How I Built This with Guy Raz - Lyft's John Zimmer At The HIBT Summit

Episode Date: November 29, 2018

Next up in our series of episodes from the How I Built This Summit: John Zimmer, co-founder of Lyft. John sat down with Guy Raz in front of a live audience in San Francisco last month to talk about Lyft's visions for the future of transportation – and their fierce competition with Uber. Coming up next month: three more episodes from the Summit – so keep checking your podcast feed every Thursday.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. Hey, everyone, it's Guy here. So today we have another bonus episode from the How I Built This Summit in San Francisco that happened back in October. It's from my live interview with John Zimmer, the co-founder of Lyft. And my original conversation with John ran back in February of last year. And if you haven't heard it, you may want to check it out.

Because in it, John tells the story of how he launched his first ride-sharing service in college and how he and his co-founder, Logan Green, went on to build one of the biggest ride-hailing apps in the world. And I say one of the biggest, of course, because, well, there's Uber. And it's no secret that those two companies, they have been in a fierce competition pretty, pretty much since they launched. It's a rivalry that's up there with, you know, Coke and Pepsi or McDonald's and Burger King. And that competition and how it's affected Lyft

is one of the things I wanted to ask John about when we sat down to talk at Yerba Buena Center for the Arts in San Francisco. How you doing? Good. Yeah? Did you guys hear his episode? One of our earlier episodes.

Really amazing story. Just like curiosity, on a given day, and you might not be able to say the exact numbers, but roughly, on a given day, how many people use Lyft? So every month we do over 50 million rides. Wow, it's amazing. I mean, this thing,

let's just start with this idea, because when you started this idea, when you came up with this idea for Lyft, did you guys think of this as a simple idea? Yeah, in a sense, when Lyft started, we had a tagline that was your friend with a car. It was that simple. There are 250 million vehicles,

in the United States, I believe, and they're used, each car is used 4% of the time. 96% of the time it's parked. So the simple idea was, you know, you know that time where you had a friend with a car that got you where you needed to go, what if we could utilize these cars more? We could offer new job opportunities for those that needed it and flexibility. If you think about a single parent who can't work on 9 to 5, having the timing flexibility was large. And so that was the simple idea. let's create your friend with a car at a community level,

and that's how it began. Was it, I mean, how much of it was driven by this sense of, we want to kind of recreate our relationship with automobiles, the sort of idealistic notion, and how much of it was we want to completely disrupt an industry? I never thought about disrupting an industry. We knew that was possible. We were aware of, you know, in the early days in San Francisco when we started,

I sat down with the general managers of the three major taxi companies because I wanted to understand their perspective. And I wanted to make sure that the work we were doing had a net positive benefit on society. So I think disruption was something that became part of the equation but wasn't the reason why we began. All right, let's talk about the competition. Pretty soon after your launch, Uber kind of stepped into your territory with...

At that time, Uber was a premium black. car service. And once Lyft got traction, Uber launched Uber X pretty soon after, and I want to talk more about that because in some ways the story of Lyft, certainly the early story of Lyft, is partly about your competition with Uber. Back when that happened, because they were bigger than you and still are a little bit today, how worried were you about that competition? We were quite worried. We started knowing what we were entering into. So we knew we were the underdogs from day of one. We did that, you know, with our eyes open. We knew what we were taking on, whether it was Uber, the taxi industry, a small company with, you know, six years ago, maybe even five years ago,

we were about 30 people. How many people are you now? Almost 5,000. Five years ago, you had 30 people. You have 5,000 today. Yeah. So yeah, we knew what we were getting into and definitely that was concerning at times. But, I mean, this became almost like a blood sport. for some time, right? This competition between Uber and Lyft, and it was really, I mean, Uber wanted to crush you guys. How did you deal with that? Like, how did you deal with that just from a, you know, a stress level?

It was very hard. I have an amazing co-founder, Logan Green, who's a, who, we didn't know each other before we started working together. There's a lot of stories of friends who start things together. We started something together and became friends. I have a great wife who is very supportive, but it was very difficult. We woke up one day, it was about four or five years ago,

and Uber has raised $3 billion, and we had $100 million left in the bank, which is a lot of money, but only a few more months left, and now you have this crazy competitor who wants to kill you. That was definitely tough, but I think we stayed focused on our values. We stayed focused on our vision and our mission,

and just put our heads down and executed and tried our best not to get distracted. A lot of people here are building ideas that will inevitably attract copycats, inevitably attract competitors, even brutal competitors. What have you learned about your competition with Uber that might help someone figure out

how to deal with their own competitors? Yeah, so if you think back five years ago, everyone said we were dead. Right. I mean, if you look at the odds, $3 billion, a strong competitor, network effects as part of the business, but values do matter. Treating people well does matter, and having a mission that you focus on and care about more deeply than someone else in the end really matters. So I would just say focus on what you can control, and there are good forces at play.

