Lyft Inc. co-founder and President John Zimmer said the company’s focus on transportation will pay off in a recessionary environment, cushioning it from risks of diversifying into food delivery.
Food delivery “seemed like a really good idea in a pandemic,” Mr. Zimmer said at The Wall Street Journal’s Tech Live conference, but “getting a $30 salad is going to be less likely” during a tougher economic environment. Rival Uber Technologies Inc. ‘s bookings exploded during the health crisis, as its food-delivery business benefited from people sheltering in place.
Lyft’s stock has been under pressure for several months. Its share price is down more than 80% since its initial public offering in 2019. Uber’s stock is down more than 30% from its IPO debut the same year.
“We’ve had a few twists and turns,” Mr. Zimmer said, but “I’m confident that, as we get through these recessionary pressures, Wall Street will fix” its pessimism on the stock.
The Lyft president said the company has a “very big opportunity to differentiate over the next few months,” including expanding the business using people’s personal vehicles in the near term and, in the future, by deploying other companies’ autonomous vehicles on its app. Earlier this month, the company began testing a feature that lets people search and reserve parking spots in certain markets.
People look for ways to earn in a recessionary environment, Mr. Zimmer said, and that could bring more drivers to Lyft. Uber and Lyft have struggled with a driver shortage over the past year, an imbalance that has pushed ride prices to record highs.
Mr. Zimmer said he didn’t think a Biden administration proposal to put more gig workers on companies’ payrolls would threaten Lyft’s business model. “In terms of how concerned we are that it impacts our business model, we’re not,” he said.
San Francisco-based Lyft is the biggest financier of an effort to pass a November ballot measure in the state that seeks to tax the wealthiest Californians for some of the costs of transitioning to greener forms of transportation and combat wildfires. Lyft stands to benefit if the proposal is passed because California requires 90% of ride-share miles to be traveled on zero-emission vehicles by 2030.
Opponents of the measure, including California Gov. Gavin Newsom, say no new tax is needed because the state is already investing in similar green measures. The Democrat is featured in a television ad calling it “a cynical scheme devised by a single corporation to funnel state income-tax revenue to their company.”
“I’m surprised by his choice of words,” Mr. Zimmer said. He said that none of the tax money collected would be earmarked for Lyft.