Lyft (LYFT) is going through a bit of a transformation as the ride-share company seeks to innovate and keep up with competition like Uber (UBER). Lyft CEO David Risher sits down with Yahoo Finance Anchor Josh Lipton to discuss some of the measures the company is taking, which is centered around the customer and customer experience.

Risher affirms his perspective, choosing not to focus on Lyft's market share: "I actually don't obsess over market share, I obsess over customers. I look at market share and I look at it as an indication of whether our riders and drivers are responding." He continues to discuss growth, prioritizing convincing customers to trade up on experiences through Lyft: "For example, comfort, extra comfort is a new product we have if you want to have a little bit more comfortable ride, newer and quieter car, that's a little bit higher margin."

Risher also comments on Lyft's competitive advantages in its ride-share and delivery space.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

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JOSH LIPTON: Lyft making its way toward bolstering its bottom line as ride growth accelerates each quarter so far this year. Stocks seeing gains of about 6% year-to-date. However, amid the fierce competition in the ride-sharing space, where's Lyft's destination headed to next? Joining me now is Lyft CEO David Risher. David, thank you for being here.

DAVID RISHER: It's great to be here, Josh.

JOSH LIPTON: I thought we just would start kind of high level. So you take the reins early this year. You get to work cost-cutting. It's a focus on innovation, new features. As we roll into 2024, David, what is ahead for Lyft? And all the investors who are watching right now, why should they be excited about Lyft story?

DAVID RISHER: Yeah. So our focus and our thesis is customer obsession drives profitable growth. So you're going to hear me talk about customers over and over again. We have riders and drivers. We just launched something called an online pickup promise, for example. If we are late to pick you up for the airport, we will literally pay you up to $100. And that's enough to actually get an Uber if you actually need it. So it's that sort of innovation really focused on what customers want that's going to drive our growth and our profitability.

JOSH LIPTON: Let me ask some questions, too, David, I know top of mind for investors. One is market share. Where does that stand right now, David? And do you see where you stand right now is stable?

DAVID RISHER: So I mean, the truth is, I'll start with this, I actually don't obsess over market share. I obsess over customers. Now I look at market share. And I look at it as an indication of whether our riders and our drivers are responding. Right now, it bounces around maybe 30%, 31%, 32%, 33%, something like that. It depends a little on the market. When I started, I think it was around 27.

But what I'm really excited about is how much riders and drivers are responding to what we're doing. We just launched Women Plus Connect, which lets riders and drivers who are women connect to each other. That's the sort of stuff, which drives share up, because, if you're a woman want to drive with a driver, you've only got one choice, that's Lyft.

JOSH LIPTON: Got it. Let me ask you another issue, profitability. It looks like Uber now firmly profitable. I think investors, David, want to know when does Lyft hit that milestone? When do you think you hit that bogey? I'm also interested to get your take on long term, what do you think the margins for this business look like?

DAVID RISHER: Yeah. So on profitability, we haven't said publicly yet when that's going to happen. It clearly is a focus. Any successful company has to be profitable. You know, I was just listening to Elon Musk yesterday. And he had an interesting point at the end where he says, look, I sometimes get timing wrong, but I deliver. And that's the way we want to be, we want to deliver. And then we'll tell you about, obviously, when it's going to happen when we're ready.

You asked another question. I forget.

JOSH LIPTON: Long-term margins, how do you think about that?

DAVID RISHER: Yeah. So here's how I think about it. I mean, if you think about it, we have a base product, kind of the Lyft classic product. We pick you up on time. We drop you off on time. We pay drivers well for that product. And the margin there kind of is what it is. I'll just say it that way, like, kind of where we think we're going to be longer term.

What I think starts to grow that margin, though, are when we can get customers to trade up, for example, comfort-- Extra Comfort is a new product we have, if you want to have a little bit more comfortable ride, newer car, quieter car. That's a little bit higher margin.

Our Lyft Media business, which we're just in the early days for. I mean, think of all the different restaurants you go to, think of all the different ways you interact with other businesses while you're in a Lyft, that's a big business for us. But it's now a small, it could be a half $1 billion business someday. So I think that's what's going to drive our margins up.

JOSH LIPTON: Let's also talk about the competition and competitive advantages. If I was to ask Uber what do you think their competitive advantages are, they might say, David, scale, food delivery. They probably mention their international footprint. If I put that question to you, when you think about it, what are Lyft's competitive advantages?

