Lyft CEO David Risher on paying drivers more and the shift to robotaxis

Today, I’m talking with David Risher, who is the CEO of Lyft. I’ll just say from the jump: I think you’ll like this one, since David is refreshingly direct and doesn’t pull a lot of punches.

He has been on the board of Lyft for years, but he only stepped in as CEO just a couple of years ago to help turn it around. He’s done pretty well with that so far, but he’s pretty straightforward about how the company wasn’t doing well, and he had to make real changes to fix it. That also means he has a clear thesis about what kind of company Lyft really is — a service company that operates in the real, physical world, as opposed to a tech platform, which is very much how its big competitor Uber sees itself. 

Uber comes up a lot in this conversation, actually — the competition between the two is just as fierce as ever, and you’ll hear David make a lot of references to “the other guys” throughout this episode. But it’s not just competition for riders and drivers that Lyft has to deal with. It’s the future of transportation itself, and new AI tools that might take apps like Lyft out of the equation entirely.

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David and I talked a lot about autonomous vehicles and how they’ll impact riders and especially drivers. I always ask my rideshare drivers what I should ask the CEOs of the platforms when I do these interviews, and the only thing they ever ask is simple: when are you going to pay us more? So I asked David straight up: can Lyft pay drivers more money, especially when the promise of autonomy is to replace the drivers entirely?

You’ll hear David point out that it’ll be a long time before Lyft or anyone else gets to the point where self-driving cars are the default. So for now, Lyft is still a service company with humans doing the work. But the transition to a world of robotaxis is going to upend that system over time, and David has a lot of ideas about how it might play out. 

Then there’s the other kind of problem with AI, what I’ve been calling the DoorDash problem. In a world of AI agents going out and booking cars and ordering sandwiches for you, apps like Lyft and DoorDash might just turn into commodities, not companies anyone interacts with directly.

Lyft, in particular, is the exact kind of service that seems really susceptible to this problem, given how many people will just flip between Lyft and Uber based on which one’s cheaper on any given day. So I really wanted to dig into that with David, to see what he thought a service platform like Lyft could do to retain loyal customers — customers they can sell subscriptions and other services to — when users might not be opening apps at all in the future.

There’s a lot going on in this one, but I also have to point out that David is one of the only Amazon or ex-Amazon people to give an original answer to the standard Decoder question about decision making. Like I said, he’s pretty direct. 

Okay: Lyft CEO David Risher. Here we go.

This interview has been lightly edited for length and clarity.

David Risher, you’re the CEO of Lyft. Welcome to Decoder.

It’s great to be here.

I am very excited to talk to you. It feels like I’m having a lot of conversations with various service providers, I would say, across the industry about how AI might be changing, how they get customers, how the platforms themselves are changing, the nature of the people who work on the platforms and provide the services, and Lyft has been there since the start.

It’s one of the very first app economy apps, right? It’s the progenitor of the gig economy; it started, I think, with Uber and Lyft. You have been turning the company around. You’ve got some new ideas. There’s quite a lot to discuss, so I want to start at the start. You’re a new-ish CEO, I would say, a couple of years into it. I think most people are familiar with Lyft in the popular conception of Uber and Lyft. I think I have a sense of what Lyft is. I use it quite a lot because I have a credit card that gives me rewards when I use Lyft. I price-match the two all the time. 

I’m just curious, what is your conception of Lyft today? There’s Lyft in the popular culture, there’s the Lyft many people have experienced, and there’s what you, the CEO, think it is and what you might want it to be. What do you think Lyft is today?

You know what, actually, I’m going to start with what I want it to be. What I want it to be is a way to serve and connect you better than you’ve ever been served before, and connect you to the real world. And so let me say a little bit about this. In a world where the virtual technical world is bigger and more powerful every single day and seductive, I want to be the one that gets you out and makes you part of the real world and maybe connects you to the best Lyft ride you’ve ever had because you have an incredible conversation with your driver or maybe you meet your future spouse in the bar you’re going to. 

That’s really what I want. I really want us to be the physical glue that holds our society together, and do it in a way that blows your mind from a service perspective.

