BackUber to cut costs, slow down hiring, CEO Dara Khosrowshahi tells staff: Report
The ride-hailing pioneer becomes the latest to rein in costs to have a lean investment model, after Facebook-owner Meta Platforms said recently it would slow down the growth of its workforce
PremiumRide-hailing company Uber Technologies will scale back hiring and reduce expenditure on its marketing and incentive activities, according to reports on Monday, citing a letter from Chief Executive Officer Dara Khosrowshahi.
The firm becomes the latest to rein in costs to have a lean investment model, after Facebook-owner Meta Platforms said recently it would slow down the growth of its workforce.
Khosrowshahi said Uber's change in strategy was a necessary response to the "seismic shift" in investor sentiment, the report said.
"The least efficient marketing and incentive spend will be pulled back. We will treat hiring as a privilege and be deliberate about when and where we add headcount," the report quoted Khosrowshahi as saying.
The ride hailing giant said last week its driver base is at a post-pandemic high, and the company expects this to continue without significant incentive investments, a sharp contrast to rival Lyft Inc which has said it needs to spend more for labor.
The company will now focus on achieving profitability on a free cash flow basis, rather than adjusted earnings before interest, taxes, depreciation, and amortization.
Uber expects to generate "meaningful positive cash flows" for the full year, according to its latest earnings report.
Khosrowshahi added in his letter that Uber's food delivery and freight businesses need to grow faster.
How the ride-hailing pioneer is electrifying
In September 2020, Uber also pledged to eliminate all emissions from every trip booked on its platform globally by 2040.
The ambitious announcement — made six months into the pandemic, at a time when travel was still severely disrupted — included a commitment to invest $800 million by 2025 in helping drivers switch to electric vehicles.
The firm said at the time it expected all trips in the US, Canada and Europe to take place in EVs by the end of this decade.
Uber initially made slow progress toward these goals, especially in its home market.
A year ago, the share of battery-powered vehicles in US ride-hailing was still lower than in the country’s overall passenger-car market.
For its fleet to be entirely electric by the end of the decade, Uber will have to go from lagging behind in EV adoption to considerably outpacing it.
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