Since the start of the pandemic, Lyft employees have been able to work remotely, log into video conferences from home and spread across the country like many other tech workers. Last year, the company made that policy official, telling staff that work would be “fully flexible” and subletting floors of its offices in San Francisco and elsewhere.
No longer. On Friday, David Risher, the company’s new CEO, told employees in an all-hands meeting that they should come to the office at least three days a week starting this fall. It was one of the first major changes he’s made at the struggling ride-hailing company since the beginning of this month, and it came just a day after he laid off 26 percent of Lyft’s workforce.
“Things just go faster when you’re face to face,” said Mr. Risher in an interview. Remote work in the tech industry, he said, came with a price tag, leading to isolation and eroding culture. “There’s a real sense of accomplishment when you’re working on a problem together on a whiteboard.”
The decision, combined with the layoffs and other changes, heralds the beginning of a new chapter at Lyft. It could also be an indication that some tech companies, particularly those that are struggling, are changing their minds about flexibility with respect to where employees work. Nudges for working in the office can quickly turn into demands, as with companies like Disney and Apple.
Bob Sutton, an organizational psychologist and professor at Stanford, said that while face-to-face collaboration can help with creativity and some other aspects of work, companies pushing for a return to the office may be doing so to have more oversight of their employees.
“When top executives feel financial stress, the classic ‘threat rigidity’ effect kicks in, and beyond potential benefits for communication, collaboration and creativity, they feel compelled to increase their own illusion of control,” Mr Sutton said.
After Lyft fell behind its rival Uber in the race to get out of the pandemic doldrums, Lyft posted worrying financial results in February. The founders, Logan Green and John Zimmer, said the following month they would step down.
Mr. Risher, a veteran of Microsoft and Amazon who also served on Lyft’s board of directors, has outlined a plan to streamline the company, cut costs and focus on improving quality and reducing costs. price of Lyft’s core product: rides for customers.
Lyft employees have complained that divisions outside the ride-hailing business, such as units that offer rental cars to their gig drivers and rent bicycles and scooters to consumers, were disproportionately affected by the layoffs. Mr. Risher said the cuts were across the board.
He said the cost savings from the layoffs would go towards lower prices for drivers and higher revenues for drivers.
The next phase of his plan, he said, is to remind riders that Lyft is a viable alternative to Uber. Over the summer, Mr. Risher said, he will gradually introduce products to increase interest in the platform. That could include working with companies to offer Lyft rides to their employees who commute to the office, he said.
The next steps for the company will be difficult. Many Lyft employees have gotten used to working from home, and some are already eager to return to the office. Lyft continues to follow Uber, which has a global ride-hailing business and also offers food delivery.
Lyft’s stock price is trading at $10 a share, down from $78 at its peak, and some have speculated it could be an acquisition target. The company will report financial results for its most recent quarter next week and expects revenue of $975 million, lower than the $1.1 billion investors had hoped for earlier this year. It’s not profitable yet.
Mr Risher announced a handful of other changes on Thursday. He discontinued products focused on car rentals, rideshares, and luxury rides, and promoted Kristin Sverchek, corporate affairs chief, to president.
Lyft also planned to tell employees it would cut their stock exchanges this year, according to a person familiar with the decision.
The return to the office plan, said Mr. Risher, would require workers to come Monday, Wednesday, and Thursday, with Tuesday recommended starting after Labor Day. People are allowed to work remotely for one month each year, and those who live far from the office are not required to enter.
Mr Risher said he saw the moment as an opportunity to undergo a “cultural reset, particularly in terms of decision-making”.
He said Lyft was successful with its early ride-hailing business, but that Mr. Green and Mr. Zimmer’s idea of building a transportation network, with products focused on scooters, bicycles, parking and rental cars, “didn’t really resonated with people.” The company has reduced that offering, but still has bikes and scooters.
“So right now my focus is to say, ‘Gosh, there’s still a huge amount of innovation left in ride sharing alone.’ People are desperate to get out and live their lives, and we can help them,” Mr Risher said. “And maybe over time we can build some more stuff on top of that.”