When you say physical glue, do you mean transportation, or do you mean other services? There are a lot of ways to interpret that.

Yeah, for sure. Yeah, no transportation, that’s our bread and butter, that’s what we do. We do it mostly in cars 800 million times a year. If you live in New York City, we do it on Citi Bike; if you live in San Francisco, we do it on Bay Wheels; if you live in Chicago, we do it on Divvy. Increasingly, we’re doing it overseas as well through Freenow. So yeah, it’ll be through transportation, but transportation is a big deal. If you’re older, it’s how you stay connected to your grandkids. If you’re younger, as they say, it’s how you get to work every single day. It’s part of your daily life, and I don’t see that going away anytime soon.

When you say transportation, again, most people today think of…

Yep, rideshare.

Honestly, when you use these apps, a Toyota Camry shows up. What we have developed with all of this technology, billions of dollars in investment in fiber optics and wireless, and 5G, is that you can push a button on your phone and, to a high degree of certainty, a Toyota Camry will show up, which is pretty amazing. That was not true before all this investment. That’s one version of it. 

There’s another version where a robotaxi shows up, or you get a bike, or a shared service shows up of one kind or another. Are you thinking that broadly, and are you thinking about the transition from there’s a driver and a car to maybe it’s a robot, maybe we’re telling you to take a train? There are a lot of ways to think about that. How are you framing that in your mind?

So I would say… So great question, and maybe a nuanced answer. I actually think most people, when they pull an app like this, they kind of know how they’re going to get from A to B, they kind of know that already. So I’m not super focused on maybe it’s a train, maybe it’s a vertical takeoff aircraft; I’m pretty focused on a car, or maybe a bike, is going to be what you’re going to use.

Now, it’s going to change. So let’s use bikes, which is not the place that most people start, but e-bikes today are going bananas, absolutely bananas. And you can feel it, you can feel it in New York or San Francisco, where a couple of years ago, biking was a niche thing, and now it’s a huge, huge mode of transportation, and e-bikes are the reason for that. On the car side, AVs, autonomous vehicles, are going to be a game changer, a game changer. You can sit in the back seat, you can snooze, or you can go into party mode. Maybe there’s a car tender in front who’s making a drink while you’re driving, all kinds of crazy stuff.

But I’m pretty focused on people jumping in a car. Today it’s a Camry, maybe tomorrow it’s something else. We can talk about that. Today it’s driven by a driver, probably tomorrow it’ll be driven by a driver, but also driven by a robot. I’m a, let’s say, an advocate of focus in the technology, but where I’m expansive in my thinking is all the different cool things that you should be able to do by getting out of your house and not just sitting on the couch and watching Netflix and getting a food delivery.

A version of that that I’ve heard several times, most notably, I think, from Brian Chesky from Airbnb, who was on the show, was that we should also start selling the experiences. We want to get you out of your house; we want to get you doing things. Airbnb launched an entire platform that was bigger than just house rentals, all experiences, like where you can have a private chef. That’s a big expansion of the platform. Brian is very convincing when he talks about it. Is your head there? You should open Lyft, and we should send you to a concert?

Maybe. I mean, we’re earlier, I think, in that journey than he is, but I think that the destination is pretty similar. Literally, I actually went to a Dua Lipa concert a couple of nights ago, and it was so fun, and it was great. I can listen to Dua Lipa on my AirPods, and I can do it when I’m walking down the street. She can be with me all the time, but it’s 10000 percent better if we get you there, and we put you in the right seat, and we make sure we pick you up at the end, and we encourage you to do it. And maybe if you’re a Lyft member, you get some sort of special service: you go to a restaurant, you get a special dessert that’s not on the menu, or maybe you get special access to a lounge at the airport. Yeah, I think you’ll find us doing more and more of that.

I don’t want to over-rotate. Look, just getting you reliably hundreds of millions of times a year to where you want to go, picking you up instantaneously rather than having you wait five minutes, not having the driver cancel on you, all of these things. Making sure you get your points, making sure you can spend your points if you want to, all of those basics really, really matter. But I think over time, we need to be advocates for the physical world because the digital world is fighting pretty hard for your attention, and I don’t think that’s a great place if that’s where we end up.

