How I Built Resilience: John Zimmer of Lyft

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dot com And thanks. Hey everyone and welcome to How I Built This Resilience Edition. On these episodes, we're talking with entrepreneurs and other business leaders about how they're coping during this very challenging time. And today we're gonna hear from John Zimmer, the co founder of the Ride Hailing app. Lift.

We first spoke with John back in two thousand seventeen, but now, fast forward a few years, And like most of us, John is dealing with challenges he never anticipated. But when we spoke a few days ago, He sounded pretty optimistic. Personally I'm doing okay. I think uh you know, the business has had Uh tough time, uh, but has seen some really strong recovery.

Uh since the bottom. Uh we were down about seventy five percent. At the peak. Um in terms of ride chair rides. We we've now returned to uh a little under half down.

Uh which is actually good progress. You know, we've always been a very long term minded company. We've had hard times before. We've always been the challenger brand, and so actually I think moments like this are opportunities for us and our team to shine. And so happy to share some of that with you today. Yeah, I wanna I wanna talk about that. I mean let's let's first talk about like kinda drill down into some of the challenges first. Um

there's no question that this has to be the most challenging time in your you know in your leadership of lift. It's I think it's the most challenging time for any business leader or founder around the world today for a variety of reasons. Um And as you mentioned it's been a tough year for Lift. You had to have some layoffs in May, I think about a thousand Layoffs um which could not have been easy for you to go through. So

As you began to see the pandemic having a a significant impact on on your business. What kinds of conversations d w were you having with your your leadership team with your co founder Logan about ways to kind of begin to to build resilience. One of the conversations that we've had or one of the

The challenges throughout uh is how many different audiences groups of people that we're working to take care of throughout this. Right. So we have our drivers We have our riders.

We have our employees. uh within employees there's uh those that are working in person uh to help drivers at operation centers And there are those that could work from home. So all different populations that we want to take care of.

uh investors as well. who who are judging those decisions we make. So I think that's been a really interesting conversation. Also the conversations around short term thinking versus long term thinking. There are short term decisions we need to make in order to preserve the long term mission that we have as a company. Uh and those have been really key decisions. You talked about the layoff. That was very, very difficult.

It forced us to make hard decisions, some of which I think actually uh in hindsight were very healthy for the business. But very difficult to make, especially for people that are all in this tough time where where where the job market is difficult, uh those are not easy decisions. Let's talk about some of the short term

decisions that you had to take. I mean you are a publicly traded company. Um so you're obviously accountable to investors and it's everything's uh on the table. You have to First of all, just to keep the business Operating.

and to get you through this time'cause this is going to be a a challenging year. And there may be a recovery next year for you. We'll talk about that in a moment, but you knew this was going to be a tough year. So was one of those decisions to retain as much cash On hand. Um was that one of the Initial decisions that that you guys had to take?

Yeah, obviously so we we we look at the cash that we have on hand We also raised uh our first debt. To add cushion. Well, we're actually in quite uh a strong position. We're lucky that we went public when we did. and have you know near nearly three billion dollars in the bank.

What we did To start is we ran all different scenarios. We said okay, if we were seventy five percent down. For six months or two quarters. you know, what would the situation be like for cash if we were down

You know, for four quarters, what would it be like for cash? We ran, you know, the the worst case scenarios, the medium case scenarios. In the best case scenarios And then made the decision that, you know, raising the debt was kind of an A no regrets move.

But then also to your point, preserving the cash that we do have on hand. uh making decisions about expenses that we had in the office that were more of a luxury. making decisions around certain teams uh that we needed to uh tighten up, for example, on the on the operating side.

Uh there were some markets where we had to close some of our centers. What are you finding out from users? Like why What is what is it that is preventing them from using lift? Is it basically that they just don't have anywhere to go or is it Is it the fear of being in a car with somebody else? It's a mix of both. You know, first I think it's people changing their transportation behavior, their actual transportation behavior, and then secondarily Uh it's obviously the the questions around health safety and it and I'd love to walk through what we're doing on on that end. As you open the app.

uh we ask both driver and rider to confirm that they're wearing a mask. Uh, we asked Driver and Rider confirmed that they haven't been in contact with anyone. that has covet And we ask everyone to keep their areas clean and open windows if possible. So that's gone a long way. I mean if you if you zoom out, actually the fact that Half as many rides are being taken now.

As before. I'm actually quite happy with in a strange way because I know many people that are They're not going into the office.

So that's a huge change in transportation. So the fact that one out of two rides are still present even in this environment. shows some flexibility in the model because we've seen different types of rides. We've seen a lot of essential workers using this way more because There are other options, potentially public transportation.