DAVID RISHER: So I think focus is a huge advantage. There, you just said three different things. You talked about international, we're really North American-focused. You talk about food delivery, we're not interested in bringing stuff to you. We're interested in actually getting our riders out of the House and living their best lives that way. We're 100% focused on rideshare. And I think it's a huge deal.

I think how it shows up for riders are things like this guarantee or this promise to pick you up on time, are things like Women Plus Connect. The reason we got there first is because we're obsessing more over our riders and drivers.

JOSH LIPTON: Got it. I was talking to a financial analyst covers Lyft, David. And he's-- listen, he's been in the game a long time, smart guy. And we were talking about Lyft. And he said to me, you know, even as someone who covers Lyft, right, he said, I'm not sure what Lyft's future is. And here's how he put it to me, he said, you know, I don't know, truthfully, whether Lyft looking ahead remains this independent public company or, he says, do they have to actually merge with another company, like a DoorDash he brought up and kind of compete with Uber that way. How do you answer that question?

DAVID RISHER: Yeah. Look, you never say never about those sorts of things, right? But that's not the focus. And listen, I'll tell you why. I think that delivering food to-- if you talk to drivers, for example, and people who do things like DoorDash or even Uber Eats, they tell you, gosh, I don't get paid as much as rideshare. I have to leave my car. I get a ticket sometimes with the restaurant. The restaurant is a little frustrated with me because now their margins are sort of getting squeezed. The end user customers are frustrated because their foods sometimes go cold there.

I'm not saying it's a bad experience, but I'm saying it's not necessarily an experience that I think is the best for our riders. And we're really focused on that.

JOSH LIPTON: Yeah. I'm also always worried when I order, the driver is going to put his hand into my bag. I don't know. It's just a thought.

DAVID RISHER: It's now that you bring it up, I think that's something we should all think about.

JOSH LIPTON: Let me ask you, too, about something else, robotaxis. I'm interested to hear. Obviously, a lot of time and money and effort being put into that technology. Big claims being made. When you think about that tech, David, not just not a year out, but long term, does that pose a potential risk to Lyft looking ahead? How do you think about that?

DAVID RISHER: Yeah. I think it's an opportunity. And I'll tell you why. I think automated self-driving cars are going to come. And some people will tell you two to three years, some people will say three to five years. Some people say five to 10. Almost doesn't matter. It's going to happen.

So then the question becomes, what are we going to do about it? And the answer is we're going to invite them, incorporate them into our network. I mean, look, we have 600 to 700 million rides a year. Those services right now give tens of thousands of rides a month. The scale is completely, completely different. Once we get to the point where you're talking about millions of riders and millions of cars moving around in real time, 24 hours a day, if you're a company that's in the business of creating a self-driving car, you want to partner with a Lyft because we're going to be the network that's going to distribute you and frankly pay back the billions of dollars you spent in R&D. So that's how I think about it.

JOSH LIPTON: And David, I want to get you out of here on this kind of a personal question, because your biography is interesting. Correct me if I'm wrong, but right before Lyft, you actually had a nonprofit. David, and as I read about it, it sort of it was about delivering ebooks to kids-- I'm sorry, making e-books available to kids. What did you-- at a nonprofit, what did you learn there that you put to work now at Lyft as you steer and lead this company?

DAVID RISHER: So I love that question. And I'll give you two answers. The first one is in a non-profit, you're trying to deal with some of the world's biggest problems, in this case, getting kids to read. That was the problem. We got 21 million kids to read and our budget was $10 million a year. So what does that tell you? That tells you that nonprofits have to do huge solve-- huge problems with limited resources. That's helpful in any business, number one.

And number two, leading with purpose. So our purpose at Lyft for drivers help them make more money. For riders, get them out and about. Help them live their best lives at airports, at kids' soccer games, going to see their parents, all the rest. And leading with that kind of purpose, I think, really helps you, frankly, do things that's very difficult to do if all you're thinking about is just how to maximize profits. We want to build a great profitable business, but I want to do it with purpose.

JOSH LIPTON: All right. David, thank you so much for your time today for that insight. I really appreciate it.

DAVID RISHER: Yeah, thanks. Yeah.

JOSH LIPTON: It was a pleasure.

DAVID RISHER: Thank you.

JOSH LIPTON: Of course.

DAVID RISHER: Keep your hands out of the bag, though.