Latest news with #DavidRisher
CNBC
3 days ago
- Automotive
- CNBC
Lyft is starting to make some right moves with urging from activist Engine Capital. What's next
Lyft (LYFT) is a multimodal transportation network in the United States and Canada. It offers access to a variety of transportation options through its platform and mobile-based applications. The Lyft Platform provides a marketplace where drivers can be matched with riders via the Lyft App, where it operates as a transportation network company. Transportation options through its platform and mobile-based applications are substantially comprised of its ridesharing marketplace that connects drivers and riders in cities across the United States and in certain cities in Canada, Lyft's network of bikes and scooters, and the Express Drive program, where drivers can enter into short-term rental agreements with its subsidiary, Flexdrive Services, LLC or a third party for vehicles that may be used to provide ridesharing services on the Lyft Platform. It makes the ridesharing marketplace available to organizations through Lyft Business offerings, such as the Concierge and Lyft Pass programs. Stock Market Value: $6.86 billion ($16.26 per share) Percentage Ownership: 0.81% Average Cost: N/A Activist Commentary: Engine Capital is an experienced activist investor led by Managing Partner Arnaud Ajdler, former partner and senior managing director at Crescendo Partners. Engine's history is to send letters and/or nominate directors but settle rather quickly. On March 25, Engine announced a position in Lyft and stated that they are calling for a strategic review, improved capital allocations and the elimination of the company's dual-class share structure. On April 16, Engine nominated two directors for election to the Board at the 2025 annual meeting, but ultimately withdrew those nominations following productive engagement with the company that led to several capital allocation initiatives, including the company committing to significant share repurchases in the coming quarters. Since David Risher took control as CEO of Lyft in 2023, Lyft has made some major improvements, streamlining operations, enhancing platform functionality, and expanding market presence. These have led to notable material enhancements in the company's operational and financial performance. From 2023 to 2024, revenue increased by 31.39%, EBITDA went from a negative$359.1 million to $27.3 million and free cash flow (FCF) increased from negative $248.06 million to $766.27 million, the latter two of which are in the green for the first time since its IPO. Despite these improvements, Lyft's share price decreased by 30% over the same period. There are a few factors that may help explain the company's current undervaluation. First is the industry's dynamics as Lyft operates in a duopoly with Uber in the rideshare market. In the US, Uber holds approximately 75% percent of the market while Lyft holds 24% with the rest controlled by niche areas (i.e. Curb, Alto, and Waymo). The company is in an inherently difficult strategic position due to Uber's dominance — while Lyft is only in the US and Canada, Uber is diversified across most global markets and has expanded into other synergetic areas like food and alcohol delivery. This makes Lyft particularly vulnerable to Uber's decisions regarding pricing and promotions, as management noted during the company's most recent earnings call. The market has sensed this situation, with Lyft's shares underperforming compared to Uber by 37%, 287%, and 210% over the past 1-, 3- and 5-year periods, respectively. Second to this is Lyft's suboptimal capital allocation practices. The company has experienced excessive share dilution. Since 2019, Lyft's shares outstanding have almost doubled. Currently, dilution is primarily caused by the company's stock-based compensation (SBC) practices, which are currently around $330 million annually, 4.9% of Lyft's market cap. Enter Engine, who is calling for a strategic review, improved capital allocation practices and the elimination of the company's dual-class share structure. These proposals are all worth evaluating. First, there are a few reasons why a strategic review, specifically a potential strategic acquisition, makes sense. As has been already discussed, one of, if not the largest challenge Lyft faces is their inability to scale and diversify at the pace of Uber. As the rideshare industry continues to grow and evolve, this will only become increasingly important to Lyft's potential long-term success. It seems like the most effective way to overcome this is to be either sold to or merged with a larger strategic entity that can give Lyft the scale and diversification it needs to compete with Uber. Large players in the food delivery or automotive industry make sense as potential acquirers. For example, Doordash, with a roughly $80 billion market cap, could easily afford Lyft, has synergies to better optimize both platforms, a global