Published - March 28, 2023 @ 3:05 PM (EET)

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Replacing co-founder Logan Green and setting the stage for a potential sale, Lyft Inc. (NASDAQ:LYFT) tapped board member David Risher as its new chief executive officer as the ride-hailing company struggles with competition from rival Uber Technologies Inc. and a battered stock price.

Making a significant and fundamental change, Green, alongside co-founder and current President John Zimmer, will step back from daily operations after more than ten years with the company, Lyft said in a statement on Monday. 

Both company members will remain on the board and transition from their full-time executive management positions as chair and vice chair from April 17 and June 30, respectively.

Risher, a Lyft board member since 2021, previously held management roles at Amazon.com Inc. (NASDAQ:AMZN) and Microsoft Corp. (NASDAQ:MSFT) before starting a childhood-reading nonprofit called Worldreader in 2009.

"Building Lyft with John over the last 16 years has been the adventure of a lifetime," Green said in a statement. 

WHY IT MATTERS

Slow to recover from the pandemic, which caused high prices and long wait times for customers, Lyft has struggled to keep up with its larger rival, Uber Technologies (NYSE:UBER), which now commands 74% of the US ride-share market, up from 62% in early 2020.

According to consumer receipts analyzed by market research firm YipitData, Lyft's market share has fallen from 38% to 26% over the same period.

To cut costs, the San Francisco-based company laid off more than 700 employees late last year and scaled back on other businesses as it looked to weather a possible recession.

Still, shares in Lyft plunged last month after the company forecasted dramatically lower profits in the current quarter, a stark contrast to Uber, which saw ride bookings soar by 31% in the fourth quarter.

NOW WHAT

To boost customer retention, the company has worked to expand Lyft Pink, its subscription product, and partnered with Grubhub, which offers members a complimentary subscription to the food-delivery platform. Last year, the company also launched an advertising unit to tap higher-margin revenue. 

"I am honored to step into the CEO role at such an important moment in the company's history, and I am prepared to take this business to new levels of success," Risher said.

Following the news of the new CEO, Lyft's shares climbed about 3% in extended trading Monday. So far this year, the stock is down about 13% after plunging 74% in 2022.

According to a corporate filing, Risher will receive an annual salary of $725,000 and a signing bonus of $3.25 million.