shares.

On the other hand, there is no hint from Uber over the amount of reward money. Although there has been no confirmation from Lyft as well, and the money value can be changed depending upon the situation.

Uber had been talking about offering a part of the shares of the company to its drivers since 2016, and last year, in May, the Uber CEO Dara Khosrowshahi also announced that the company was planning to provide extra benefits and rewards to its drivers. Uber has also started free tuition fee and insurance programs for the drivers working for the company.

Noticeably, both Lyft and Uber are ready to debut on the Nasdaq for their IPOs. It is expected that Lyft between $20 billion and $25 billion in its IPO, and Uber may reach $120 billion in the IPO. Lyft and Uber will be putting hundreds of millions of dollars toward the reward program for its drivers so that they would be able to invest during their IPOs.

Logan Green & John Zimmer; The Nice Guys of Ride-sharing

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“Follow your instinct,” you might have heard it several times from the mouths of the most successful entrepreneur across the world, but how many times it happened that you really did? Logan Green and John Zimmer, two young tech professionals, are among the ones, who went along with their gut feeling of starting an unusual business of sharing a car with strangers for the money. In the beginning, they were warned by many, that the business has higher chances of failing. But after almost ten years, the two are operating the same business, backed by biggest venture capitalists and making revenue in billions every coming year.

Logan Green was a native of California, where he attended the New Roads High School in Santa Monica. He received a bachelor’s degree in Business Economics from the University of California, Santa Barbara. At the college, he founded The Green Initiative Fund and was the youngest director for the Santa Barbara Metropolitan Transit District.

As a child, Green used to ride with his parents in their car, and whenever he saw outside the car, he found more cars, with most of the times, only a single person riding it. The time he had to join the college, he left his car back at home, to try the other conventional means of transportation. At the same time, his girlfriend Eva was also transferred to a college in Los Angeles.

lyftfounders
Image source: riverfronttimes.com

In the time of three years of her college, Green continued to visit Eva on every weekend riding different transportations. He even asked Zipcar, a car-sharing program, to implant their cars at UCSB, but could not convince them. Finally, he himself bought four cars and started the car-sharing program at the campus. Under the program, the users could unlock cars with radio-frequency identification.

On the other hand, Greenwich, Connecticut brought up John Zimmer, was also interested in the car-sharing concept. Zimmer, a graduate from Cornell University School of Hotel Administration, was influenced with the fact that he could fill the empty seats of his car while going back to home in the college breaks but had no idea from where to begin. After graduating from college, Zimmer started working as an analyst in real estate finance at Lehman Brothers in New York City, keeping a journal about carpooling ideas, side-by-side.

After completing the college education, Green went on a trip to Zimbabwe, where he was introduced to the crowdsourced carpool networks. The idea led him to build a platform named Zimride, using the Facebook API, upon which users could find and plan carpools.

Eventually, at the same time, he was introduced to Zimmer on Facebook via a common friend. Zimmer came to know about Zimride, and both coincided on the same idea of the development of a carsharing platform. As the two shared the similar interest, it took no time for Green to fly to New York and meet Zimmer.

In late 2006, together Green and Zimmer launched the first version of Zimride in the Cornell University and later, in 2007, in the UCSB campuses. Over 20 per cent of students registered for the service, but still, they used it only a few times in a year. During the very time, Uber was also providing its car-renting service, but the service included the rental of brand new luxury cars. The idea of Zimmer and Green was way too different from that.

Green and Zimmer moved to Silicon Valley, to work on the growth of the company and shared an apartment that served as both apartment and office. After working hard on Zimride for five years, they expanded the company to thousands of users and over 50 universities.

The main mission, the two were working towards, was to provide an alternative to car ownership. In 2013, they sold Zimride to Enterprise Holdings and turned there focus towards Lyft, their newly founded company, providing carpooling in local areas.

The next thing they figured out was that having an app for the smartphones can get them more users as well as more frequent rides for localities. So, they hired two engineers to develop an app for Lyft, and within three weeks the app was ready.

In 2017, Green and Zimmer raised $4.1 billion dollars for Lyft, valuing the company at $11.5 billion. Currently, Lyft is providing its services in 50 United States and has grown to 1,000 employees.

In 2009, Zimmer and Logan Green were named finalists in Business Week’s list of America’s Best Young Entrepreneurs and in 2014, the two were named “35 Under 35 list of Inc. Magazine.