Uber Loses $2.9 Billion, Offloads Bike and Scooter Business (techxplore.com) 13
Uber lost $2.9 billion in the first quarter as its overseas investments were hammered by the coronavirus pandemic, but the company is looking to its growing food delivery business and aggressive cost-cutting to ease the pain. Tech Xplore reports: The ride-hailing giant said Thursday it is offloading Jump, its bike and scooter business, to Lime, a company in which it is investing $85 million. Jump had been losing about $60 million a quarter. "While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario," said CEO Dara Khosrowshahi in a statement. "Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up."
On Wednesday, San Francisco-based Uber said it was cutting 3,700 full-time workers, or about 14% of its workforce, as people avoiding contagion either stay indoors or try to limit contact with others. Its main U.S. rival Lyft announced last month it would lay off 982 people, or 17% of its workforce because of plummeting demand. Careem, Uber's subsidiary in the Middle East, cut its workforce by 31%. Uber brought in $3.54 billion in revenue in the first quarter, up 14% from the same time last year. Revenue in its Eats meal delivery business grew 53% as customers shuttered at home opted to order in. Gross bookings grew 8% to $15.8 billion, with 54% growth in the food delivery business and a 3% decline in rides, on a constant currency basis. The report adds that rides were down 80% globally during the month of April. "But rides have been increasing for the past three weeks and bookings in large cities across Georgia and Texas, two states that started re-opening, are up 43% and 50% respectively from their lowest points," the report says.
On Wednesday, San Francisco-based Uber said it was cutting 3,700 full-time workers, or about 14% of its workforce, as people avoiding contagion either stay indoors or try to limit contact with others. Its main U.S. rival Lyft announced last month it would lay off 982 people, or 17% of its workforce because of plummeting demand. Careem, Uber's subsidiary in the Middle East, cut its workforce by 31%. Uber brought in $3.54 billion in revenue in the first quarter, up 14% from the same time last year. Revenue in its Eats meal delivery business grew 53% as customers shuttered at home opted to order in. Gross bookings grew 8% to $15.8 billion, with 54% growth in the food delivery business and a 3% decline in rides, on a constant currency basis. The report adds that rides were down 80% globally during the month of April. "But rides have been increasing for the past three weeks and bookings in large cities across Georgia and Texas, two states that started re-opening, are up 43% and 50% respectively from their lowest points," the report says.
So let me guess (Score:2)
Firing 3700 workers. (Score:3, Insightful)
How the hell does Uber, a company that basically is just an app, need 26K+ building bound employees? You code the app, put it up, and just coast & collect a percentage in perpetuity. How does one fuck up such an easy gravy train to unprofitability?
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I still get a hearty chuckle out of all of the people complaining about how the gig economy and companies like Uber are rippi
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Par for the course in most, if not all, companies operating in the gig economy.
Rides (Score:3)
"But rides have been increasing for the past three weeks and bookings in large cities across Georgia and Texas, two states that started re-opening, are up 43% and 50% respectively from their lowest points," the report says.
Georgia and Texas doesn't matter all that much since Uber gets very little in bookings and revenue from them.
Per Uber's S-1 filing [sec.gov]:
In 2018, we derived 24% of our Ridesharing Gross Bookings from five metropolitan areas – Los Angeles, New York City, and the San Francisco Bay Area in the United States; London in the United Kingdom; and São Paulo in Brazil. We experience greater competition in large metropolitan areas than we do in other markets in which we operate, which has led us to offer significant Driver incentives and consumer discounts and promotions in these large metropolitan areas. As a result of our geographic concentration, our business and financial results are susceptible to economic, social, weather, and regulatory conditions or other circumstances in each of these large metropolitan areas. An economic downturn, increased competition, or regulatory obstacles in any of these key metropolitan areas would adversely affect our business, financial condition, and operating results to a much greater degree than would the occurrence of such events in other areas. In addition, any changes to local laws or regulations within these key metropolitan areas that affect our ability to operate or increase our operating expenses in these markets would have an adverse effect on our business.
Los Angeles started reopening today.
New York hasn't reopened yet, last I read.
San Francisco isn't going to start reopening (phase 2) until May 18 [abc7news.com] at the earliest
I believe London is still on lockdown through May
Sao Paulo will start gradually reopening on May 11 [reuters.com]
My guess is Uber's going to see another big loss for their current quarter
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The irony is that Uber has had dramatically too many employees - possibly by an order of magnitude. This might be the best thing to happen to them when they find that the business still works fine with far fewer employees.
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Good. (Score:2)
I hope they continue to lose money until their backers finally give up and they go out. Uber has done nothing positive for society.
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Has Uber ever actually made money?