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July 16, 2024

Since the start of the pandemic, Lyft employees have been able to work remotely, log in to video conferences from their homes and, like many other tech workers, have been dispersed across the country. Last year, the company formalized the policy, tell the staff The work will be “completely flexible” and will allow for the subletting of floors in its offices in San Francisco and elsewhere.

no longer. The company’s new chief executive, David Risher, told employees at an all-hands meeting on Friday that they will be required to return to the office at least three days a week starting this fall. It’s one of the first big changes he’s made at the struggling ride-hailing company since taking the job this month, a day after he laid off 26 percent of Lyft’s workforce.

“Things move faster when you’re face to face,” Mr Risher said in an interview. Remote work in the tech industry comes at a cost, leading to isolation and eroding culture, he said. “There is a real sense of satisfaction in solving problems together on a whiteboard.”

The decision, along with layoffs and other changes, marks the beginning of a new chapter for Lyft. It could also be a sign that some tech companies — especially those that are struggling — may be changing the way they think about flexibility in where employees work. The push to work in an office could quickly turn into a requirement, as it has at companies like Disney and Apple.

Organizational psychologist and Stanford professor Bob Sutton said that while in-person collaboration helps with creativity and other work, companies pushing back into the office may be doing so to increase oversight of workers .

“The classic ‘threat-ossification’ effect occurs when top executives feel financial pressure and feel the need to increase their own illusion of control, in addition to the possible benefits in terms of communication, collaboration and creativity,” Mr Sutton said.

Lyft posted worrisome financial results in February after trailing rival Uber in the race to emerge from the pandemic downturn. Its founders, Logan Green and John Zimmer, said the next month they were stepping down.

Mr. Risher, a Microsoft and Amazon veteran who sits on Lyft’s board of directors, has a plan to streamline the business, cut costs and focus on improving the quality and lowering prices of Lyft’s core product: customer rides.

Lyft employees have complained that divisions outside the ride-hailing business, such as renting cars to gig drivers and renting out bicycles and scooters to consumers, appear to be disproportionately affected by layoffs. Mr Risher said the cuts were across the board.

He said the savings from the layoffs would be used to lower prices for passengers and boost earnings for drivers.

The next phase of his plan, he said, is to remind riders that Lyft is a viable alternative to Uber. Mr. Risher said that over the summer, he will gradually roll out products to increase interest in the platform. That could include partnering with companies to provide Lyft rides for commuting employees, he said.

The next step for the company will be difficult. Many Lyft employees have grown accustomed to working from home, and some are already bristling at the possibility of returning to the office. Lyft continues to lag behind Uber, which has a global ride-hailing business that also offers food delivery.

Lyft’s stock is trading at $10 a share, down from its peak of $78, and some have speculated it could be a takeover target. The company, which will report financial results for its latest quarter next week, forecast revenue of $975 million, down from the $1.1 billion investors had hoped for earlier this year. Not yet profitable.

Mr Risher announced some other changes on Thursday. He ended products focused on car rentals, ride-sharing and luxury rides and promoted commercial chief Kristin Svecek to president.

Lyft also plans to tell employees it will reduce their stock grants this year, according to a person familiar with the matter.

Mr Risher said the return-to-office plan would call for staff to be in on Mondays, Wednesdays and Thursdays, with a suggested Tuesday after Labor Day. People will be allowed to work remotely for a month a year, and those who live away from the office will not need to come in.

Mr Rischer said he saw the moment as an opportunity for a “cultural reset, especially in terms of decision-making”.

Lyft’s early ride-hailing business was successful, but Mr. Green and Mr. Zimmer’s idea of ​​building a transportation network, with products focused on scooters, bikes, parking and rental cars, “didn’t really resonate with people,” he said. ” The company has pared those offerings, but still has bikes and scooters.

“So right now, my focus is, ‘Oh my god, there’s a ton of innovation just in ride-sharing.’ People are desperate to get out and live their lives, and we can help them,” Mr Rischer said. “And then maybe, over time, we can rebuild something on top of that.”



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