There’s an obvious comparison to Uber that’s going to come up over and over again. I’ll pre-apologize for the obvious comparisons to Uber that come up over and over again, but there’s one here. Dara was just on the show. I saw him again recently. They had a big announcement: they’re becoming like a work platform. What they, I think, abstractly see Uber as is that there’s supply, there’s demand. We are really good at matching supply and demand. We can do that for cars, we can do that for Waymo, we can do that for food. What if we just did it for everything?

And I think the first thing they’re going to do is AI training, which is a wild first thing to do, but they’re like, “Yeah, we got a bunch of drivers who are looking for work to do, opening an app every day, and maybe we can just put other kinds of work in front of them, not just driving cars.” That’s very different from “we’re going to send you to the Dua Lipa concert”; it’s a very different point of view. Did you evaluate a similar idea? Did you say, “We don’t want to just be a work platform; we want to be an experience platform”? Because that feels like a very big decision.

I agree. Look, I won’t comment on those guys, but what I will say is I really like… Okay, I’ve been in the job for two and a half years now, and one of the things that I said from day one is we’re going to be customer-obsessed. And I know you think a lot about Jeff Bezos. I worked for Jeff for a long time, so I don’t have to tell you all the reasons why I think that’s a good idea. There are two passengers, excuse me, two customers in every car: a rider and a driver. And I want to do everything we can to get to know our riders as well as possible and our drivers as well as possible and understand what it is they want.

And so I’m super excited about looking at the world through that eye and say, okay, from a driver’s perspective, I want to make more money, I want all sorts of different things, but I may be a little less enthusiastic about the concept of becoming “a technology platform for everything,” because I think what that tends to do, at least in my experience, is make you less focused on the customers and what it is they really care about and more about let’s build this cool tech to do a whole bunch of different things.

Let’s talk about that two-year journey. You joined the company in 2023, and you made a lot of changes at the beginning. I would say Lyft was not doing well. Immediately, you laid off more than half of the company, which you said, there are quotes, you said that it was very hard. Why’d you make that decision? Why’d you have to slim down right away?

To be able to pay drivers what we needed to pay them and to be able to charge riders what they wanted to, what they could afford. So again, if you start with the idea that customer obsession is what’s going to drive our profitable growth… And that was the thesis. The thesis… I can tell you the whole conversation about how I got selected for this job and how I said no to it, but eventually said yes. And the yes really came to, look, if the board of directors believes that customer obsession is what’s going to drive our profitable growth, then maybe I’m the guy. And if you believe it, there are a whole bunch of implications that come from that. And the first thing is our cost structure — it doesn’t allow us to do what we need to do, which is to pick people up highly reliably, yes, but also at a price that they can afford, and so on and so forth. So that was that, that was that, full stop.

Take me to that room. Vanishingly few people ever get to go interview with a board of directors to be the CEO of a big public company and say no and get called back in. Walk us through that. What was that actually like?

Sure. Here it is, and I’ll go step by step. So I had been on the Lyft board for a couple of years. John and Logan, the co-founders of the company, had invited me to be part of the board mostly because I think they had a very interesting observation, which is that boards don’t tend to think a lot about customers; they think a lot about strategy, they think a lot about finance, but they’re pretty far removed from customers. And I had come up, as you know, I worked at Microsoft in the early days and then for Jeff for a long time, even Worldreader, the nonprofit that I founded, all of these, customer obsession was right at the center. So they’re like, “Look, David, how about you join the board?” So this was in 2021.

In 2023, at the end of the year, John and Logan decided to step back. They had been doing this for a long time. They were about to turn 40 years old. The only thing they’d ever done. Time to turn it over to somebody else. And so the board did what they do, which is just formed a committee, looked at a bunch of candidates. I wasn’t part of it; I was just observing from afar.

