Pod Insights How I Built This with Guy Raz How I Built Resilience: John Zimmer of Lyft About this episode This year has brought unexpected challenges to Lyft, starting with a 75 percent drop in rideshares at the beginning of the pandemic. But co-founder John Zimmer says ride-hailing is returning, and the company is continuing to diversify with car, scooter, and bike rentals. John also answers questions about whether app-based drivers should be thought of as part-time employees or independent contractors. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating turbulent times.
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0:00 Guy Raz? We get support from US Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't. Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems.
0:45 Guy Raz? But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands, on the table in rewards you never earned. Money that could have gone back into the business. Path B, you pause and get the US Bank Triple Cash Rewards Visa Business Card. Now, you're earning 3% cash back on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes
1:30 Guy Raz? based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. Our presenting sponsor today is Anthropic, the team behind Claude. Every founder on this show started with a hard question. Not the marketing plan, the 2:00 AM kind. Is this idea any good? Am I the one to build it? Should I quit my job? Anthropic got built the same way. A public benefit corporation founded on one Hard question. How do we make sure AI goes well for people?
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4:24 Guy Raz? puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new, expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it. If your revenues are at least in the seven figures,
5:09 Guy Raz? get NetSuite's free business guide, Aligning for the Agentic Era: How AI is Changing Everyday Work, at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built. Hey, it's Guy here. So have you ever thought about starting a business? And if so, what would it be? How do you come up with an idea? How do you find the money to start? How do you get the word out about your product or service? What do you do if your idea isn't working? And how do you pivot? Well, to answer those questions, I've written a book. It's called, what else? How I Built This. And it's full of inspiring stories from some of the greatest leaders and entrepreneurs
5:53 Guy Raz? in the world, who've been through the trenches, made big mistakes, and lived to tell the tale. If you're looking to start something or just want to be inspired by those who have built incredible things, pick up How I Built This now, wherever you buy your books, or by visiting guyraz.com. And thanks.
6:16 Guy Raz? Hey, everyone, and welcome to How I Built This: Resilience Edition. On these episodes, we're talking with entrepreneurs and other business leaders about how they're coping during this very challenging time. And today, we're going to hear from John Zimmer, the co-founder of the ride-hailing app Lyft. We first spoke with John back in 2017, but now, fast-forward a few years, and like most of us, John is dealing with challenges he never anticipated. But when we spoke a few days ago, he sounded pretty optimistic.
6:47 Speaker 01 Personally, I'm doing OK. I think the business has had a tough time, but has seen some really strong recovery since the bottom. We were down about 75% at the peak in terms of Rideshare rides. We've now returned to a little under half down, which is actually good progress. We've always been a very long-term-minded company. We've had hard times before. We've always been the challenger brand. And so, actually, I think moments like this are opportunities for us and our team to shine, and so happy to share some of that with you today.
7:22 Guy Raz? Yeah, I want to talk about that. I mean, let's first talk about, like, kind of drill down into some of the challenges first. There's no question that this has to be the most challenging time in your leadership of Lyft. I think it's the most challenging time for any business leader or founder around the world today for a variety of reasons. And as you mentioned, it's been a tough year for Lyft. You had to have some layoffs in May, I think about 1,000 layoffs, which could not have been easy for you to go through. So as you began to see the pandemic having a significant impact on your business, what kinds of conversations were you having with your leadership team, with your co-founder Logan, about ways to kind of begin to build resilience?
8:03 Speaker 01 One of the conversations that we've had, or one of the challenges throughout, is how many different audiences, groups of people that we're working to take care of throughout this, right? So we have our drivers, we have our riders, we have our employees. Within employees, there's those that are working in person to help drivers at operations. Centers and there there are those that could work from home. So all different populations that we want to take care of. Investors as well who who are judging those decisions we make. So I think that's been a really interesting conversation. Also, the conversations around short term thinking versus long term thinking. There are short term decisions we need to make in order to preserve the long term mission that we have as a company.
8:46 Speaker 01 And those have been really key decisions. You talked about the layoff. That was very, very difficult. It forced us to make hard decisions, some of which I think actually in hindsight were very healthy for the business. But very difficult to make, especially for people that are all in this tough time where where the job market is difficult. Those were not easy decisions.
9:07 Guy Raz? Let's talk about some of the short term decisions that you had to take. I mean, you are a publicly traded company. So you're obviously accountable to investors and it's everything's on the table. You have to review. You can't hide anything. First of all, just to keep the business operating and to get you through this time, because this is going to be a challenging year. And there may be a recovery next year for you. We'll talk about that in a moment, but you knew this was going to be a tough year. So was one of those decisions to retain as much cash on hand? Was that one of the initial decisions that that you guys had to take?