presence, and would create more revenue stream options for drivers. On the other hand, automative companies testing the rideshare autonomous vehicle industry like Google (Waymo) and Amazon (Zoox), which is potentially the next technological evolution in the rideshare space, also make sense as acquirers. Given Lyft's depressed valuation (EV to 2026 consensus EBITDA multiple of approximately 6.6x), recent growth, and large number of potential synergies, a large takeout premium is certainly possible here. Secondly, the company clearly needs to improve its capital allocation practices. While Lyft recently announced a $500 million buyback program, this is not even sufficient to counter the dilution over the next two years due to current SBC practices. With $2 billion of cash (approximately $700 million of net cash) and the company dramatically increasing their FCF, it appears that Lyft has the ability to much more aggressively repurchase shares to do more than just counter SBC dilution. Lastly, as a corporate governance investor, Engine will propose eliminating the dual-class structure. Originally set up to give control to the founders, this structure now seems unnecessary since co-founders John Zimmer and Logan Green are no longer involved in day-to-day operations. These preferred shares carry 20 votes per share, which give them 30.8% of the total voting power while owning only approximately 2.3% of outstanding shares. Eliminating the dual-class share structure makes complete sense, is the right thing to do and would be supported by the vast majority of shareholders. However, there is virtually no way that Zimmer and Green will voluntarily give up this control position. As an experienced activist investor Ajdler knows that, but also as an experienced activist investor, he has to try. But at the very least, the Company can refine the board to reflect the changes over the past six years since its IPO – seven of the ten current directors have no public company experience other than Lyft - the Board has a lean towards directors with experience in startup companies or early-stage investments. While this background may have once been valuable, that is not where Lyft is as a Company anymore. A refreshment of these directors for people with public market, capital allocation and capital markets expertise, would better position the Company for what it is today. After launching a proxy fight for two board seats, this campaign came to a head when Engine withdrew their director nominations on May 8. This withdrawal came following the company's public announcement to increase its share repurchase authorization to $750 million and commit to utilize $200 million of such authorization over the next three months and $500 million within the next 12 months.
Yahoo
5 days ago
- Business
- Yahoo
Tesla (TSLA) Robotaxi Rollout Sparks Uber, Lyft Sell-Off Frenzy
May 29 - Tesla (NASDAQ:TSLA) plans to start operating a fleet of 10 to 20 full self-driving Model Y vehicles on Austin's public streets in mid-June, following on-road tests this week without a driver or onboard engineer. Shares of Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) declined in Thursday's trading, reflecting investors' caution as competition heats up. Warning! GuruFocus has detected 4 Warning Signs with NVDA. Uber has been building its own autonomous network through partnerships with Google's Waymo (NASDAQ:GOOG) in Austin and Atlanta, Pony AI (NASDAQ:PONY), Momenta and May Mobility, which is set to launch on the Uber platform in Arlington, Texas, by year-end. A separate agreement with WeRide (NASDAQ:WRD) aims to roll out driverless vehicles across 17 U.S. cities over the next five years. Lyft is also deepening its self-driving ambitions via ties with Mobileye (NASDAQ:MBLY), Marubeni (MARUY) and May Mobility, with trials expected in Atlanta as soon as this summer and a broader launch in Dallas by 2026. Lyft CEO David Risher says autonomous vehicles may reshape the ride-hailing market over time, and Uber CEO Dara Khosrowshahi predicts they could supplant most human-driven cars by around 2040. This article first appeared on GuruFocus. Sign in to access your portfolio
Fast Company
12-05-2025
- Business
- Fast Company
Lyft CEO David Risher on competing with Uber and the future of rideshare
