tv Bloombergs Studio 1.0 Bloomberg December 25, 2018 10:00pm-10:31pm EST
>> 11:00 a.m. in singapore. said theres have will be a cut that year and policy becoming more obvious. however, the cut in rates would be unlikely. use the bank will probably a lending facility again if it works well. >> chinese leaders are starting a vow to helpg the private sector. the move to support sales comes as costs rise and authorities want to produce risk in the
financial sector without hedging growth. the bank of korea says it is keeping its 2% inflation target for the future even if indication is out of reach grade inflation hits 2% in november. the government said this week that the economy will grow this year and next at the slowest rate since 2012. south korean officials are having a groundbreaking ceremony. survey,low a joint although any progress is expected to take decades. the project was agreed by kim jong-un, but cannot make much headway. a number of people now known to
have died in the indonesian tsunami has top 400. the giant waves are thought to a volcano thatof has been a rough in for days previously. europe's biggest volcano continues to have ash and love the. mount etna has been increasingly active since july. it is closed for a while since an island north of sicily also showing signs of volcanic activity in recent days. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries.
taking a look at the asian markets, here is how it is looking for china. it is down by 1/10 of 1%. ♪ >> it is the underdog in the race for ride-hailing domination, but that race is far from over. john zimmer started sharing his car in college, and that casual carpool business lit the spark that has become lyft. they now find themselves in one of the most competitive and sometimes dirty tech battles in history, but uber's struggles have only kicked lyft into overdrive. lyft says it has 50% share in some markets and working on the rest. joining me today on "bloomberg studio 1.0," lyft cofounder and president john zimmer.
♪ emily: growing up john zimmer. you grew up in greenwich, connecticut, which always sounds quintessential. what kind of kid were you? tell me about your upbringing? john: i loved playing sports, mostly soccer. i wanted to be a magician when i was a kid. i love making people happy with surprise and delight, but my first job was in a hotel. i worked in a hyatt. i convinced the general manager. he said we can't give you a job because you are under 18. i said i am interested and passionate about hospitality, so he put me far behind the front desk in this oversized suit answering the phone. i saw as a phone operator that i could impact someone's day in a meaningful way. so if someone had a light in the room that was broken, i would talk to engineering, have it fixed, follow-up, and if i hear kids in the background, send milk and cookies to turn it into a positive experience. i loved that.
it ended up with me going to study hospitality at cornell. emily: what did you learn about the customer from that experience? often when you are getting the call someone is not happy. john: i learned to put myself in the shoes of the customer, be genuinely empathetic. to understand where they are coming from. this person paid a lot of money to have this relaxing time with their family, so people for the most part are reasonable and rational, so when you show and demonstrate you are listening and do something about it, you can make a meaningful difference. emily: you are majoring in hospitality at cornell and offering rides home to your friends. john: yes, even freshman year, in my college dorm. it was so ridiculous to me that there was not an easy way to find everyone else going to new york or connecticut to go home, so i would talk to people and try to fill the seats. emily: for money? john: sometimes.
mostly one person would drive sometimes and the other person would drive the other. eventually when we first turn the product into a business, we would charge for those seats. it just seemed so obvious. someone had to pay for gas. 20 or more people were driving to the same location. it could be more fun to meet new people, talk to your friends, and cheaper for everyone. emily: now you did not dive right in because you became an analyst at lehman brothers. you left three months before lehman brothers disappeared, essentially. why did you leave? john: i wanted to save some money to make it easier to take a risk with no salary for many years, which is what we ended up doing. i went to manhattan, worked at lehman brothers in real estate, and had a two-year education in more than just finance.