And then one day, it was actually Valentine’s Day, I remember it very clearly, 2023, my phone rings, and the board chair, Sean Aggarwal, is on the line, and he says, “David, we’ve got an offer we think you can’t refuse.” And I’m preparing myself for, “We want you to be the chair of the audit committee.” Some terrible thing that he’s trying to butter me up for, whatever. And he’s like, “No, John. Logan and I have been thinking, and as we’ve been looking at all these external candidates, we’ve been evaluating in the back of our heads, maybe the right guy is sitting right here next to us. And David…”

And honest to God, and this is not… I said, “No, that’s ridiculous. I don’t even know what you’re suggesting, but I can tell you it’s not… I’m very focused on getting kids reading. I’ve been focused on that for many years with the Worldreader, which is a nonprofit I started. And you need to hang up the phone immediately, and you can get back to work, do something which has a higher likelihood of success.” But Sean said, “Why don’t you think about it?” And so I did. I literally took a walk around for about an hour, and I thought, and I kept hearing myself say, “Hmm, interesting.” As I mentioned, it was Valentine’s Day, so this became the topic of conversation between my wife and me that evening. And she said, “David, I think you should give it a try or go for it.”

So anyway, then John and Logan, a couple of days later, came over, and they sold me on the idea a little bit. And then they did something, which I don’t think they were being clever; I think they were just being honest. They said, “Just to be clear, we’re not offering you the job; we’re offering you the chance to apply for the job.” And I’m like, “Hold on. Now I’m getting competitive.”

So anyway, over the next… It was about a six-week process. I literally put together a 100-day plan. I talked to every individual board member. Some of them thought it was an interesting idea that I was applying. Some thought it was a crazy idea, like, “This guy? That doesn’t make any sense.”

But anyway, I put together a 100-day plan. I still have it. It’s actually interesting. I was looking at it recently, and the thesis of it was that I want Lyft to lead, and the kicker at the end was, and I want to lead Lyft, and everything in between the two were all the things we needed to do including lay off a big part of the company, changing the composition of the team, starting to innovate again around customers, and on and on and on. Anyway, that was it. One thing led to another, they offered me the job, and I started on April 17th, 2023, and I’m having the time of my life.

Again, vanishingly few people ever get to do this. So I have some very weedy questions.

Do it.

What software did you use to put your presentation together?

That is a weedy question. Two. Google Docs. So first, it was literally a written document. I wasn’t at Amazon at the time when Jeff did the whole “everything has to be a written document and don’t use presentations.” That was before all that happened. But I have always… I like to write, and I express myself through writing. So anyway, I wrote a document that literally was a page of text, and then maybe 2.5 pages of outline, bullet points type thing. That was phase one. And then that turned into a slide show, Google Slides, yeah.

Google Slides. The reason I ask this is I think it’s such an abstract thing, but you sat down and opened Google Docs like anybody else would open Google Docs and thought of a bunch of ideas to turn around Lyft, and then you presented them, and there was some conversation. The board said, “Yeah, that’s what we want to do.” 

Where in that process did you think… Because you were on the board. Where in that process did you think, “Boy, this company has gotten too big and too unfocused, and I need to make these two big changes. I need to cut a quarter of the company and turn over its leadership.” Because somewhere you open Google Docs… Was that the first thing you wrote down? That mechanical writing and thinking process is just so fascinating to me.

This is super interesting. I hadn’t thought about it at any level of depth for a while. So I guess here’s what I knew: There were two things that I absolutely knew: that we had to focus on customers. Again, it sounds cliché, but I can give you an example, okay. This was something that I detected while I was on the board, but didn’t really understand until I was inside the company. We would look at service metrics. An example of a service metric might be driver cancellations. And this wasn’t something that the board typically would look at, but I would have a particular interest in it. So I would say, “Let’s talk about driver cancellations because I have this frustration. I open up the app, and some percentage of the time, I get matched with a driver, and then three minutes later, it says, ‘You’re going to rematch with a new driver,’ which I find irritating, and it also lengthens the process. I don’t like it.”

And so I found out, this was actually after I joined the company, but it still tells the story. This is a company that said they were customer-obsessed. I’m like, “Okay, let’s talk about what that really looks like.” So I said, “Okay, let’s look at…” And they said, “Well, yeah, okay. So it’s about 15 percent of the time that this happens, 15 percent. But the good news is, 95 percent of the time, people end up rematching and taking the ride. So no big deal. Most people are still taking the ride.” 