Are things that they're more concerned about from a health safety perspective. And so we've seen those rides increase. I mean one of the things that you you did before the pandemic was to diversify. I mean lift um invested in bike share programs and in in in the scooter programs in in certain urban areas around the country. given that the rideshare part of your business is still the core part of your business what are conversations you're having internally about creating uh other revenue streams in the future to, you know, if ride chair doesn't recover as quickly expect, or if You know, if ride chair is is a completely different thing in the future, what what other kind of places are you looking to diversify?

Yeah, so I mean the the good news is transportation uh is fundamental and is something that through the recovery is going to be important and people will need. So one on on bikes You know, we own the system City Bike in New York City. Bay Wheels in the Bay, Divvy in Chicago.

And you can access them through lift. And uh for City Bike in New York. I believe it was last weekend we hit our record of over over a hundred thousand rides in one day. And so we're actually seeing faster recovery.

And and not as deep. down side on on those modes, which has been really helpful. The other area we've looked at is delivery. So we have no intention to be Another kind of food delivery consumer app. We will not do that.

But there's a lot of small and local businesses that are having to pay thirty percent twenty percent of their revenue to be on those platforms. And so we think there's a huge opportunity to help those small and local businesses have their own kind of capabilities. and provide more jobs for drivers. So we're experimenting with that.

Uh we started that with with essential deliveries. Uh we've uh worked with partners to deliver millions of meals for people in need during this time. Uh so I think that's another really Interesting opportunity. On the driver's side. I want to ask you about an initiative.

That you recently put out. I think it's called Resilient Streets, where you asked urban planners to sketch out plans for what cities will look like with fewer cars. Um basically uh uh you know, city streets are are designed for more bikes and E scooters and e bikes and so on. Um I mean it's interesting because you know, your business model depends on cars and and ride shares. So walk me through the thinking behind this and how would that affect your business model in the future.

Yeah, so if you zoom out and you think about our our mission, improve people's lives with the world's best transportation. From the beginning we looked at the fact that Americans spend nine thousand dollars every year oning and operating car. That they use four percent of the time. They spend more money on their car than they do on food, than they do on health care.

The only thing they spend more money on Then their car is their house, and to us. That doesn't make any sense. So we want to create a whole new way for people to access transportation. Because We think

By doing that, we can allow cities to be built around people instead of car ownership, right? We have so much parking everywhere. Studies show. When you build more streets, you get more traffic. And so Especially in a moment like now.

when you can rethink everything or that you're forced to rethink everything. Thinking about street design is is critical. You know, we have uh the bikes as I mentioned across the country. There would be a lot more people using bikes if there was safe bike infrastructure.

There would be a lot more people walking and enjoying local commerce in cities. if uh it was always safe for pedestrians and and there was easy access. uh throughout the city. There is going to be transportation in cars in vehicles. uh that will always be important.

But the infrastructure needed, uh, whether that's parking or the number of streets that we have. Or the lack of safe Streets for bikes. Uh and pedestrians needs to change. So I mean, could you imagine a future where the bulk of your business comes from people using bicycles and e scooters and other modes of transport? I think in like a very urban core.

I mean, Manhattan is a great example. I forget the average speed uh of a car in Manhattan. Yeah, it's like it's like seven miles an hour or something. It's single digits, it's not very impressive. So in urban cores micro mobility or bikes and scooters. uh as those vehicles get better and better and safer and safer and as the street infrastructure adapts to make the environment safer.

Absolutely it can be the best way, the fastest way, the cleanest way. And the most enjoyable way to get around your city. Well one other if it's okay, one other uh mode that we've been uh really excited to launch uh or to grow even in this environment has been a rental service that we created. Uh so car rentals. As we get people out of car ownership, there are use cases if you go away on a weekend on a you know two hour drive and you don't own a car, having easy access to a car rental is important. So with lift rentals

uh you get a lift to the car rental location That we operate. And then you can just grab the keys and go, there's no counter, it's really fast and Easy in in Covid we launched a kind of contactless experience to get the car. Uh we also announced A partnership with Sixt

which is a European car rental operator, such that we brought that technology and that access through our app Uh to their vehicles as well. Um, this is a question from Kyle Ashcraft from Facebook. Kyle asks, What do you see as a future for subscription based ride sharing? I know we talked about that at the how I built this summit, which was you had a vision for in the future, you know, people will have subscriptions for bikes and for e scooters and for lift rides. What What's the status of that? Yeah, I love that question. Uh we have a program called uh Lift Pink.

Which is our subscription service. And so you you pay a monthly fee. To get a fifteen percent discount on all Ride your rides. uh as well as access to bikes and scooters.

Uh, we're even testing unlimited access to bikes and scooters. So this is live. Uh you know, we're we're gonna be testing, you know, upgrades. on your car rental. So by having all these different consumer transportation options, Lift Pink can become your transportation wallet. can become the most affordable way to access transportation.