actually in company culture, the good and bad, company success, the good and bad, and i saw it going from being successful when i entered to disappearing. that was a powerful lesson for me, to never be sure that something is a sure thing. actually when i was leaving, my best friend's mother who worked in the building said how could you leave like a sure thing like lehman brothers to start a silly carpool start up? that was my message on the way out and a reminder that nothing is a sure thing. emily: lyft was founded in 2006 while you are at lehman brothers at the time. how did that start? john: i was on facebook and a mutual friend was connecting logan and i. basically, logan posted he was starting to build a website after he took a trip and saw people sharing rides out of necessity. i've reached out to the mutual friend, and logan came to new york, and we were both extremely passionate about this idea of building a new form of transportation that would change
the way we lived in our cities. emily: walk me through the early days. this was before uber, before this was a thing. john: we started working in an office on university avenue actually in palo alto that was not earthquake safe, so we got cheap rent and they suggested we wear hardhats. we did not do that, although we should have, and it was like a closet, but we were feeling so excited. there was two of us. we hired our first engineer, so we were three, and we were building university carpooling software. we ended up selling that to universities for annual subscription. we eventually moved into an
apartment which we called our apart-fice, then i upgraded to one of my friends' parents house, and then i looked at logan and said, how are we doing? our mission is to improve people's lives with transportation. we are only scratching the surface with this university carpooling program. we said, what if we could get people using those cars they only use 4% of the time, have an earning opportunity, and to save others money versus car ownership? that was the impetus for what we've were first thinking of, called zimride instant, and luckily we changed it to lyft. emily: by this point uber did exist. john: yep. emily: i'm curious what opportunity you saw uber was not going after. you started off with a different culture. pink mustache, the fist bump, the "we are all friends here." how does that come about? john: uber launches in 2010, and their tagline was "everybody's private driver." they were doing limousines and black cars. this served 1% of the population for a luxury need. that wasn't interesting to us. we wanted to create an alternative to car ownership, a
service that empowered people to earn money and also empowered people to get around at scale, but back then unless the car was yellow or black, people were not getting into it because as a society it was normal to get into those color cars. there wasn't a regulatory framework or societal acceptance around getting into someone's personal vehicle, so by saying lyft is your friend with the car, suggesting people sit up front, we had to change behavior. that was a behavior people were used to in college. you are riding with your friend with a car. emily: i still remember you and logan coming on the show in the early days and bringing the pink mustache and putting the pink mustache on the table. when you think about that, is it like, oh my god, i can't believe i wore birkenstocks in high school? is there a soft spot there? john: we embrace our past. i didn't ever wear birkenstocks. there was this fun, rebellious tone to what we were doing. but doing it in a way that we always believed we were on the right side of history, and we
were doing it with safety first. we actually established the regulatory framework internally before the regulations. those ended up being adopted by california, but we had more strict criminal background checks -- still do -- criminal background checks than taxis or limousines. we have a mentor program where we would meet, logan and i would meet every single driver, and so we were taking public safety extremely seriously, while at the same time having to change behavior and introduce something new. we said, let's have fun with it. the pink mustache was designed to be a tactic to get people to smile, set the tone, and it lasted for a year and a half. emily: talk to me about how your relationship with logan has evolved, and how you as leaders have evolved. i understand you still carpool
to work together every day? why? john: well, logan is my best friend. a lot of times entrepreneurs are friends and start working together. we did not know each other when we started working together. and i think, like any relationship, we had to work at it. our communication styles are very different. logan likes to focus on the product and the technology. i like to focus on the hospitality and humanity part of the business, and that is a perfect and needed complement to what we are trying to build, so we lived near each other. he was the best man at my wedding. we have conflicts, but those are healthy and allow us to see different perspectives. ♪ john: there are $2 trillion spent every year in the u.s. alone on car ownership. i believe that will fundamentally shift to transportation as a service. ♪