I’m like, “Okay, hold up, you’ve just glossed over the most important thing, which is that 100 percent of the time it happens, it’s a pain in the ass, and the rider is frustrated by it. And so I will guarantee you, you don’t have to go and do a bunch of research on this, I already know, people who have that experience are less likely to take rides in the future. So you can go ahead and decide if you want to look at that or not, but I already know the answer to that.”

So I said, “Let’s focus on this,” as an example. Early on, this was not my biggest decision; it was one of the smallest. But again, maybe it tells the story. So it was 15 percent of the time that this would happen, and I said, “Let’s focus on it like a laser. Let’s talk about what information the driver gets when they’re making this decision. Let’s talk about how big the font is. Let’s talk about whether we’re talking about it in dollars. Remember, what’s happening in the background is that a driver is deciding whether or not to take the ride, and then, for some reason, a couple of minutes later, deciding differently. So maybe we’re telling them too early, maybe we’re telling them too late, maybe we’re not giving the right information, maybe it’s up on the screen for too little time, maybe the font is too small.”

We looked at every single one of those things. When I started, it was 15 percent; a year later, it was 10 percent; three weeks ago, it was 5 percent. As of this last Wednesday, it was 4.5 percent, so a massive change. But that’s the customer obsession side. So customer obsession, that was the first thing I knew, was that we have to get really customer-obsessed, not just blah, blah, blah. And then number two is we don’t have the right people on the senior management team. And this is old-school Jim Collins, Good to Great, if you’ve ever read the book. If you don’t have the right people on the bus, it just doesn’t matter.

And so I asked our CFO to leave very shortly after joining, and that was its own thing. And then there were cost structure things and innovation things and so forth. But those were the two basics that I started with when I opened up that Google Doc because I knew we had to make changes in personnel, and I knew we had to reorient the company around customers. And then yes, I knew that in order to pay for some of what we had to do to reorient ourselves, we were doing too many things, and we had to cut a lot of staff.

This leads right into the Decoder questions. How is Lyft organized now? How have you structured the company now that you’ve been on a job for 2.5 years?

Sure. So let’s see. Well, I answered the question, but I’ll give you a little bit of context. The question is that we’re organized by customer, or excuse me, the answer is that we’re organized by customer. So we have a rider group, we have a driver group, and we have what’s called a marketplace group. That group is in charge of matching those riders and drivers in real time, 24 hours a day, seven days a week. So it’s operationally, but also computationally, quite complex. We have a group that is focused on our ads business, which is a relatively newer business, a relatively small business, but at a $100 million run rate with high growth and high margins, it’s awesome. They also do some other things that are newer product types. Of course, then we have a bunch of central functions like marketing and legal, and so on and so forth. But that’s really the primary. Oh, and we have a backend group that does a lot of the infrastructure, but really, I’d say the primary organizing vector is by customer.

So when you organize that way, some of those central functions can get pushed in different directions. Engineering is a central function, but if you want to build the concert experience, you’ve got to devote some resources to that versus bringing down rider mismatches, right?

How do you make those decisions? How do you balance that tension out?

We put a lot of our engineering into those customer groups. So those customer groups are full-stack groups. They’ve got product management, they’ve got engineering, they’ve got tests, they’ve got design, all the rest. So we accept the fact that there will be some redundancy and some distribution of talent. Then you have to ask the question: How do you maintain, let’s say, excellence across… functional excellence? How do you make sure your engineering is operating at top talent? And we’ve identified people or teams or whatever to drive that kind of horizontal excellence across the company.

But the trade-off is that there’s some redundancy, we’ve got some stuff happening in… And we have two apps: a driver app and a rider app. You can imagine a world where there’s one group that develops both apps using the same frameworks and all. We don’t have that; we have two different groups. They develop it using two different frameworks. It’s a pain in the butt sometimes, but you make it work; it’s better that way because you’re close to your customers as opposed to close to your technology. That sounds great until you realize you have lost track of what your customers care about.

Amazon famously organized this way. I can just issue some criticisms of Amazon broadly. I know what those trade-offs are. We talk about the structures on the show all the time. If you look at how Amazon is, they have lots of single-threaded owners of two pizza teams that make their own products. Those products rarely talk to each other. 