When we come back in just a moment, I'll ask John about one of the biggest debates in the world of ride hailing. Whether drivers should be thought of as independent contractors. or employees. Stay with us. I'm Guy Raz and you're listening to How I Built This Resilience Edition. From NPR.

Hey, welcome back to How I Built This Resilience Edition, and I'm speaking with John Zimmer of Lift. And you may have seen the company in the news this summer because it's been lobbying hard for a California ballot initiative called Proposition Twenty Two. And I'm oversimplifying here, but basically if it passes, It will overturn a state law that would require companies like Uber and Lyft to to treat their drivers as W-2 employees, not contractors. But as you can imagine, the issue is pretty heated.

A lot of people have Are are angry on all sides of this. Um there are drivers who support the initiative, drivers who oppose an initiative, consumers who support it and oppose it. So first of all, can you explain From your perspective, why would it be so hard to treat?

Your drivers like part time employees. Well, I think first it's starting with the fact that many of our drivers already have full time work. The majority, something like eighty percent of our drivers. Maybe in California it's eighty six percent of drivers Drive less than twenty hours a week. This is something someone does maybe five hours a week, ten hours a week. Yes, of course there's people that are doing it 40 hours a week. But the far majority are doing it. Less and I think it's important to zoom out.

And and have the nuanced part of the conversation, which is what do we want to accomplish? What is the right thing to do here? The right thing to do is to get benefits. for drivers depending on how much they work. But if you're gonna drive for five hours For three months. to save money for a wedding or for a medical expense. the the way we're being f you know forced into employment would would make that not tenable.

And so what we're saying is, okay, so let's look at this new form of work. Let's not ignore that these drivers deserve benefits, but let's have the benefits scale with the amount of work that we do. Uh, and so prop twenty two is that middle ground we're saying here's a better solution. That provides health care. Uh for drivers driving, you know, fifteen hours or greater.

So just to clarify, I mean your position is we don't oppose providing benefits to people who drive for lift, but we want to be able to scale those. So if you drive more. we wanna be able to offer those benefits, but you're essentially saying you don't want the state to Legislate and regulate. And force you to do this? No, I mean

We're not, you know, the type of company that says Uh that is against regulations. We think regulations make a lot of sense. We think labor projections make a lot of sense. I think the labor movement in this country has been critical uh for workers in America. And I think we have a new form of work.

that five years ago I went to our general counsel and said How can we get benefits to drivers that are driving uh more on the platform. And she said well you'd have to classify everyone as an employee And then eighty to ninety percent of drivers likely wouldn't uh be able to drive on the platform. And so we've been trying to find a portable benefit type structure for a while.

Four to one driver support prop twenty two. uh versus the alternative. Uh, and so we've heard their voices and we've incorporated that into prop twenty two. When you go to Sacramento. Um when you make this argument to legislators You know, what is it that you're not able to convince them of? The politics.

Honestly, so I've not only spoken to Legislators and politicians, I've talked to labor leaders. Listened And provided this viewpoint. uh listen to drivers

Listen to all these constituents and The majority, if not all, agree to a certain extent. The challenge is is political. We're living in a time Where nuanced opinions and non extreme opinions. are harder to to legislate, are harder to get through.

And so there's like a political survival aspect. And so we have to Be part of creating the political conditions by having drivers have a voice, demonstrating that drivers four to one want this. Vers the alternative demonstrating the true consequences. of eighty percent of people at least articulating them and hoping not to demonstrate them in practice.

But I think the the challenges have been it's been hypothetical because it hasn't been real. Нбиз полікал конверсація. Favor kind of. Extreme opposing views. versus kind of nuanced

I mean I wonder if we're kind of in a moment where You know, people are sort of fed up with this idea of trusting businesses, right? I mean, in in a sense, what you're saying is, hey, you know, we operate in good faith. We can be trusted to operate as a responsible employer and as a responsible business because the market is going to judge us. Users won't use us if we're not doing that. And that makes sense, but at the same time You know, we're at a moment now where people

Have heard that message in the past and haven't seen it, right? They haven't seen a realist. Uh I don't think people trust businesses, and I don't think that's crazy. I'm not saying trust us. I'm saying let's legislate a solution. That works well for drivers, works well for riders, works well for the business. Works well for labor.

You know, the same thing happened in the early days of lift when Seven, eight years ago it was wild to get into someone else's car. It was absolutely something that people said would not happen. And we started doing background checks, we started doing driving record checks before there was a rule to do it. And I did used to have that philosophy of oh well

Look, we're We're doing it. Uh, you know, trust us. But then I I I learned quickly and I and I went to the regulator and I said You know, w we received a cease and desist and I said, Look, like here's what we're doing, but don't take my word for it. regulate this and that led to the state law in California uh now known as like the TNC category.