♪ emily: lyft is now valued at $11 billion. you have raised more than $4 billion. you surpassed 500 million rides. where are you in terms of growth? john: last year we did 400 million rides, grew 2.3x, or brought our market share from low teens to a third of the a market that lyft has. we have markets with over 50% you are market share for the first time in history, so there is an incredible amount of momentum behind what we are doing at lyft. i would say we are just getting started. lyft and uber combined do half of the miles traveled in the united states. i believe over the next 5-10 years that this .5% will grow significantly to the point where eventually the majority of miles traveled in the united states will be on a network like lyft, and you will be subscribing to a lyft transportation plan, similar to how you have a music
subsciption plan, maybe spotify, or a minutes plan like you have on at&t or verizon. emily: the last years have been very transformational for lyft and we have a shift in the balance of power between lyft and uber. in 2016, when maybe it felt like uber would be the dominant ridesharing company forever, what did that feel like? what does it feel like today? john: i take it back 3-4 years now. uber raises $3 billion. we have what i believe is a lot of money, $100 million in the bank. they have 30 times the capital and they are trying to destroy our business using that money, and that was, to be blunt, it was scary. someone attacking the business, incentivizing drivers not to drive on our platform, while the team had such drive and such passion, and we were smart about the tactics we used that were asymmetrical, and we rose up and that was the time we had maybe
even single-digit market share, and we've raise the capital and built an incredible team. by coming up as the underdog, but with the vision, i would say the leaders vision, we have been able to build a team that is not just doing it for a monetary reason, and not doing it just to win, although we intend to win, and something that drives us to be competitive, but a team that is value driven and mission driven. ultimately, that is why we will win. emily: i often look at it like a male and female perspective, and female-led companies get 2% of overall funding, but there are often other biases that exist as well. john: yeah, i think for a while investors and others looked at us like, oh, you guys are nice. we said, ok. we believe it is important to treat people well, not just because it is the right thing to do, but it is great for business, and now we are seeing that play out.
emily: so, being nice was to your detriment? john: in the early days people understood it as a weakness. we are aggressive, but in our own way. we are aggressively working to treat people right, highly competitive, taking market share from competitors, so that is working. i think what is happening in silicon valley and more broadly is positive in that they are looking for other models of success and other factors, not just an outgoing form of overconfidence. emily: do you think silicon valley has rewarded the wrong kind of confidence, the wrong kind of arrogance? john: i would say more broadly, not just pointing at silicon valley, but across the country, historically, yes, absolutely. emily: 2017 was very transformational for lyft in part because of what happened at uber. we saw the delete uber campaign, susan fowler's blog post that went viral, ultimately travis kalanick the ceo was ousted.
how did that particular sequence of events impact your company? john: yeah, i mean, it definitely impacted us, but we have had so many moments as a company, both competitively and internally, that have been difficult over the five years of running lyft, and the muscle we have developed is to focus on our drivers and our passengers, because we can't control things that are happening outside of lyft, so that muscle that again took years to develop, and in the early days we were distracted by the competition, paid off, because we put our heads down and said we need to continue to serve our drivers and passengers better than anyone else, and let's move to offense. the delete uber movement you talked about, the ability to have enough drivers at a moment when demand increases is difficult to do market by
market, so our team did a fantastic job during those moments, but we had been working hard with our heads down for a while. emily: any way to quantify how many drivers and riders you gained as a result of anti-uber sentiment? john: i think there was a 20% rise in the business. in one week alone. so, that was real. we held onto that and continue to make market share throughout the year. emily: as i understand, the market share in the u.s. is 25% lyft and 75% uber. what do you think it is? john: we have good reason to believe it is about 33% or 34% lyft. the goal is to get over 50%. we do have markets with over 50%. we do have a playbook. we know how to get there. if you focus on the west coast, we have in some cases over 40% market share as a whole, and so we just need a little bit more time.