And how did the dynamic between you and Logan work? Like how did you, when it's sounds like what you're saying is he was kind of the steady, you know, calm force and you were sort of a little bit freaking out. You were like the freak out person? I think in simplistic terms, that's reasonable. I'm more emotional. He's more logical. But I think it's fair to say there were moments where we both freaked out. Did you ever think that, I mean, you said people thought we were going to be crushed, we were going to be finished. Did a part of you ever, worry that that might happen? Yeah.

How, I mean, really? Like, you thought you have sleepless nights like this? We might not be around. Yeah, of course. Were vultures circling around? It felt like it. You know, and you go to work every day and you want to rally the troops and you talk to whether it's reporters or investors.

And one of the big things people were saying was that, like, Uber is so aggressive, you guys are nice. And it was like, like, sorry. We're trying to treat people. well, and we are aggressively pursuing our mission. But, you know, we entered, as I said, we knew what we were getting ourselves into, and we took it on. Uber is a good product. Lift is a good product. They do things really well. You guys do things really well. I'm curious how that competition has actually made Lyft better. Yeah, it's a great point. The competition has

absolutely created more urgency, more focus, more prioritization. You know, we started tipping for drivers. We started rental cars that were completely flexible on a weekly basis for drivers. We started this idea of treating drivers well, which is shocking that it's an idea and not obvious. And so I think in this case, competition has been a good thing. All right, so this is a tricky question, but I'm going to, I'm going to have to you this anyway, which is when Uber ran into so many problems, we know what those were, many, of course, of their own making, culminating in the resignation of the founder, was there

some, I don't know, some schadenfreude on your part? Did you guys kind of feel like, feel like what? Did you, I mean, did you sort of feel like, well, you know? I mean, I can't say I was disappointed. But we were very careful. about how we behaved, because it was a really critical moment. You know, all eyes were on the industry, were on us, and there were a lot of people that were hurt by what happened, both internally at our competitor, externally. And so we told our team, this is not a time to gloat,

and we mean that, and we meant that. You know, why would we celebrate someone else's pain? And if our goal is to improve people's lives with the world's best transportation and to serve our drivers and passengers, this doesn't affect us doing that. So here's what's interesting about your, I mean, not only is this a complex and regulated,

highly regulated industry, but the technology is changing so fast, right? Like, in 10 years, we might not even be driving cars at all, maybe 20 years, right? So how do you think about your business model and how it might evolve over time? So there will be a portfolio of options that we offer you to say a subscription.

We want to offer you transportation as a service. Instead of spending $9,000 a year to own and operate your vehicle, we want to sell you maybe it's $500 a month subscription plan. Similar to how you buy minutes, you'll buy 1,000 miles. And you'll get access to our bikes and scooters.

You'll get access to transit through the partnerships we have with local governments. You'll get access to rides. That is what we're doing. As technology changes, as we had bikes and scooters, it becomes part of that. As we look to autonomous vehicles, it's not the be-all-end all.

It's part of providing that transportation to our customer. In an earlier interview, I asked Jen Hyman about her business, rent the runway, and she described how it was fully formed right at the beginning when she was in business school, that she had this vision for a closet in the cloud, but that she just introduced a part of that company at the beginning, the high-end ball gown rental company. But ultimately, she knew that she wanted to create a company where, you could buy, you could get all your clothes.

What you're talking about now, where you're paying a monthly subscription fee, and you've access to all these things, and driverless cars, like, were you thinking about that, you know, seven, eight years ago, or is Lyft, what Lyft is today, was that the vision? I think somewhere in between. But when we started, again, the vision is like at the city level.

If you look outside and walk around, you see cars, you see pavement, and you see parking spots. that sucks. And another thing you see is people staring down at their phone or driving alone in their car. And we don't like that. And so we're trying to solve what we think is a big part of the design problem.