9:40 Speaker 01 Yeah, obviously. So we we look at the cash that we have on hand. We also raised our first debt to add cushion. We're actually in quite a strong position. We're lucky that we went public when we did. And have, you know, nearly $3 billion in the bank. What we did to start is we ran all different scenarios. We said, okay, if we were 75% down for six months or two quarters. You know, what would the situation be like for cash? If we were down, you know, for four quarters, what would it be like for cash? We ran, you know, the the worst case scenarios, the medium case scenarios and the best case scenarios. And then made the decision that, you know, raising the debt was kind of a no regrets move.
10:23 Speaker 01 But then also to your point, preserving the cash that we do have on hand. Making decisions about expenses that we had in the office that were more of a luxury, making decisions around. Certain teams that we needed to tighten up. For example, on the on the operating side, there were some markets where we had to close some of our centers.
10:43 Guy Raz? What are you finding out from users? Like, why? What is what is it that is preventing them from using Lyft? Is it basically that they just don't have anywhere to go? Or is it is it the fear of being in a car with somebody else?
10:55 Speaker 01 It's a mix of both. You know, first, I think it's people changing their transportation behavior, their actual transportation behavior. And then secondarily, it's obviously the the questions around health safety. And I'd love to walk through what we're doing on on that end. As you open the app, we ask both driver and rider to confirm that they're wearing a mask. We ask driver and rider confirm that they haven't been in contact with anyone that has COVID. And we ask everyone to keep their areas clean and open windows if possible. So that's gone a long way. I mean, if you if you zoom out, actually, the fact that half as many rides are being taken now as before, I'm actually quite happy with in a strange way because I know many people that are they're not going into the office. So that's a huge change in transportation.
11:39 Speaker 01 So the fact that one out of two rides are still present, even in this environment, shows some flexibility in the model because we've seen different types of rides. We've seen a lot of essential workers using this way more because their other options, potentially public transportation, are things that they're more concerned about from a health safety perspective. And so we've seen those rides increase.
12:01 Guy Raz? I mean, one of the things that you you did before the pandemic was to diversify. I mean, Lyft invested in bike share programs and in and in the scooter programs in in certain urban areas around the country. Given that the rideshare part of your business is still the core part of your business, what are conversations you're having internally about creating other revenue streams in the future to, you know, if rideshare doesn't recover as quickly as you hope or expect? Or if, you know, if rideshare is is a completely different thing in the future? What what other kind of places are you looking to diversify?
12:34 Speaker 01 Yeah, so I mean, the the good news is transportation is fundamental and is something that through the recovery is going to be important and people will need. So one on on bikes, you know, we own the system, City Bike in New York City, Bay Wheels in the Bay, Divvy in Chicago, and you can access them through Lyft. And for City Bike in New York, I believe it was last weekend, we hit our record of over over a hundred thousand rides in one day. And so we're actually seeing faster recovery and and not as deep downside on on those modes, which has been really helpful. The other area we've looked at is delivery. So we have no intention to be another kind of food delivery consumer app. We will not
13:18 Speaker 01 do that. But there's a lot of small and local businesses that are having to pay thirty percent, twenty percent of their revenue to be on those platforms. And so we think there's a huge opportunity to help those small and local businesses have their own kind of capabilities and provide more jobs for drivers. So we're experimenting with that. We started that with with Essential Deliveries. We've worked with partners to deliver millions of meals for people in need during this time. So I think that's another really interesting opportunity on the driver's side.
13:50 Guy Raz? I want to ask you about an initiative that you recently put out. I think it's called Resilient Streets, where you asked urban planners to sketch out plans for what cities will look like with fewer cars. Basically, you know, city streets that are designed for more bikes and e-scooters and e-bikes and so on. I mean, it's interesting because, you know, your business model depends on cars and and ride shares. So walk me through the thinking behind this and how would that affect your business model in the future?
14:20 Speaker 01 Yeah, so if you zoom out and you think about our our mission, improve people's lives with the world's best transportation. From the beginning, we looked at the fact that Americans spend nine thousand dollars every year owning and operating a car, that they use four percent of the time. They spend more money on their car than they do on food, than they do on healthcare. The only thing they spend more money on than their car is their house. And to us, that doesn't- Make any sense. So we want to create a whole new way for people to access transportation. Because we think by doing that, we can allow cities to be built around people instead of car ownership. Right? We have so much parking everywhere. Studies show when you build more streets, you get more traffic.