The rideshare market has reached a crossroads. Autonomous vehicles are on the rise, driver unrest is mounting, and customers are questioning everything from pricing to trust and safety. In the midst of it all, Lyft is mounting a comeback. CEO David Risher, who came into the role at Lyft two years ago, is taking a bird's-eye view on the operation and pushing to reposition the company squarely against their competitor, Uber—with faster execution, bold new programs, and Lyft's biggest international acquisition to date. This is an abridged transcript of an interview from Rapid Response, hosted by the former editor-in-chief of Fast Company Bob Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with today's top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. [A recent letter you wrote to shareholders] includes this phrase 'falcon mode,' which has also sparked a bunch of interest. I wanted to ask you to explain, what is falcon mode? So falcons fly thousands of feet in the air. But of course, they can't stay up there always because they've got to eat. So falcons have adapted to become extremely perceptive at seeing very small things on the ground and then being able to dive down very, very quickly, grab the mouse or whatever it is, and then go back up to cruising altitude. I use that kind of figurative language to help my team actually understand my job, which is to try to stay up at the high level. I mean, a CEO doesn't hopefully need to be in the details every single day, but I have never found a successful CEO, and I've worked for some very successful CEOs, I'm very lucky in that way, who doesn't also judiciously decide when to come down and to go really, really deep into the things, to get to the point where you're literally saying, 'You know what, I think this language on the screen isn't quite doing the job,' as an example. How much of that is about you identifying something that's strategic that you could have seen at 30,000 feet that maybe others are missing versus pointing to your team that this is the way you want them to act? I think if you never do it yourself, if all you're doing is telling your team, 'Go look at this, go look at this, go look at this, go look at this,' I think the chance of you having good intuition on that, where to actually go deep, is low. But then on the other hand, hopefully they see you doing it, and they become comfortable themselves. And again, I want to make a distinction: you haven't mentioned the word micromanagement, but that's a word that sometimes people say, 'Well, doesn't that sound like micromanagement?' And for me, the distinction I make is I try, again, sometimes unsuccessfully to be clear, but I try not to use it as a way to propose answers. Of course, sometimes I do. I'm a human being, I have ideas, but I try more to use it as a way to understand a problem space better. A story I tell in the letter is you can understand the issue of surge pricing at a generic level. People don't like prices that are unpredictable, and that gives you a certain amount of insight. But when I drove and I picked up a woman named Anne, and she said, 'Sometimes the price is 20, sometimes it's 30, sometimes it's 40. When it's 20, I take a Lyft. When it's 40, I drive myself, but I'm really annoyed. I get up at six in the morning, just check the price every single morning.' You have these conversations, and you get so much more empathy and understanding for the contours of that problem and why it matters so much at an individual level. And then you can go back to your team and say, 'You know what, guys, I know we've been talking about trying to get rid of surge pricing or at least some of it for a while. Let me give you some examples that I've picked up by going deep that maybe help us understand both why this is a big problem for people and maybe understand, as I say, the contours of this space a little bit better as a result.' And so this is why you get on the road and you drive a Lyft every six weeks for a day, so you're close to the experience of both sides of your marketplace, the driver and the rider. It's exactly it. And it's so interesting. I actually took my first drive, I think it was a week before I joined even. So it's been a little bit over two years now. And at first what I really thought it was going to be is really understanding the driver app and the driver experience. And I learned a lot, but what it's really taught me is how the rider experiences the ride. And it's so different to look at the data versus talk to the riders and ask them, 'Why did you choose Lyft today versus the other guys? What are some of the perceptions you have?' And sometimes people talk about a credit card deal we have with Chase Sapphire Reserve, and sometimes people will talk about a bad experience they had on the other guys. Sometimes they'll talk about how they think they like our values better or they like Women+ Connect, which is a service we have. So you get a sense of both sides of the marketplace, and it's quite efficient. I mean, it's only two or three hours, and gosh, you can learn a lot in two or three hours if you really, really focus on them. You have more riders than ever, you have more drivers than ever, but you're still far behind Uber, which has 75% of the market or something. I mean, we've heard a lot about the streaming wars in TV, and there's arguably a ridesharing war going on. Do you have to beat Uber to become like Netflix in streaming, or is it just about staying competitive? You don't have to be Netflix. If you can be BritBox, and that's you, that's okay. So a couple of things I think about that, every year just in the U.S., so we're not even talking about overseas, just