And that got brought across the country. So I I agree with you. I think people are fed up listening to not only businesses but leaders Saying trust me. Uh and um that's not what I'm saying. I'm saying listen to the drivers and let's create a new regulation. Alright, let's get to some more questions about Lyft. This is from Daniel Cramer. Daniel asks, Are you gonna start to focus more on autonomous vehicles? In in part because of COVID? Does that change that equation for you at all? We have been working on autonomous vehicles. We have a program called Level Five. We have a great team and we're making great progress. We also have

uh kind of a partnership model called Open Network, where we've partnered with Waymo and others. uh to bring those vehicles to to Lyft Riders. We actually have some of those uh in Arizona. So this hasn't changed. That I mean I think of course the ability to create you know health safety through autonomous is definitely quite interesting and and through designing the vehicle, but it's it's still a technology limitation.

uh and a cost limitation at this point. And so those haven't changed materially during this time. Um here's a question from William Curtis. Um says he's a part time lift driver. He wants to know when Lift will require all riders to upload a photo of themselves for drivers to see. Ah, I love that question. Every year at least once I drive on the platform And uh I was driving and I do it on New Year's and I was doing it

uh this past New Year's and had the same thing happen where a a writer uh came with without a photo and then a writer came with a photo and it was such a more delightful and uh obviously you know safe feeling experience when you had the photo and right after that, which is the reason I I drive and I will try to do it more frequently. Uh, right after that had a conversation with the team about uh improving the rate of photos uploaded. We don't want it to be a blocker

In the sense that we don't want to get less rides, which would be less income earning opportunities for you and the and the company. But we have increased the percent of riders that are posting a photo and we're working on more features to kind of uh encourage that uh while they're in their ride to simply take a selfie and things like that. So I agree and and uh

Expect more from us on that. J just for c clarification here, when you When you actually are a lift driver yourself, when you're out there and it says John And I'm assuming you're in your Toyota Highlander. By the way, do you just upgraded to a minivan? Uh Honda Odyssey. All right, so if you see a John driving a Honda

Odyssey. You know that it's gonna be the co founder of Lift who's driving you around. Um and then you can you can ask as many questions you want. Um you know a lot of people ask Whether now is a good time to start a business.

I mean, you started what would become lift during the last financial crisis in two thousand eight with Logan, your co founder, who you met on Facebook. Do you think that economic downturns to start businesses? I think so for for two reasons. One Depending on the individual. Your risk profile might be, you know.

the job market might not be as good. And so there may be less risk. to taking that risk and starting your own thing. But maybe even more importantly, things are changing. The world is changing. Business is changing.

People's preferences and needs are changing. And those are all opportunities. And so I I think now is a great time uh to be an entrepreneur. John, you talk about Logan, your co founder and w I think we're super close friend of yours as being very kind of um

deliberate and m methodical and you're kind of slightly more emotional. and which is a great balance to have. And you mean you you talked about how you're the you were the one who was like kinda freaking out when things weren't quite going right and I mean now you know you're a big public company, you're valued at billions of dollars and Despite obviously the huge challenges you have this year.

Um, are you able to kind of manage stress better or or actually are do you still have sleepless nights? Do you still have anxiety, even Even now. Still have lots of anxiety, but much better, I guess, with the the few years and the kind of experiences we've had with Lyft. To manage that for me physical exercise Helps a lot. It helps me get out out of my head.

spending time with my daughters. I have a a four year old and a and a one year old And that is incredibly grounding. They say something funny to me. You know, I I have to change a diaper or whatever. It is incredibly grounding. And and frankly

Brings joy. to a tough day to kinda spend time with them. So that's been helpful as well. Last question for you. When we when we spoke at the summit, the I built the summit in twenty eighteen, I asked you, um you you mentioned how you and you and Logan often ask yourselves, if we were starting over today Uh what will we do differently? Now that we are here in this very challenging moment.

If you were starting over today, what would you do differently? Oh man, using my question against me, it's good. Um I think if we were starting over today I might start with

Pink, which we talked about as the subscription. as a as a way to get people to interact with lift. uh to say hey There's a membership service, it's gonna be more affordable than owning a car. And we're gonna go to battle for you.

to build the best transportation experience to give you access to bikes. Cars, car rental. So I'd probably maybe start from pink. Uh and work work backwards. Nice.

John Zimmer. Co founder, president of Lyft, thank you so much. Thank you. That's an excerpt from my conversation with John Zimmer. To see our full interview, you can go to Facebook.com slash how I built this, and if you want to see all of our past live interviews, You can find them there or at youth.com/slash NPR. And if you want to find out more about the Resilient series or other virtual NPR events, you can go to nprpresents.org.

This episode was produced by Candace Lynn with help from Will Mitchell, Matt Adams, L. Mannion, Gianna Cappadona, John Isabella, Julia Carney, Neva Grant, and Jeff Rogers. Thanks for listening, stay safe, and I'll see you back here in a few days. I'm Guy Raz and you've been listening to how I built this.

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