Assorted Q&A About the the Future of Lyft | Lyft President, John Zimmer

Yeah, so you're right, we've always been at, in some ways, a funding disadvantage because we started later.

Yeah.

Right? And so I think the things that our investors— one, we've demonstrated phenomenal growth. Last year we grew 5x year over year in a competitive space. In the US, we're growing faster than Uber is. Often people don't realize that. And so one is actually having real traction that you can demonstrate. The other is being able to articulate simply why— if they exist, why is there going to be another player? For some businesses like Facebook, it's— there is a really big network effect where the more friends you have, the more strong that network effect gets. With our business, there is a limited network effect. It's more like you need to build enough cell towers, which in our case is enough rides, such that there are low ETAs. But once you build up that 3-minute ETA, you can gain market share and then you can also differentiate on the product, brand, and experience. So I'd say showing real traction is really important to investors and then articulating simply why you'll either win this space or that there's room for multiple players in that situation. And in the last— given the fact that they've raised billions of dollars, In the last couple of months we've raised $700 million. This is like an insane time and the fact that this is happening, like if you rewind or even if you look at that, that's like the top 5 amounts of money raised by private companies like ever. But there was— it wasn't always easy.

Right, but that's specifically because we're— I'd say we're all at seed stage right now, right? So that's kind of the hardest because you don't have— you just have projections of that growth and you just have your vision.

Pretty much that's all you're selling.

This is my vision, this is where we're going to get at, and then you have competitors who have more money or whatever.

I think another thing that really helps investors is just simple analogies, frankly. So I used a couple when I was talking DVDs. What happens when you're Blockbuster and your sales keep rising and you have 60,000 people working for you and then Netflix comes around, right? And so people understand that analogy. I think investors often— you are more of an expert, you should be, and you likely are more of an expert in your industry than the investor is going to be. But allowing them to like just compare it to something else. I mean, when we were getting started, a lot of people had missed out on Airbnb and so— and were disappointed in that. And so when we were Zimride, And people were like, you're going to get people to share rides in your car? We said, yeah, remember when people got people to share their homes? That became important. So being able to— storytelling is a really, really important part of it.

All right, thank you.

How are you dealing with kind of the now ubiquity and the experience of ridesharing? I mean, I get into any Lyft or Uber, and they drive the boat. So it's kind of the same experience. So how are you— when you sell the vision, I feel the vision, and I felt like that at the beginning. But now it's kind of Uber and Lyft are almost the same thing, they're just cheaper.

Yeah, yeah, yeah. Well, one, I mentioned we just brought in Jesse to help with how we think about experience. And Lyft Line just launched, and we've created some unique experiences with Lyft Line, again, where you can see people's profiles. and get to know each other after the ride. We've created hotspots, which are like basically digital bus stops in San Francisco that allow you to get a less expensive ride. And it actually does play out that different people use the different services. There is overlap for sure. But on the passenger side— on the driver side, I can tell you twice as many women use our service than the other service.

Wow.

And I think that's related to the safety we've built into the system, the brand, and the overall experience. On the passenger side, we skew slightly more like millennial, younger generations and slightly more women. So there are differences that have come out of a different brand and experience, but we've got some other things cooking too so that we can stay true to kind of our roots.

Awesome.

Yeah.

2 things.

One, you, Kiana, and I have the same birthday, so we have the same birthday party.

March 14th. Nice. So does Einstein.

Yeah.

I think anywhere where there's inefficiencies. So as an example, when we go to either rent a property for an office space, or if I was to go buy a house, there's this broker system which feels pretty inefficient. I mean, like 5-plus percent, it's a lot of money when you rent an office building, goes to a broker, and now there's lots of information. So that feels inefficient. As an example, we went— we're addressing a system that has 4% utilization. So to me, it's not specific to an industry. I think everyone will say on-demand and mobile are really interesting. But I just think it's places that are either really inefficient or haven't been innovated in a long time. There's a new company, Honor, that's addressing kind of long-term care for elderly folks and making it a really amazing hospitable experience that uses new technology. There's so many big, big industries that just haven't used technology that are— that because we're in this modern digital revolution are ripe. So it's not specific to an industry, it's more about where's— The big inefficiency. What are you working on?

Right, right. So I'm working on online healthcare services.

It's a female-driven industry.

And as you mentioned, a lot of your customers tend to skew female. So I wanted to ask a follow-up question. What are your thoughts on female-driven industries? Because I don't think we see something like Wishland or anyone else that's investing in female-driven industries.

What can be accomplished?

How are you going to alleviate some of their concerns?

I think that's right there, that the male VCs might not understand a business like that. I think data on how many— what percent of women pay for these services, my guess would be extremely high, and you can use a long period of time, like what percent of women have used this service in a 5-year period or whatever. And I also think that more and more because they've been put on notice, and there are women, like our first investor, Ann, is a seed-stage investor, there are female investors. So that would be one thing is to like to talk to them, but also I think a lot of male VCs are starting to get the message because they've been— they've been told, rightfully so, that there's— women are also often driving a big part of family purchases in any respect and especially in a business like this. So I think with some— with the right investors, there's an acknowledgment that they don't know everything and if a business is targeting someone that they're not, that I think that if you find the right investors, they would be aware of that and take that into account. today's time. Maybe like 5 years ago not, but I think there's plenty of both female and male investors that would get it.

