Lyft CEO bets on 'customer obsession' to drive growth

Lyft (LYFT) hosted its first-ever investor day, during which the rideshare company unveiled plans to achieve a 15% annual growth rate in gross bookings. Lyft CEO David Risher joins Market Domination to discuss the company's growth prospects.

Risher emphasizes that the company will drive growth through "customer obsession," noting that the platform currently facilitates 2 million rides per day. With the company planning to receive $25 billion worth of bookings over the next three years, he states, "The only way you get there is just blowing your customers away."

"I think after you get the basics right, you start to build innovation on top of it, and that's how you start to really drive our preference," Risher tells Yahoo Finance, highlighting the importance of continuously innovating to maintain a competitive edge and loyalty from both drivers and customers.

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This post was written by Angel Smith

Video transcript

Lyft revealing 2027 financial targets at at its first investor day this week, the ride hailing company expecting a 15% annual growth rate for gross bookings with more on the road ahead.

Lyft Ceo David Richer is joining me here in studio David.

Thanks for being here.

It's good to be here.

So as we were talking during the break, it seems like the market was relatively happy with the guidance that you guys gave.

So talk to me more about the 15% growth in bookings.

How do you get there?

Is it about taking market share?

Is it about um bringing on new customers?

Talk to me about the the path there.

So the first answer is you get there through customer obsession, right?

I mean, we're a scale business.

So we do 2 million rides a day every single day, 365 days a year.

And if that goes to 2.12 0.53 you know, over time that produces, you know, frankly an incredibly profitable business.

And the way you do that is you obsess over your drivers and you obsess over your riders and that sort of it.

I mean, we're looking at $25 billion in bookings over the next three years by 2027 and the only way you get there is just blowing your customers away.

I'm so fascinated by this because when I think about Lyft versus Uber, obviously your biggest competitor, who, how are customers making that choice?

Right.

Are they making it because they think Lyft is a better experience or are they just looking at the apps and saying this is the lower price and it's going to get to me sooner?

So people do both right?

There are definitely some people who are price shoppers.

Uh There are people who are time shoppers, right?

Who's faster right now.

I'm super happy to say that basically our timing is right on.

It's right on like you're not going to see a big gap there and they do with price.

In fact, often we're going to be a little bit cheaper there.

So that's wonderful.

But I think that's just the starting point.

I mean, with so much in life.

Yeah, you worry about price but then you think is this an interesting or better experience?

So that's why we launch women plus connect for example, that if you're a woman and you want a woman driver, um you can do that right?

That's kind of it and that's only available on us.

Same if you wanna be picked up on time for the airport, the other guys might say they'll do it, but we'll literally give you 100 bucks back if we're more than 10 minutes late for a scheduled ride.

So I think after you get the basics right, you start to build innovation on top of it.

And that's how you start to really drive a preference.

And are you measuring how many of your riders are single platform riders?

And is there a way of doing that?

I mean, we can get hints, you know, it's a little hard.

We obviously don't know all the apps that people have on their phone, but you can kind of get a, get a sense and it might be 40%.

It might be 50% frankly.

If everyone using the other guy also had us on their phone, I'd be pretty happy.

So I'm ok with that.

Sometimes they just have it on the phone.

Oh, no, fair enough.

As long as they look, flip a coin use this half the time and I'd be very happy.

Um The other half of it as you talked about is the drivers and there you guys have made some progress as well.

So, so talk me through that piece of it.

So here's the thing in order to have a healthy, you know, we call it a marketplace, a healthy business.

You've got to have rider and driver in balance.

And remember drivers are actually our primary customers.

There's two customers in every car if you don't have the driver, you don't have anything.

Ok.

So what have we done?

We've put in place a 70% earnings guarantee.

This literally guarantees 100% 100% that every single week a driver will never make less than 70% of what the riders pay after.

Um, fees.

Like like insurance, usually it's more like 8283 can be up to 85% and to guarantee.

And so what that does is that starts to drive preference on the driver side, right?

To choose us over the other guys.

And that's why we have more driver hours than we've had in our history as a company.