And so we did have that vision to eventually get into other forms of transportation. I remember thinking in college of some type of automated service that would just be way more efficient and allow you to have less infrastructure, but there are parts of it that are definitely. they knew as well. So I want to go back to the theme of scaling because it's 2018 now. And really

four years ago, you were a fraction of what you are today. I mean, you were a tiny company comparatively. April 24th, 2014, on that one single day, you launched in 24 cities simultaneously. A huge, insane launch. How did you manage that growth and that scale? Yeah, it's been a, it's been a constant balance, I think, for us about picking our areas of focus. We've chosen to be careful about international launches. We've chosen not to go into food delivery. But we did think having coverage in the United States for every American is a critical factor. If we want to replace car ownership as the best way for you to get around, if we want to be, you know, have transit, lift, bikes and scooters all on one app, having coverage first in the United States for

for a car that was as convenient as a car parked in your driveway, coverage was important. If you hear the podcast, you talk a lot about how your sort of commitment to the environment and your interest in the environment really kind of motivated this initially, this idea initially. But as with any new technology, there are unintended consequences. And even with Lyft there are, even with Uber there are, right? You've seen studies that have shown that in some cities there's an increase in traffic,

Some people say you go to airports as an increase in traffic because of ride sharing drivers. Is that something that you think about? Do you ever think that's not what we intended to do? Yeah, yeah. We're definitely, our goal is to get rid of traffic.

So when there are cases that we are adding to it, that is not good, and that's something that we do think a lot about. Is there a solution to it? Yeah. Congestion pricing is the best solution. Getting more investment in public transportation, is another solution. And those two things can be directly tied together. So we may be an unlikely,

people might not expect it, but I think we'll become more vocal about our advocacy for both of those things. You could imagine a future where to drive into a city at a certain time, you have to pay, like in London, you have to pay a fee to go into the city? Yeah, you need to have that, in order for there to be equity, you need to have a free option for those that can't afford it. We have that in the East Bay called the carpooling. And we, We now have products like our shared ride service that can make it easier for people to connect and get into that carpooling or just the casual carpooling lines that exist and have existed for many years that actually work quite well.

So I do think ultimately, if we as a society want to get rid of traffic, we need to all create a new system. Right. I know I want to shift for in our final moments because I know a lot of people think that when they launch a business, they really think of the what, you know, what is it that I'm trying to create. We've talked about this before, and I've heard you talk about the why, that the why of what you're launching is much more important than the what. So what do you mean by that? Yeah. So there's some revisionist history that I now like to say the why in Lyft is because

the why behind our work is way more important than the what. That has always been true that the why has been important. The reason is like in today's society we can, there's so many things we can make. Technology is incredible. We can have these computers in our hand that everyone can have, but why? Why are we doing this? So I think there's too much focus on the next, often in technology, you have the next phone release. And I think there needs to be a much, much more push from all angles on people thinking about why are we doing this. And if we all were to agree on like principles of what's important, principles around, you know, for us, equity, sustainability, economic mobility,

then are what would be better informed. John, and I love this question. I love asking people at your point in your career of this question. If you were sitting in this audience 10 years ago watching somebody like you up here, what do you wish you would have known that would have been helpful to you

as you were growing and creating your business? Well, first, five years ago, I very much could have been in the audience. Five years ago. Yeah, so you can accomplish a lot, in a short amount of time, and the thing that's been cemented in our minds is just having a core set of values and a mission that drives you is the thing that matters most. And so is that how you thought of it, even 10 years ago?

Yeah, I think so. I mean, I think in our society, you know, in the United States, for the most part, we're extremely fortunate that there are a lot of job opportunities. And if you do have a choice. Not everyone does. But if you have a choice and you can do something you're passionate about with the majority of your time, or you can do something you don't like doing, like, you know, again, if you're lucky and fortunate to have the choice, then you should do what you're passionate about. So do you think people are going to be driving cars in 20 years? Just curious. In major urban environments, I do not think so. I think maybe we'll go to amusement parks to do that. Wow. In 20 years? Incredible.

John Zimmer, founder of Lyft, John, thank you so much. Thank you. John Zimmer joined me live on stage at the How I Built This Summit, which happened last month at the Erba Buena Center for the Arts in San Francisco. And over the next month, we're going to be posting three more bonus interviews from the summit next Thursday. It's my conversation with Joe Gebia of Airbnb. Oh, and if you want to hear more from Summit speakers, check out a new video with Cheryl Conti, CEO of Do Big Things. Today. Cheryl talks about overcoming the imposter syndrome and other anxieties that come with starting a business.

You can find that video on the How I Built This Facebook page. And thanks for listening to today's bonus episode. It was produced by Rachel Fockner with music composed by Rumteen Arablewee. I'm Guy Raz, and you've been listening to a bonus episode of How I Built This from NPR. Life Kit is like your friend with really good advice. So, can I really be true for? Yeah. It's just me and you, right? Well, sure, let's say it is.

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