Lyft CEO: 'We have a 45% increase in active drivers year-over-year'

Yahoo Finance's Emily McCormick and Brian Sozzi spoke with Lyft President and Co-Founder John Zimmer about the ride-share company's driver recruitment during the pandemic and the shift to electric vehicles.

Video Transcript

BRIAN SOZZI: The COVID comeback is unfolding at ride-sharing giant, Lyft. The company, again, delivered adjusted operating profits in the third quarter, as mobility across the country has picked back up. Lyft also forecasted adjusted operating profits for the fourth quarter or the current quarter.

Joining us now is Lyft's President and Co-founder, John Zimmer. John, always nice to see you here. Are you able-- are you able to find enough workers to meet that demand you're now seeing come back on the platform?

JOHN ZIMMER: Yeah, the situation is improving very well. We had 45% increase in inactive drivers year-over-year. Obviously, we're still coming out of a pandemic, but when we look at other, maybe comparable, labor markets, if you look at retail industry, the hospitality and leisure industry, active drivers on Lyft since January are coming back five times faster than those industries. So I think a big part of that is the great flexibility we offer where you can turn on and off the app and earn money whenever you want. So overall, yes, we're still coming out of a pandemic, but the service levels are improving.

BRIAN SOZZI: John, you know I use Lyft. Why are prices still high, and when do you see them coming down?

JOHN ZIMMER: It's what we were just talking about. I mean, you know, we had a pretty large disruption to the marketplace. If you go back to the beginning of the pandemic, rides or demand was down 70%.

And then drivers said, well, for two reasons. One, for health reasons, and two, because demand left, that they were going to pause on their use of the platform. And now drivers are coming back, prices are improving. They're not yet where we want them to be, but we're also doing other things to help make sure riders, of which two million new riders came to the platform in the last quarter, get better price options. So whether it's price or time that's most important to you, we now have multiple options, whether you want to wait 10 minutes, get picked up in one or two minutes, or wait the standard three, four or five minutes, different price options that allow us to better manage the marketplace and give you those different costs depending on what's important to you.

EMILY MCCORMICK: John, this is Emily. Some really interesting stats on your bike and e-bike business in the quarter. I think I saw during your earnings call 40% of total ride volume in New York was comprised of Citi Bikes. How do you see that part of your business continuing to expand, and can that kind of growth be emulated in other regions in the US?

JOHN ZIMMER: Yeah, thanks for that question. We're quite excited about our bike and scooter business, primarily the bike-share markets where we have exclusivity. So New York, as you mentioned-- Citi Bike is a Lyft brand, is a platform that we operate, and it's really important we see what consumers-- how they're behaving in regards to transportation in a market like New York. They look at their alternatives. They could take the subway, they could take a bike, they could take a Lyft, and having those all in one place and seeing the crossover between someone being able to get their last mile from a bike is great to see.

We also have that exclusive relationship in Chicago. We have bike-share in San Francisco, DC, Boston, and other markets. So yeah, I think there's a huge opportunity with bikes. We've been somewhat quiet about it to date as others have kind of come in and out of the market, but I think what we've seen makes us quite excited about the future.

BRIAN SOZZI: John, I need you to weigh in here. Uber and Hertz have made a lot of waves the past two weeks on them teaming up for EVs. Now, if I recall right, Lyft was out in front of this saying that they want-- you want to have most of your fleet or all of your fleet EV based by 2030. And you launched a program called Flexdrive. Now, you have the cash to do this, do you have any plans to buy electric cars for your drivers?

JOHN ZIMMER: Yeah, I mean, not only do we have the cash to do this-- we have $2.4 billion now on the balance sheet, but we also have the financing partners and the right structure to do this. We have been willing to get deep into transportation, to be focused on transportation where others are doing many things. And so being reliant on third parties is not something that we need to do. We will have partners, but we've had EVs in the market for years.

Our drivers love having EVs, those particularly that utilize the vehicle a lot like they do on ride-share versus personal vehicle, because the payback on a battery is much faster. So yeah, we were the first company to commit to 100% electric vehicles by 2030. And the reason we're so confident in our ability to do that is because of Flexdrive, which you mentioned is our own ability to get cars in the hands of our drivers.

BRIAN SOZZI: It's unclear to me, John, how Tesla's going to make 100,000 electric cars for Hertz. Are you in talks with other major automakers that are now switching or transitioning very aggressively, I would say, to electric cars? Are you talking to them about getting those cars onto your platform?

JOHN ZIMMER: We are. We're talking to the OEMs, the car manufacturers. We're also talking to policymakers. There's a huge shift happening. We feel very well positioned and we want to bring multiple products to our drivers. And the way that the car manufacturers are looking at us is the ability to buy tens of thousands, if not hundreds of thousands of vehicles-- or not purchase them ourselves but get the financing for them for our drivers is a huge opportunity for these OEMs as they make the shift themselves. So a lot of great conversations.

EMILY MCCORMICK: And in that same vein, I'm also wondering, with the policy backdrop, how do you see Lyft's business being impacted by some of the proposals in the White House's nearly $1.8 trillion Build Back Better plan? Because it does look like there will be incentives on the clean energy, electric vehicles, and electric bike side as well.

JOHN ZIMMER: Yeah, exactly. Like you said, we're happy to see that the EV incentives, the bike-share incentives. In there, there's also some work around health care rides, which is an area that we play in as well. But on the EVs, as you look back, historically, the government has given a federal tax benefit to people that can buy a car.

Not everyone can afford an electric vehicle, and oftentimes drivers on our platform want to lease or rent an EV. And what we can do by working with regulators is get EVs into the hands of those that might not necessarily be able to afford it, but by the way, who utilize the vehicle more, which means the environmental benefit of having EVs in the hands of ride-share drivers can be double or triple that of having them in the hands of a personal vehicle owner.

BRIAN SOZZI: John, real quickly before we let you go-- because I think maybe this one stat partially explains why the stock is reacting the way it is-- for next year, for 2022, will your revenue surpass your 2021 levels?

JOHN ZIMMER: You know, I'm not allowed to give guidance on next year, but I can say it's going to be a great year next year as the recovery continues to happen. And we saw revenue year over year going up 73% and so we should see that continued growth as we look forward.

BRIAN SOZZI: Fair enough. Lyft President and Co-founder, John Zimmer, always good to see you. Thanks for taking some time. We'll talk to you soon.