Lyft's Masterclass in Crisis Recovery

What’s the deal: Lyft (Nasdaq: LYFT) announced their Q4 and full-year 2023 earnings on February 13, and what initially looked like an epic mistake turned into a masterclass on how to deal with a #crisis.

What they got right in their comms: Mistakes happen, but most of the time, they don’t happen in earnings announcements. They are expected to be right - every single time. That didn’t happen at Lyft this week. A misplaced decimal point resulted in a 60% surge in their stock price, and the story of Lyft’s mistake quickly overshadowed an otherwise positive announcement. Fortunately, the comms and executive teams nailed the crisis response. Lyft’s CFO, Erin Brewer, immediately corrected the mistake on the earnings call. Lyft’s CEO David Risher owned the mistake, literally saying, “It’s on me,” in follow-up media interviews. By taking accountability and moving fast to correct the error – two fundamental rules for crisis communications – the story shifted positively to Lyft’s good quarter and how they effectively responded to the situation. Behind the scenes, Lyft’s comms team successfully turned a negative event into a positive one, and that’s always the desired outcome of a crisis response.

What’s the watch out: Lyft will undertake an exhaustive post-mortem to identify how this problem happened and how to prevent it from happening again. But mistakes will happen despite having the best processes in place and the best people handling high stakes communications events. When they occur, it’s equally important to have a process for quickly and effectively correcting those mistakes to limit the reputation damage and, in some cases, real financial damage. Act fast, be accountable, fix the problem. Lyft embraced that approach, and the results speak for themselves - the stock is still up, and their reputation is intact.

For these reasons, we recognize Lyft #FortheWin.

Disclaimer: Lyft is not a Perceptual Advisors LLC client

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