Lyft has been scrapping with Uber for years for a bigger sliver of the car-share market, but its new CEO thinks that the challenges to the company go beyond just its longtime competitor.
The company’s founders have just stepped back from their executive roles, and David Risher, who was previously a senior vice president at Amazon and a general manager at Microsoft, has been given the top spot and the task to navigate the company through a period of economic uncertainty and immense competition.
“At some point, I don’t think of this as just an Uber battle,” Risher told MarketWatch on Monday. “It’s a battle against staying at home. How do we get people out? How do we get them playing and working together?”
COVID-19-linked restrictions and cautious behavior severely dented the ride-share business as more people were confined to their houses. Lyft reportedly lost 75% of its ridership in the 12 months between April 2019 and 2020, and Uber said its ride booking dropped by 75% between April and June 2020.
While Risher didn’t reveal his grand plan for prying people out of their homes, he did say that unlike Uber, Lyft would not enter the food delivery space. Uber launched its food delivery arm, UberEats, in 2014 and by March 2023 it had become the second largest meal delivery service in the U.S., according to Bloomberg Second Measure, a data analytics company.
“Our primary vehicle (ha!) will be rideshare. And we’re going to 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,” Richer said in a statement Monday.
When asked for a comment, Lyft pointed Fortune to Risher’s letter from Monday and a statement from the company announcing the new leadership.
Tough Competition in Ride-Sharing
As the world returns to normal after the darkest days of the pandemic, Uber has won over more customers than Lyft.
Uber’s share of the ride-hailing market in the U.S. went from 62% in the start of 2020 to about 74% now. Meanwhile, Lyft’s market share has dropped from 38% to 26% over the same period, according to research firm YipitData cited by the Wall Street Journal.
Shares of Lyft plunged 30% in February after the company issued a weak earnings forecast for the first fiscal quarter of 2023, and its share price has dropped about 73% since last March.
“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,” Risher told the Wall Street Journal in an interview Monday.
“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.”
Uber and Lyft have fought for market share in the ride-hailing market for over a decade now, and have managed to stay alive while other companies have come and gone. In recent years, Uber has expanded its operations globally and to other forms of delivery and transportation, while Lyft’s services have predominantly focused on ride-sharing and vehicle rentals within the U.S. and Canada.
Lyft has not reported an annual profit since it was launched in 2012, although its losses have been getting smaller. Lyft began restructuring its business in November to cut operating expenses, and laid off almost 700 workers to keep up with macroeconomic challenges.
Uber, in the meantime, has managed to attract and retain more drivers with higher bonuses during a widespread driver shortage. Its earnings for the last three months of 2022 beat analysts’ expectations in February, and the company put out an upbeat forecast for bookings on its platform for the coming year. However, Uber has never reported an annual profit since its inception either.