As you were describing, you end up in a lot of different… Google, the same way. You end up in a lot of different directions, and suddenly you’re like, “We’ve got to roll out AI across the company,” and you don’t have a common shared framework to do such a thing.

Have you run into this at Lyft? Are you aware of this trade-off? How are you managing that?

Remember when you asked me about my vision for Lyft and I talked a lot about rideshare and a focus on getting people around and making sure that… So I would say a strength that we have is we’re really quite focused on our customers and our use cases.

And so while yes, occasionally those issues crop up, it’s a small thing for us. And also I would say, and this is… I don’t know if this is a good or bad thing, but it just is. I am very involved with product decisions. Very, very involved. Just thinking about the last 24 hours and how I spent my time and product is just… And it’s, again, there are parts of the team that like that, there are parts of the team that find it a little frustrating, but I have no problem saying, “We don’t need to do these three different things; we’re going to do this one thing here, we’re going to do it super well. And that means that these other two teams that thought they were going to get to work on those things, we’re just not going to have that happen. Instead, we’re going to have them focus on something else.”

So I guess a little bit of, to a certain extent, we solve the problem by focusing because we’re focused on one thing and not… Amazon’s focused on many things, but we’re focused on one thing, and then second, I play a pretty big role there in breaking ties and…

That does seem like the way to make this structure work; you need to have the leader who’s just going to show up and break ties all day long. It also seems like scale is the other… that the leader can’t scale. At the same time, if you want to attract great people, you have to give them some autonomy. How do you balance this? What’s the cadence of letting your folks do what they want to do and then showing up and telling them they have to do what you want to do?

I mean, it’s such a classic issue. And so I actually wrote about this last year in the shareholder letter. I wrote about two things: I wrote about stratification, why products tend to get worse, and how we’re pushing things the other direction. And then this topic, which I called Falcon Mode. So the sort of visual that I wanted people to think about is the falcon, which is flying at 2,000 feet and hangs out up in the sky often because they need to see everything. They’re looking for, Where’s my next meal? And they’re pretty good at, even at 2,000 feet, seeing where that next meal is. And then they dive in deep, and they have to get the meal; otherwise, they starve and fall out of the sky. So this coming down and going back up and coming down and going back up, that’s the world that the CEO lives in.

It’s art. And part of it is expectation setting. Part of it is telling my team, “I am going to do this. I am going to talk in excruciating detail about this loyalty program that we’re in the process of developing.” And anyway, that’s going to be where I go Falcon Mode on you, but then I’m going to go way, way up, and I’m going to say, “Now it’s yours,” and you’re going to tell me all the ways where I got it wrong or you’re going to make it better or you’re going to push back or whatever it is. I don’t know. There’s no easy answer here, but I think a lot of it is just maybe being judicious because if you do it…

I’ll say a little bit of an adjacent thing, sorry for going into such detail on this. This is actually a comment that I heard Gavin Newsom of all people say, which I thought was very interesting. He was saying you have two types of power as a leader: you have positional power, and you have moral authority. And the difference is with positional power, the more you use it, the less you have of it. So if you use too much of it, you squander it, right? Because people eventually get tired of being told what to do.

Moral authority is a little different. If you say, for example, in my case, “We’re going to be a customer-obsessed organization, and we’re going to look at everything that lands, and occasionally, I’m going to come in and remind you what that really looks like, but then I’m going to back way off.” The more you use it, the more it creates itself, it reinforces, and people go off and they have their own amazing ideas and stuff. So anyway, that’s the mode I try to get to. You can ask people on my team whether I’m successful or not, but I try to be very, let’s say, deliberate about the balance between the two.

I’m always curious when you end up in that divisional structure, there’s an amount of just re-coordinating that needs to occur, and most tech companies have chosen against it. So it’s fascinating that you’ve chosen this way, and you are very clear that you actually need to do that specific task, because I have so many conversations with… I mean, the number of CEOs who are like, “I don’t do anything,” which is very funny, is very high.

