The founders of the ride-hailing app Lyft said they were stepping down from their positions as president and chief executive, and into nonexecutive roles, as the company has lagged amid steep competition from longtime rival Uber.
The company named David Risher, a former Amazon executive, as its next chief executive. Risher has been on Lyft’s board of directors since July 2021, and his ascension to the top role comes after a “thorough search process conducted by the Lyft board with the assistance of a leading executive search firm,” the company said in a release.
Lyft has faltered in recent months, especially in comparison with market leader Uber. Lyft shares sank in February when its revenue forecast fell short of analysts’ expectations. The company had said it was lowering prices to compete as the market rebounded from the depths of the pandemic. Zimmer told Reuters in February it was cutting prices and decreasing the amount of peak hours — times of high demand when prices surge — because the market was so strong Lyft could afford to do so.
Like Uber, Lyft has struggled to recruit drivers after the market for ride hailing fell sharply during the pandemic. Lyft said last year it was increasing incentives for drivers; the news sent shares falling by nearly 30 percent.
Lyft — once known for the pink mustaches pinned on drivers’ cars to make them easily identifiable when the idea of getting into a stranger’s vehicle still made some uneasy — has long been the underdog in the U.S. ride-booking market. In recent years, Uber has expanded its reach across the world and emphasized food delivery as another revenue source. Lyft has instead focused squarely on transportation, including short-term scooter and bicycle rentals.
During the early days of Uber, when the company gained a cutthroat reputation, Lyft positioned itself as a friendly, mustachioed alternative. Uber has struggled to improve its image after a series of allegations about sexual misconduct by drivers and perceived political missteps.
But Lyft has had its fair share of allegations, too. Nearly a dozen women told The Washington Post in 2019 that the company’s responses to complaints of sexual harassment were inadequate.
Risher, the incoming CEO, said in a letter to the Lyft staff that he wants “Lyft to lead,” adding that the company will “focus on making sure our riders and drivers have an incredible experience every time they interact with us, so they use us again and again to get out into the world.”
Lyft shares rose 4 percent in after-hours trading on the news of the shake-up but closed 87 percent lower on Monday than on its initial public offering in 2019.