Lyft CEO David Risher on partnership with Waymo: 'This is just getting started'

Key Concepts

• Demand Generation: Utilizing Lyft's existing user base (2 million rides a day) to provide Waymo with ride requests, ensuring high utilization of Waymo's self-driving fleet.
• Fleet Management: Handling the operational aspects of maintaining a fleet of vehicles, including charging, cleaning, and maintenance. Lyft leverages its Flex Drive subsidiary for this.
• Customer Obsession: Focusing on creating products and services that customers want, which Lyft believes drives profitable growth.
• Autonomous Vehicles (AVs): Self-driving cars that offer a safe, reliable, and quiet transportation experience.
• Profitable Growth: Achieving growth while maintaining or improving profitability, driven by customer satisfaction and efficient operations.

Partnership Overview: Lyft and Waymo

Lyft and Waymo have formed a partnership based on a "demand generation plus fleet management" construct. The initial market for this partnership is Nashville, with hopes for expansion. The goal is to create a mutually beneficial arrangement that leverages each company's strengths.

Demand Generation

Lyft's role in demand generation involves utilizing its extensive user base and ride-hailing platform to provide Waymo with a consistent stream of ride requests. With 2 million rides per day across North America, Lyft can ensure that Waymo's self-driving cars are consistently in use. The integration into Lyft's marketplace is designed to optimize car allocation for both companies, ensuring demand is met efficiently.

Fleet Management

Lyft's fleet management capabilities are provided through its Flex Drive subsidiary, which manages approximately 15,000 cars at any given time. This includes:

• Charging the vehicles
• Cleaning and maintaining the vehicles
• Tracking vehicle locations and maintenance schedules
• Ensuring vehicle availability (Lyft claims over 90% availability, which is industry-leading)

This aspect of the partnership is presented as unique to Lyft, differentiating it from Waymo's other partnerships, such as the one with Uber.

Differentiation from Uber Partnership

While Waymo has partnerships with other providers like Uber, Lyft emphasizes that its fleet management expertise, through Flex Drive, is a key differentiator. The ability to manage a large fleet of vehicles, ensuring they are maintained, charged, and available, is a significant operational advantage.

Why Waymo Needs Lyft

Despite Waymo's technological capabilities in self-driving technology, Lyft argues that the rideshare business involves significant operational complexities beyond just the app interface. These include:

• Pricing algorithms
• ETA estimation
• Matching riders with appropriate vehicles (standard, extra comfort, black, wait & save)
• Customer service
• Vehicle maintenance

Lyft has invested billions of dollars over 12-13 years to develop these capabilities. Partnering with Lyft allows Waymo to leverage this existing infrastructure and expertise, potentially leading to a more efficient and profitable monetization strategy.

Economic Impact and Profitability

Lyft believes that incorporating autonomous vehicles will positively impact growth and profitability. Markets with autonomous vehicles are experiencing faster growth compared to other markets. Potential cost benefits include:

• Lower insurance costs
• Elimination of driver payments

However, the CEO acknowledges that there are always trade-offs to consider.

Notable Quotes

• "Customer obsession is what drives profitable growth." - David Risher
• "...this demand generation plus fleet management construct." - David Risher
• "...we really like this model and think it sets us up well for not just now but for the future." - David Risher

Technical Terms

• ETA: Estimated Time of Arrival.
• AVs: Autonomous Vehicles (self-driving cars).

Logical Connections

The partnership is presented as a synergistic relationship where Lyft provides the demand and operational expertise, while Waymo provides the self-driving technology. This combination is expected to drive growth and profitability for Lyft, while allowing Waymo to efficiently deploy and monetize its technology.

Synthesis/Conclusion

The Lyft-Waymo partnership aims to combine Waymo's self-driving technology with Lyft's demand generation and fleet management capabilities. Lyft believes this partnership will drive growth and profitability by offering a superior customer experience with autonomous vehicles. The key differentiators for Lyft are its established user base and its expertise in managing a large fleet of vehicles through its Flex Drive subsidiary. The partnership is initially launching in Nashville and is expected to expand to other markets.