Uber cuts spending on incentives and new hires

Uber is planning to tighten its wallet this year. In an email sent to employees shared with CNBCThe ride-hailing company’s CEO Dara Khosrowshahi said the company would cut spending amid an “earthquake” in investor sentiment. The first is marketing and incentives, also known as various Uber perks for customers and drivers, including sign-up bonuses and discounts on rides. Although Khosrowshahi did not mention in the e-mail, he made it clear that any new hires at the company would be considered “a privilege.”

“We had to make sure our unit economics worked before we got big. Incentive spending and the least effective marketing will be scaled back. We will treat hiring as a privilege and consider when and where we add staff. Khosrowshahi wrote: We will be even stricter on costs across the board.

The company’s quarterly earnings report last week contained both good news and bad news: Uber’s $6.9 billion for the first quarter of 2022 is a staggering 136 percent increase over the same period last year. It is clear that demand is returning to pre-pandemic levels. However, the company also lost $5.6 billion due to heavy investments, including overseas car-sharing apps. Uber often buys shares of local competitors or right. But this strategy can backfire, as it did with Chinese ride-hailing company Didi. Uber sold its stake in Didi last year after its value within a few weeks. It is also looking to accelerate the sale of its 29% stake in the Russian ride-hailing platform .

Uber’s incentive program boosted driver registrations and new ridership, but also resulted in significant losses for the company. The company lost $509 million last August, just from spending so much on sign-up bonuses it used to lure drivers back onto the road.

The ride-sharing platform plans to focus more on Uber Eats and program that businesses can use to ship packages. Uber delivery business posted on revenue for the first quarter of 2022 and now has a record number of sellers.

“Investors are delighted with the growth of Delivery out of the pandemic and see that we have outperformed many other pandemic winners. I must admit it was a bit of a surprise for me as I firmly believe that Delivery will grow even faster,” Khosrowshahi wrote.

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