15:03 Speaker 01 And so especially in a moment like now, when you can rethink everything or that you're forced to rethink everything. Thinking about street design is is critical. You know, we have the bikes, as I mentioned, across the country. There would be a lot more people using bikes if there was safe bike infrastructure. There would be a lot more people walking and enjoying local commerce in cities. If it was always safe for pedestrians and there was easy access throughout the city. There is going to be transportation in cars, in vehicles. That will always be important. But the infrastructure needed, whether that's parking or the number of streets that we have, or the lack of safe streets for bikes and pedestrians needs to change.
15:48 Guy Raz? So I mean, could you imagine a future where the bulk of your business comes from people using bicycles and e scooters? And other modes of transport?
15:57 Speaker 01 I think in like a very urban core, I mean, Manhattan is a great example. I forget the average speed of a car in Manhattan.
16:05 Guy Raz? Yeah, it's like it's like seven miles an hour or something.
16:07 Speaker 01 Single digits is not very impressive. So in urban cores, micro mobility or bikes and scooters. As those vehicles get better and better and safer and safer, and as the street infrastructure adapts to make the environment safer. Absolutely, it can be the best way, the fastest way, the cleanest way, and the most enjoyable way to get around your city.
16:27 Guy Raz? All right, let's get to some questions, John. Actually, Madeline Chen had a question that I think we just answered. Her question was, is Lyft considering diversifying beyond ride sharing transportation?
16:37 Speaker 01 Well, one other, if it's okay, one other mode that we've been really excited to launch or to grow, even in this environment, has been a rental service that we created. So car rentals. As we get people out of car ownership, there are use cases if you go away on a weekend on a, you know, two hour. Drive and you don't own a car, having easy access to a car rental is important. So with Lyft Rentals, you get a Lyft to the car rental location that we operate. And then you can just grab the keys and go. There's no counter. It's really fast and easy. And in COVID, we launched a kind of contactless experience to get the car. We also announced a partnership with Sixt, which is a European car rental operator,
17:18 Speaker 01 such that we brought that technology and that access through our app to their vehicles as well.
17:24 Guy Raz? This is a question from Kyle Ashcraft from Facebook. Kyle asks, what do you see as a future for subscription-based ride sharing? I know we talked about that at the How I Built This summit, which was you had a vision for in the future, you know, people will have subscriptions for bikes and for e-scooters and for Lyft rides. What's the status of that?
17:43 Speaker 01 Yeah, I love that question. We have a program called Lyft Pink, which is our subscription service. And so you pay a monthly fee to get a 15% discount on all rideshare rides, as well as access to bikes and scooters. We're even testing unlimited access to bikes and scooters. So this is live. You know, we're going to be testing upgrades on your car rental. So by having all these different consumer transportation options, Lyft Pink can become your transportation wallet, can become the most affordable way to access transportation.
18:17 Guy Raz? When we come back in just a moment, I'll ask John about one of the biggest debates in the world of ride hailing, whether drivers should be thought of as independent contractors or employees. Stay with us. I'm Guy Raz, and you're listening to How I Built This, Resilience Edition from NPR. Stripe is built for whatever comes next because the pace of change has never been faster than it is right now. New business models, new currencies, and new expectations for speed, reliability, and scale. Stripe builds financial infrastructure that helps businesses start, grow, and operate globally.
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20:11 Guy Raz? Hey, welcome back to How I Built This, Resilience Edition. And I'm speaking with John Zimmer of Lyft. And you may have seen the company in the news this summer because it's been lobbying hard for a California ballot initiative called Proposition 22. And I'm oversimplifying here, but basically, if it passes, it will overturn a state law that would require companies like Uber and Lyft to treat their drivers as W-2 employees, not contractors. But as you can imagine, the issue is pretty heated. A lot of people are angry on all sides of this. There are drivers who support the initiative, drivers who oppose the initiative, consumers who support and oppose it.
20:54 Guy Raz? So first of all, can you explain, from your perspective, why would it be so hard to treat your drivers like part-time employees?