Yeah, so my question is around your name change. Like what kind of fueled the name change to Zimride? Why eventually pivot or close?

Yeah, so the joke is I was tired of people thinking that Zimride was named after me, but it was actually quite annoying because everyone was like, oh, Zim or Zim? And I was like, no, actually it's Zimbabwe. And it's like really obnoxious. But it was— after living with Zimride for a long time, it was like an OK name. But it didn't feel as good as it could be, as catchy as it could be. And we did want to turn the page. And I didn't talk about it too much. That was one of the hardest things that we did is like Zimride is like our first baby. And we had gotten so attached to it, we'd spent 7 years, 3 of which I was living at my friend's mom's house, and so we were really attached to it, but when we made the decision we were very decisive about it, so we need like— language is often very important, right, and so articulating that this was a new chapter, that this was very different, and then we wanted to do something that was a bit more catchy and fun.

So then you let everyone know, like how was that transition?

What do you mean, like internally at the company? Like, what do you mean?

Who are the customers, right?

Yeah, so Zimride, we kept it as an entirely separate product, and that was the long-distance rides, and then we launched the mobile app, which was Lyft, for short-distance rides. And then we sold Zimride to Enterprise Rent-A-Car. We sold the technology and the assets to Enterprise Rent-A-Car, and then just focused on Lyft. And actually, we kept the same company, sold the assets. So the investors, like Anne was the original investor in Zimride, she now owns shares in Lyft. We didn't want to cut out our early investors when Lyft really came out of Zimride.

What's your relationship like with Uber?

Are you guys super competitive? Are you friends? Do you know people over there? We are not friends.

Yeah.

Yeah.

Yeah. I think there's a level of respect, but we are very competitive.

Thanks a lot for coming. First thing, please bring back Match Mini. The best promotion ever. Yeah. Very popular in San Francisco.

Yeah.

So work on that.

Yeah.

Secondly, so I have an online marketplace in a very niche industry, medical marijuana. So I have a lot of regulatory and legal challenges similar to what you guys went through in the early days. What would be your advice for me in terms of government relations from like day one? And how should I go about keeping them in?

Where do you start going? Yeah, so I guess one, I'd talk to someone— like what we did was we talked to an expert. And so Schwarzenegger's chief of staff is an expert in kind of getting new things to light in government. I'm trying to think specific to your issue. And then I would get ready. So what are they— so we were ready for that. We knew what they were going to say to us before they said it. So they were going to say, you are a charter party carrier, which is what California calls it. And we had our arguments that we weren't ready. So I had already worked with a lawyer to draft this large document of saying how we're not citing old cases and everything. And then I'd say, look, it's clearly— it's legally clear that we're not. And putting that aside, because it's like, oh, we can have a legal battle if you want. Let's do that. But we'd rather work with you collaboratively. So our approach, different than others, has been like, let's try to work together.

Right.

If not, we have the movement behind us. We have all our users and the passion behind us that we will fight for what we believe, but first let's try to have a real talk. And that real talk was, what do you care about, regulator? Do you care about protecting existing industries like taxis and limos, or do you care about protecting passengers? Is this just you're concerned about safety? Because that would be a really fair concern or question. And they said, oh, it's safety, of course. And we said, great. Here's what you require. No criminal background checks. Limited driving record checks, $750,000 of insurance. Here's what we require: criminal background checks, which you don't— driving record checks that are more strict and $1 million of insurance. And so I would just say anticipate what they're going to come after you for and have your arguments ready.

Yeah, I've already— it's kind of clear what they're going to come after me for. Yeah.

And also, who are the key stakeholders? Like who's going to be your allies, right? Like that was really important.

Were you reactive or proactive? Did you go out to them and say, hey, let's collaborate, or were you reactive, they get in touch with you?

Mostly reactive. If we had gone out and asked for permission, I would not be here today.

Okay, thank you. Yeah.

Hi, if you had stayed on the East Coast, do you think you would have been able to do what you did? Moving to California? Because I think there are those of us that live on the East Coast and our whole lives are there. And after this awesome experience, it's kind of, well, do I stay out here and keep it going? Or do you think that you would have had the same level of success had you stayed there?

I think for our industry, I think the honest answer is no, I wouldn't have. And it's a hard choice. I'm really close with my family, and they're all still East. And at that time, I think the answer would be no. I think today things have gotten better. New York has developed the ecosystem. Silicon Valley is still ahead of other places in terms of availability of capital, talent, because people are used to working in these environments. So I think there's still an advantage. It also just depends specifically on the industry.

Yeah.

If you were doing financial innovation, Right. Being in Manhattan would be a great place, and there's tons of other industries other than finance that would make sense and be okay to be. So it does depend on the industry, but there are still, I'd say, strong advantages of being here.