Lyft Hires New CEO as Founders Step Back Amid Struggles With Competition

Mr. Risher has been a Lyft board member since 2021.

“The macroeconomy is tough and the world is full of some uncertainty and that’s a real factor for sure and, then, when you zoom in one click, the competitive environment is tough. We have a very aggressive—very aggressive—competitor,” Mr. Risher said in an interview with The Wall Street Journal.

“I think being a strong number two is a good place to be,” he added. “I like where we are, but we’ve got real work to do to fight it out a little bit.”

Lyft shares rose around 4% in after-hours trading Monday after the Journal reported the news. 

Lyft has struggled to keep up with its larger rival

Uber Technologies Inc.

UBER -0.42%

Uber now commands 74% of the U.S. ride-share market, up from 62% in early 2020, according to consumer receipts analyzed by market-research firm YipitData. Lyft’s market share has fallen to 26% from 38% over the same period, YipitData shows.

Uber, which has a global and more diversified business, leveraged its food-delivery operations to deal with a driver shortage that crippled the ride-share industry as the economy reopened in 2021. Lyft chose not to get into food delivery and operates within the U.S. and Canada.

Uber moved more quickly than Lyft to attract drivers with bonuses and some new features, many of which Lyft later implemented.

Lyft hasn’t reported an annual profit since its inception in 2012, but it has been trimming its losses. Last month, the company announced a weaker-than-expected revenue outlook for the current quarter.

Late last year, the San Francisco-based company laid off more than 700 employees or 13% of staff and scaled back on other businesses, such as renting cars to customers, as it looked to weather a possible recession. Its stock has tumbled over 74% in the past 12 months. Uber’s shares have fallen around 10% over that period.

Messrs. Zimmer and Green said in an interview that they were stepping down for personal reasons. Mr. Green, who has four children, said he approached the board about finding a successor after his 39th birthday late last year “prompted some reflections in terms of what I want in life.”

Mr. Risher said he was approached for the job earlier this year.

“This recent decision to pass the torch to David feels really good,” Mr. Zimmer said. “There’s always things we could have done differently or better.”

One of the decisions that Mr. Green said he would reconsider was limiting Lyft’s business to North America. Uber spent its early years expanding overseas, from where it now gets about 40% of its revenue. There is “still a lot of upside and a lot of room” for international expansion, Mr. Green said.

Mr. Risher wouldn’t say if he had plans to expand internationally.

Mr. Green controls more than 20% of shareholder voting rights at the company. His interest in transportation was sparked by a stint in Zimbabwe as a college student when he noticed how carpooling was a popular option among neighbors and thought that there must be a better way to utilize all the empty car seats in the U.S. 

Mr. Zimmer worked at Lehman Brothers before giving that up to move to San Francisco to help launch the company which became Lyft. He has special shares that give him around 12% of the voting rights for the company. Mr. Zimmer said Monday that he had ferried passengers as a Lyft driver on New Year’s Eve for more than a decade.

The new CEO, Mr. Risher, said he hopes to add to what the two have built. 

“My real opportunity is to take that foundation and take it to the next level,” Mr. Risher said. “A new person can help bring in even new energy. That’s job one right now.”

Write to Preetika Rana at [email protected], Lauren Thomas at [email protected] and Emily Glazer at [email protected]

Corrections & Amplifications
Lyft President John Zimmer celebrated his 39th birthday last year. An earlier version of this article said he celebrated his 40th birthday. (Corrected on March 27.)