Let me say one little tiny thing about that. So Scott Cook, who I’m sure you know of, the founder of Intuit and still very active on the board, he’s just in the process. I just saw him a couple of nights ago, and he’s someone I’ve known for many years. He was on Amazon’s board in the early days, and we’ve reconnected over the last bit. Anyway, he’s actually writing an article that I think comes out any day in the Harvard Business Review about a study of a couple of companies where he makes the case that the best companies are the ones where the CEO focuses not just on the what, but actually on the how, actually gets involved in the how.

This whole “I don’t do anything as a CEO,” he’s like, “That’s bullshit.” If you’re running a company, you’re doing a lot. And a lot of it is not just the big ideas; it’s how are we actually going to organize? How are we actually going to get this thing done? So I don’t know, I’d be a little skeptical. I don’t know. I think the CEOs are saying that either… I don’t know what that’s all about. But anyway, it’s not who I am. I’ll just say it that way.

I feel like our producers and I could do an entire episode of Decoder just on why we think some people say some of the things they say. Speaking of which, we have a little side bet going on on how you’re going to answer the other Decoder question: how do you make decisions? What’s your framework?

Okay. I mean, the obvious thing, and it really is true, is that I start from the customer and work backwards. I don’t know whether that’s what you were betting, I would say, but that is actually true.

I’ll say maybe a different thing, though, that I haven’t talked about publicly too much. So I guess, okay, I am blessed in the following way: I don’t find making decisions super hard. And what I mean by that is I think there’s a way of… In a sense, all you’re doing as a CEO or any leader is making decisions, in a sense. Like yes, no, hire the right people, fire the wrong people, say yes to the good ideas, say no to the bad ideas. That’s the job. And there are a lot of decisions there. Is it the right person or the wrong person? Do I fire them or keep them? I love them like a brother, but maybe they’re not the right person. All these things. And then is this a good idea that’s going to scale and customers are going to love it, or is it a bad idea that was just dumb in the first place?

Okay, so that’s kind of a framework, I guess, but not really; it’s just an observation about the job. And then I get down one level and say, “Well, I don’t personally mind making decisions a lot, I don’t, but I am aware that every decision takes a certain amount of effort. It does.” And so what I try desperately to do is make the biggest decision I possibly can so that everything else just becomes almost a checklist.

Let me give you a personal example. Years ago, my wife and I sat down, this was back in the early 2000s, and said… We met at Microsoft, and we said, “It’s interesting. At work, we have these multi-year plans, but here we have a family.” We have two daughters, as you and I were talking about before we started. At the time, they were very young, and we said, “What’s our multi-year plan for our family?” And we came basically to the conclusion that we want to live outside the United States at some point. We want to give ourselves and our kids that experience. That was the big decision.

Then there are a bunch of questions about where, when, what schools, and how to get insurance. All these things. But we already made the big decision. And so everything else was just a checklist. And we ended up doing it. A couple of years later, we moved outside the United States. It turned out to be a very, very long and very important thing for our family to do. But I told that very long story to say, I try to hold myself to what are the biggest decisions that can possibly be made, where once that decision is made, everything else becomes just a checklist. And then frankly, I don’t worry a lot about… If things are then on track, I don’t have to worry too much about it, and I can go on and make the next decision.

Okay, we all lost the bet. Congratulations. I think we should send you an award. You are the first ex-Amazon person to ever say something other than that there are type-one and type-two decisions.

Oh, God, yeah. Oh, shit. Oh, yeah, yeah, yeah. I mean, yeah, sure.

Literally in the pre-production, the note was, “He’s from Amazon, he’s going to say there are two one-way doors and two-way doors,” and we were all like, “All right, we’ll just get through it.” You’re the first one ever, the first person who’s ever come within a 100 miles of Amazon headquarters, who did not immediately say one-way doors and two-way doors.

I feel proud. I have my own ideas. Look at that.

Very good!

Let me ask you about some stuff that is changing, that I think you’re going to have to make some decisions about. And honestly, it will stress some of your structure. AI is here, and it’s happening in a lot of ways. Every CEO of a service company, whether that’s TaskRabbit or Uber or whoever has come on the show, I’ve asked this question. I’ve been calling it the DoorDash problem. I should probably get the people from DoorDash on the show to actually ask them directly about this thing that I’ve been calling the DoorDash problem for six months.

