Lyft, a US ride-hailing company, is preparing for significant job cuts under the leadership of its new CEO, David Risher. Although the exact number of employees affected has not been disclosed, reports indicate that the layoffs could impact around 30 percent of Lyft’s workforce, equivalent to over 4,000 employees, and cut the company’s costs in half. The decision comes just weeks after the CEO announced that Lyft was not for sale, disappointing some investors who had hoped that the departure of the company’s founders would lead to a purchase, which had boosted the stock last month.
Lyft is a company that provides an online social rideshare community platform, offering users access to shared bikes and scooters for shorter rides, first- and last-mile legs of multimodal trips, and information about nearby public transit lines and Lyft Rentals to help plan trips. The company, founded by Marcus Cohn, John Zimmer, Rajat Suri, Matt van Horn, and Logan Green in 2007, is headquartered in San Francisco, California.
Lyft has been facing challenges, including increased competition from rivals such as Uber, regulatory hurdles, and financial pressures. The COVID-19 pandemic has also significantly affected the ride-hailing industry, with ride demand declining as people stayed home and limited their travel due to lockdowns and social distancing measures. In November, the company had let go of 683 employees, or 13 percent of its workforce.
Uber and Lyft have been in a struggle for market dominance after the epidemic lows. Investors are concerned that Lyft’s price cuts to avoid being a distant second in the North American ride-sharing industry could impede its profitability. Lyft’s stock has declined approximately 11 percent this year, compared to Uber’s price increase of 27.5 percent. Uber’s global footprint and more diverse industries provide it with an advantage over US-focused Lyft, according to the most recent company report.
The job cuts at Lyft are in line with the broader trend of cost-cutting measures in the ride-hailing industry, as companies face increasing pressures to demonstrate profitability and sustainable growth. Many ride-hailing companies are exploring various strategies, including reducing the workforce, optimizing operations, and diversifying revenue streams to navigate the challenges in the industry and improve their financial performance.
To address the challenge of safety post-COVID, many ride-hailing companies like Lyft and Uber have also introduced safety measures to gain customers’ trust amid rising urban mobility and declining car ownership. FATbit Technologies reported on these measures.
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