21:00 Speaker 01 Well, I think first, it's starting with the fact that many of our drivers already have full-time work. The majority, something like 80% of our drivers, maybe in California, it's 86% of drivers, drive less than 20 hours a week. This is something someone does maybe five hours a week, 10 hours a week. So of course, there's people that are doing it 40 hours a week. But the far majority are doing it less. And I think it's important to zoom out and have the nuanced part of the conversation, which is what do we want? To accomplish, what is the right thing to do here? The right thing to do is to get benefits for drivers depending on how much they work. If you're gonna drive for five hours for three months to save money for a wedding
21:40 Speaker 01 or for a medical expense, the the way we're being, you know, forced into employment would would make that not tenable. And so what we're saying is, okay, so let's look at this new form of work. Let's not ignore that these drivers deserve benefits, but let's have the benefits scale with the amount of work that we do. Uh, and so Prop 22 is that middle ground. We're saying here's a better solution that provides health care for drivers driving, you know, 15 hours or greater.
22:05 Guy Raz? So just to clarify, I mean, your position is we don't oppose providing benefits to people who drive for Lyft, but we want to be able to scale those. So if you drive more, we want to be able to offer those benefits. But you're essentially saying you don't want the state to legislate and regulate and force you to do this?
22:22 Speaker 01 No, I mean, we're not, you know, the type of company that says that is against regulations. We think regulations make a lot of sense. We think labor protections make a lot of sense. I think the labor movement in this country has been critical for workers in America. And I think we have a new form of work that five years ago I went to our general counsel and said, how can we get benefits to drivers that are driving more on the platform? And she said, well, you'd have to classify everyone as an employee. And then 80 to 90% of drivers likely wouldn't be able to drive on the platform. And so we've been trying to find a portable benefit type structure for a while. Four to one driver support Prop 22 versus the alternative.
23:05 Speaker 01 Uh, and so we've heard their voices and we've incorporated that into Prop 22.
23:09 Guy Raz? When you go to Sacramento, um, when you make this argument to legislators, you know, what is it that you're not able to convince them of?
23:16 Speaker 01 The politics, honestly. So I've not only spoken to legislators and politicians, I've talked to labor leaders, listened and provided this viewpoint, uh, listened to drivers, listened to all these constituents. And the majority, if not all, agree to a certain extent. The challenge is is political. We're living in a Where nuanced opinions and non-extreme opinions are harder to legislate, are harder to get through. And so there's like a political survival aspect. And so we have to be part of creating the political conditions by having drivers have a voice, demonstrating that drivers four to one want this versus the alternative,
23:58 Speaker 01 demonstrating the true consequences of eighty percent of people, at least articulating them and hoping not to demonstrate them in practice. But I think the challenges have been, it's been hypothetical because it hasn't been real. And because political conversations favor kind of extreme opposing views versus kind of nuanced compromise.
24:20 Guy Raz? I mean, I wonder if we're kind of in a moment where, you know, people are sort of fed up with this idea of trusting businesses, right? I mean, in a sense, what you're saying is, hey, you know, we operate in good faith. We can be trusted to operate as a responsible employer and as a responsible business because the market is going to judge us. Users won't use us if we're not doing that. And that makes sense, but at the same time, you know, we're in a moment now where people have heard that message in the past and haven't seen it, right? They haven't seen or realized.
24:49 Speaker 01 I don't think people trust businesses, and I don't think that's crazy. I'm not saying, trust us. I'm saying, let's legislate a solution that works well for drivers, works well for riders, works well for the business, works well for labor. You know, the same thing happened in the early days of Lyft, when seven, eight years ago, it was wild to get into someone else's car. It was absolutely something that people said would not happen. And we started doing background checks. We started doing driving record checks before there was a rule to do it. And I did used to have that philosophy of, oh, well, look, we're doing it, you know, trust us. But then I learned quickly and I went to the regulator and I said, you know, we received a cease and desist.
25:32 Speaker 01 And I said, look, like, here's what we're doing, but don't take my word for it. Regulate this. And that led to the state law in California, now known as like the TNC category. And that got brought across the country. So I agree with you. I think people are fed up listening to not only business. But leaders saying, trust me. And that's not what I'm saying. I'm saying, listen to the drivers and let's create a new regulation.
25:54 Guy Raz? All right, let's get to some more questions about Lyft. This is from Daniel Kramer. Daniel asks, are you going to start to focus more on autonomous vehicles? In part because of COVID, does that change that equation for you at all?
26:06 Speaker 01 We have been working on autonomous vehicles. We have a program called Level Five. We have a great team and we're making great progress. We also have a kind of a partnership model called Open Network, where we've partnered with Waymo and others to bring those vehicles to Lyft riders. We actually have some of those in Arizona. So this hasn't changed that. I mean, I think, of course, the ability to create, you know, health safety through autonomous is definitely quite interesting and through designing the vehicle. But it's still a technology limitation and a cost limitation at this point. And so those haven't changed materially during this time.