emily: now that uber has new leadership, are customers going back to uber that had chosen lyft? john: we are not seeing that. emily: lyft says it is available in 95% of the united states, but there are some areas where it is difficult. explain that. john: 90% availability means you open the app and we have an option for you. in some rural areas that may be a scheduled option. if you open the app and there is not a driver within a few minutes of you, we will fall back and say, hey, do want to schedule a ride 30 minutes, 45 minutes, or an hour from now? emily: you launched in your first international city last year, toronto. how is that going? john: it is going well. it was a big undertaking for the team to be ready for toronto. new currency implications. we are happy with the launch and will continue to scale out in
canada. emily: uber expanded to china, india, russia, and europe. why has it taken you so long? john: focus. as the underdog, focus is extremely important. now we are on offense, so we are starting to look at international opportunities, but we don't need to build a massive international business to have one of the largest companies in history. there is $2 trillion spent every year in the u.s. alone on car ownership. i believe that will fundamentally shift to transportation as a service, so by focusing on not just the u.s., but personal transportation, not food or logistics and other things, by focusing on what i believe to be the largest market opportunity in the world right now, we can build a fantastic business. ♪ john: we need to replace car ownership. whether or not it costs a lot to do the r&d, it is ultimately
recruiting? john: we have historically, and need to continue, to treat drivers better than any other and company. that is not a feature or action. one that is a collection of features or actions. it took our competitor many years to launch with tips the way we did. there was a study that showed lyft drivers are more happy with lyft than uber drivers, but they say they earn more. emily: you are also pushing into driverless cars. when did you start researching autonomous cars, and how did you decide this is something that you wanted to pursue? john: it was several years ago that we decided we knew this is where things were headed, and the most important thing to
customers -- if i am spending $9,000 a year owning and operating a vehicle, how can i spend $7,000, $8,000, $6,000 to get a better service? that is what we are working towards. we are working on lyft where you get multiple people going the same way. the other is autonomous. we are at .5% of miles traveled on lyft and uber, so there is a lot of scaling and change to come. emily: there are two reasons not to build driverless cars. one, it is expensive, and two, it can alienate drivers who worry that their jobs will be replaced, so why pursue this? john: we want to design our cities around people, not cars come so we need to replace car ownership. whether it costs a lot to do the r&d, it is ultimately where the business is going. on the driver side, i don't believe there will be less opportunities for drivers on our platform as we continue to scale. emily: why not? john: if you scale to 80% of miles traveled on lyft and uber in the future, and just 5% of those 80% are in human driven cars, you have, what is that?
4%, which is eight times the number of drivers we would need today. emily: ok, five years from now, 10 years from now, what do the roads look like? john: let's say 10 plus years from now, i believe cities will start to divide where certain forms of transportation travel within a city, and so pedestrians, bikes, they should have a very safe, separate area to get around in the city than say autonomous and human-driven vehicles. that is how i believe our cities will function in the future. it will make our cities more walkable and enjoyable. it will change real estate values.
you will get parking lots that walkman -- turn into parks or housing, so the changes we see in 10 years will be the largest physical infrastructure changes we have witnessed in our life. emily: when it comes to lyft building its own driverless technology, you are clearly behind. what will it take to make that happen? john: we are honest with the team and ourselves that we are coming from behind. just as we did with the original business and taking market share from uber, we are making up ground every day. there is also not just the data advantage we have, but starting now, sometimes in certain industries there is a second mover advantage. there are a lot of technologies that did not exist five years
ago when others were starting their autonomous efforts that exist today that allow us to leapfrog. emily: we know over time during the lifecycle, you considered selling the company. i am curious when did you most seriously consider selling the company? john: as we said, lyft is never for sale. if someone comes in with an offer, we have a responsibility to our board to look at it. emily: do you think lyft will remain an independent business? john: our plan is to build an independent business that is eventually a public company. emily: you said you were on track to be profitable this year, are you still on track this year? john: we are moving towards profitability, but given how much money we have raised, our focus is on growth. we would actually be doing a disservice to investors if we were not using the capital efficiently to build the largest long-term business. emily: so does that mean you won't be profitable this year? john: not the focus right now. emily: uber set a goal of going public by 2019. how does that compare to your goals? john: the advantag is we are not talking about our timing. if that is their timing, great,
helpful to know, but we have the flexibility given the cap we have and that we have not made any commitments publicly or to our investors that we will do it at the right time for the business. emily: is lyft a public company some day? john: i believe so. emily: what is your advice for the founders of tomorrow? john: i think every company is a tech company. what technology does is it allows you to have a big impact, and with that comes a big responsibility. and what i am so proud of and so happy about is that we are able to build and scale what can be one of the biggest businesses ever built with a positive impact on society. we are out to prove that, that you can take care of people, make our cities better places to live in, and you can build a big business, and i think future entrepreneurs will continue to do that. ♪ emily: all right, john zimmer co-founder of lyft and president, thank you for joining us today. ♪
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