in the U.S., people take about 160 billion rides in their own car, 160 billion. So every single one of those rides, they're getting behind the wheel, their stress level is probably going up a little bit, hopefully they're not texting, but they're certainly tempted to text every time they come to a stoplight, they're road rage sometimes, frustrated. At the very least, they're not able to do very much else with their life, and then they got to park, and then they got to pay for parking, and all these different things. So there are a lot of times where, you know what, it's actually kind of nice to have someone else pick you up. You can do the texting, you can sit back, you can make a phone call if you want to, you can put on your makeup if you're a woman, whatever it is, guy too, whoever. So the point is it's a better experience, and we want to do it so reliably and at such a high service level that we move from, call it, 800 million rides a year, which is about what we do, to a billion to two billion to three billion to four billion. So do I have to compete with someone else to do that? Not really. Now, we have to compete with private cars, and to a certain extent, with people staying at home on their couch. I mean, those are things I have to compete with, but I don't really need to dominate the other guy. Now, having said that, there is another guy in the marketplace. Our share when I joined was about 26% share. Now it's about 31% share. So we've made nice progress there, and that's hard. I mean, every single point of share you get over a bigger competitor is quite hard. I'll give you two stats that I'm very proud of. One is we pick you up about 30 seconds faster than they do. Second is for our drivers, we have a 23-point advantage, 23-point advantage in preference of dual-appers, people who use both apps. Who would you prefer to drive for? So I consider those to be very good leading early indicators that we're doing some things well. The share thing is a little bit of a trailing indicator. It's just an interesting little thing to look at. Leading indicator is more to people like you more, you get better service. And over time, that tends to grow a business quite nicely.
Yahoo
11-05-2025
- Business
- Yahoo
Lyft CEO: Self-Driving Taxis to Be Part of Fleet Someday
Lyft CEO David Risher discusses the ride-hailing company's growing bookings and how Lyft is investing in new markets. Risher joins Caroline Hyde and Ed Ludlow on "Bloomberg Technology." Sign in to access your portfolio
Yahoo
10-05-2025
- Business
- Yahoo
Why Lyft, Inc. (LYFT) Skyrocketed This Week
We recently published a list of . In this article, we are going to take a look at where Lyft, Inc. (NASDAQ:LYFT) stands against other stocks that moved the market this week. The stock market edged lower week-on-week, as cautious investors repositioned their portfolios ahead of the United States and China's high-stakes negotiations on trade policies that have for months dented global economies. On a week-on-week basis, the Dow Jones was down by 0.16 percent, the S&P 500 dropped 0.47 percent, while the Nasdaq dipped by 0.27 percent. Beyond the major indices, 10 companies bucked a wider market decline, with gains skyrocketing in just a week's trading. In this article, we name the 10 top-performing companies this week and the primary reasons that bolstered their gains. To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume. The stocks were chosen based on the highest percentage increase in closing prices on May 9 as against their prices a week earlier, or on May 2. A ridesharing passenger and driver in a car, looking out the window in anticipation of their destination. Lyft Inc. grew its share prices by 31.62 percent week-on-week, to end at $16.65 on Friday versus the $12.65 a week earlier after swinging to profitability in the first three months of the year. According to Lyft, Inc. (NASDAQ:LYFT), it achieved a net income of $2.6 million during the period, a reversal from the $31.5 million net loss in the same period last year, as revenues grew by 13.5 percent to $1.45 billion from $1.277 billion year-on-year. Gross bookings also grew by 12.7 percent to $4.28 billion from $3.69 billion in the same comparable period, supported by the increase in the number of active riders and ridership. For the second quarter, Lyft, Inc. (NASDAQ:LYFT) expects ridership to grow by mid-teens, as well as gross bookings to settle between $4.41 billion and $4.57 billion, or a 10 to 14 percent growth year-on-year. 'With our expansion into new demographics via Lyft Silver and into Europe with our planned FREENOW acquisition, we're putting all the pieces in place for sustained, market-leading performance,' said Lyft, Inc. (NASDAQ:LYFT) CEO David Risher. Overall, LYFT ranks 4th on our list of stocks that moved the market this week. While we acknowledge the potential of LYFT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LYFT but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