26:43 Guy Raz? Here's a question from William Curtis, says he's a part time Lyft driver. He wants to know when Lyft will require all riders to upload a photo of themselves for drivers to see.
26:52 Speaker 01 I love that question. Every year, at least once, I drive on the platform. And I was driving and I do it on New Year's and I was doing it this past New Year's and had the same thing happen where a rider came with without a photo and then a rider came with a photo and it was such a more delightful and obviously, you know, safe feeling experience when you had the photo and right after that, which is the reason I drive and I will try to do it more frequently. Right after that, had a conversation with the team about improving the rate of photos uploaded. We don't want it to be a blocker in the sense that we don't want to get less rides, which would be less income earning opportunities for you and the company. But we have increased the percent of riders that are posting a photo.
27:35 Speaker 01 And we're working on more features to kind of encourage that while they're in the ride to simply take a selfie and things like that. So I agree and expect more from us on that.
27:46 Guy Raz? Just for clarification here, when you, when you actually are Lyft driver yourself, when you're out there and it says John, and I'm assuming you're in your Toyota Highlander. By the way,
27:56 Speaker 01 We just upgraded to a minivan, a Honda Odyssey.
27:59 Guy Raz? All right. So if you see a John driving a Honda Odyssey, you know that it's going to be the co-founder of Lyft who's driving you around. And then you can you can ask him any questions you want. You know, a lot of people ask whether now is a good time to start a business. I mean, you started what would become Lyft during the last financial crisis in 2008 with Logan, your co-founder, who you met on Facebook. Do you think that economic downturns are good moments to start businesses?
28:27 Speaker 01 I think so for two reasons. One, depending on the individual, your risk profile might be, you know, the job market might not be as good, and so there may be less risk to taking that risk and starting your own thing. But maybe even more importantly, things are changing. The world is changing. Business is changing. People's preferences and needs are changing. And those are all opportunities. And so I think now is a great time to be an entrepreneur.
28:55 Guy Raz? John, you talk about Logan, your co-founder, and I think a super close friend of yours, as being very kind of deliberate and methodical, and you're kind of slightly more emotional, which is a great balance to have. And you mean, you talked about how you were the one who was like kind of freaking out when things weren't quite going right. And I mean, now, you know, you're a big public company. You're valued at billions of dollars. And despite, obviously, the huge challenges you have this year, are you able to kind of manage stress better? Or actually, do you still have sleepless nights? Do you still have anxiety, even even now?
29:32 Speaker 01 Still have lots of anxiety, but much better, I guess, with the few years and the kind of the experiences we've had with Lyft to manage that. For me, physical exercise helps a lot. It helps me get out of my head. Spending time with my daughters, I have a four-year-old and a one-year-old, and that is incredibly grounding. They say something funny to me, you know, I have to change a diaper or whatever. It is incredibly grounding and frankly, brings joy to a tough day to kind of spend time with them. So that's been helpful as well.
30:04 Guy Raz? Last question for you. When we when we spoke at the summit, the Had Built the Summit in 2018, I asked you, you mentioned how you and you and Logan often ask yourselves, if we were starting over today, what would we do differently? Now that we are here in this very challenging moment, if you were starting over today, what would you do differently?
30:21 Speaker 01 Oh, man, using my question against me, that's good. I think if we were starting over today, I might start with pink, which we talked about as the subscription. As a way to get people to interact with Lyft, to say, hey, there's a membership service. It's going to be more affordable than owning a car. And we're going to go to battle for you to build the best transportation experience, to give you access to bikes, cars, car rental. So I probably maybe start from pink and work backwards.
30:53 Guy Raz? Nice. John Zimmer, co-founder, president of Lyft. Thank you so much.
30:58 Speaker 01 Thank you.
30:59 Guy Raz? That's an excerpt from my conversation with John Zimmer. To see our full interview, you can go to facebook.com/HowIBuiltThis. And if you want to see all of our past live interviews, you can find them there or at youtube.com/NPR. And if you want to find out more about the Resilience Series or other virtual NPR events, you can go to nprpresents.org. This episode was produced by Candace Lim with help from Will Mitchell, Matt Adams, Al Mannion, Gianna Capadona, John Isabella, Julia Carney, Neva Grant, and Jeff Rogers. Thanks for listening. Stay safe, and I'll see you back here in a few days. I'm Guy Raz, and you've been listening to How I Built This.
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