But just a couple of days ago, OpenAI had DevDay, and they showed a bunch of integrations where you could ask ChatGPT to go do stuff for you, including booking an Uber. We’ve seen other agentic products. Amazon announced Alexa+, which will be able to book a flight for you and will traverse websites; it’s built into Chrome now. We’re going to traverse websites on your behalf and do stuff for you.

The backend of that, whether it’s you or Zocdoc or whoever else is, well, we have a database of information, we know where all the drivers are. If you want to buy a sandwich, we know where all the sandwiches are. And so your agent’s going to come and order a sandwich on our website, and we won’t get the customer. 

We will just become a service provider to some chatbot interface, and we won’t be able to do upsells. We won’t say, “Hey, there are Dua Lipa tickets,” or whatever we’re going to say, and that’s going to shrink our margins, and we’ll just become commodity service providers. This feels like a very big problem. I’ve been asking everybody about it. Does that feel like a big problem to you?

I mean, maybe for the reasons you just said, but I wouldn’t say it’s one of the top five that I worry about. And a big part of it is, first of all, remember what you’re doing: you’re trusting something. You’re trusting that this thing, this person, is going to come and pick you up, and they’re going to just be on time, and it’s going to be safe. And if I leave my iPhone there, I’m not going to get the thing stolen. All these different things. And it’s physical, it’s safety, and it’s real-world stuff. And so the most extreme version of what you’re saying is I go to ChatGPT and I say, “Please come pick me up.” And some rando comes to pick me up, and there’s no guarantee, there’s no service, there’s no… That would be bad. I don’t think a lot of people would be super excited about just some rando coming, picking me up in an unbranded service, and whatever it is.

So if it’s not going to be an unbranded, just a rando picking me up, then it probably has to be one of the guys who are doing existing rideshare, and that’s us. And then we’ve got all sorts of ways where I think we can compete. So we want to compete on relationships, by the way, not just on transactions. And what does that look like? That [is something] you already mentioned: you choose us, among other reasons, because you get points on your credit card, an unnamed credit card, when you do that. Well, that’s still going to be the case in the future. And so you might have a preference for us that you push through ChatGPT. If they try to disintermediate, you say, “Well, no, I actually have a preference here.” And we’re going to do a whole bunch of different things to make sure that you have a very, very strong preference for asking for us by name, not just saying, “I want to get to a place.” And then second of all, remember that-

Wait, can you tell me what those things are? Because right now on my phone, the apps are side by side, and I open them both, and I will… if it’s within $5, I’ll pick the credit card points, but I will almost always pick the cheaper one. And I feel like an agent going off onto the web and finding the cheapest one is actually the most direct threat to your margins, to everyone’s margins.

So I don’t think it’s a big margin threat because we already price… Let’s talk about price specifically. So you are not alone; quite a few people price shop. Interestingly enough, from my perspective, I wish everybody did. And you’re saying, “Well, that’s weird. Why?” Because remember, I have a 30 percent share, and the other guys have a 70 percent share. And we price almost at parity. In fact, I mean, our strategy is actually to price a little less when we can, but it’s really hard because we have costs. And those are real costs: insurance, driver pay, and all these different things. By the way, the other guys have pretty damn similar costs, which is why our prices are so close like this.

Now, we might have a slightly different strategy; maybe we compete a little harder at airports, maybe they compete a little harder at something else, but it’s marginal. So my point is, why do I say I want everyone to check both? Because if everyone checked both, I’d win probably 55 percent of the time as opposed to 30 percent of the time. So that’s great for me. So let’s just, first of all, let’s just… Step one, I don’t mind that.

That is the margin pressure. If ChatGPT is saying, “Here are the two rates,” and the strategy to win is to always have the lower rate, you will quickly begin competing in a way that, right now, maybe you aren’t competing all the time.

No, no, we are. That’s the thing, we already are. That’s the basic… I think the premise of the question. This is true in some industries where price makes less of a difference, and therefore, if you’re… And nob