SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

   Technology StocksUber Technologies and Lyft Inc. IPOs


Previous 10 
From: Glenn Petersen5/27/2022 8:44:21 AM
   of 238
 
Uber and Lyft’s New Road: Fewer Drivers, Thrifty Riders and Jittery Investors

The companies are cutting costs, bringing back cheaper rides and looking for new ways to woo drivers

By Preetika Rana
Wall Street Journal
May 27, 2022 7:45 am ET

Uber UBER 4.81%? Technologies Inc. and Lyft Inc. LIFT 6.19%? are recalibrating to a new reality: Investors are increasing the pressure to rein in hefty losses, riders are taking fewer trips as fares rise and drivers are still in short supply.

The average Uber and Lyft fare hit a record high in the U.S. last month, according to market-research firm YipitData, driven by the labor shortage and high gas prices. The companies collectively drew at least 20% fewer riders and posted 35% fewer trips in the first quarter than three years earlier, according to YipitData.

The companies expected the labor shortage to normalize after states phased out pandemic-driven unemployment benefits last year, but demand for drivers continues to outpace supply.

The situation has analysts and investors asking how big the ride-hailing market is and whether Uber and Lyft can operate without losing money.
To combat the stubborn set of challenges, the companies are bringing back ride-pooling—picking up multiple passengers who want to save money by paying only part of the fare. Ride-pooling was suspended during the health crisis.

To deepen its pool of on-demand drivers, Uber has joined forces with its once-sworn enemies, taxis. Lyft said it would hand out bigger bonuses to drivers. Meanwhile, both companies are cutting costs by restricting hiring and spending.

“Our near-term action plan will be focused on accelerating profits—whether we like it or not, that’s the ticket of entry in today’s market,” Lyft President John Zimmer wrote in a Tuesday memo to staff viewed by The Wall Street Journal.

Lyft’s shares have fallen more than 65% in the past year, Uber’s more than 50%, while the Nasdaq Composite Index has slid less than 20%.


To deepen its pool of on-demand drivers, Uber has joined forces with its once-sworn enemies, taxis. PHOTO: ANGELA WEISS/AGENCE FRANCE-PRESSE/GETTY IMAGES
--------------------

The companies are attempting to find a new balance between pushing for profits and growing their customer base by remaining affordable.

“It’s in our interest to make Uber as widely affordable and available as possible,” Andrew Macdonald, Uber’s global mobility chief, said in an emailed statement.

To get the attention of price-sensitive customers, Lyft this month rolled out its first advertising campaign to promote the use of its rental bikes. Last week Uber launched features meant to make booking rides easier and cheaper. One feature imports hotel and flight reservations from Gmail and makes suggestions on prebooking rides, while another lets individuals cover Uber rides through vouchers for things like weddings.

For years, Uber and Lyft subsidized ride prices. Those discounts saddled the companies with hefty losses but helped them boast of tens of millions of riders.

The companies put more emphasis on striving for profit after going public in 2019, only to be hit by the pandemic. At first, they didn’t have enough riders, then they struggled with a lack of drivers. The driver shortage lasted longer than the companies expected, pushing fares higher last year. Fares then seemed to have plateaued, only for soaring gas prices to drive another surge. The companies imposed new fees on riders to help drivers.

Average U.S. fares reached a new high in April, more than 35% above where they were before Covid-19, according to YipitData.

Both Uber and Lyft expect fares to eventually retreat but have signaled that the focus on turning a profit means they likely won’t return to prepandemic levels.

“The days of ride-share being a cheaper alternative to other modes of transportation are gone,” said Youssef Squali, an analyst for Truist Securities. “The market is probably not as large as we thought two to three years ago.”

Lyft reported around three million fewer riders in the first quarter than three years earlier, a 13% drop. Uber reported at least 20% fewer trips in the U.S. for the quarter, though it said the number of riders in April was near prepandemic levels.

For some once-regular customers, ride-share has now become a luxury.



Uber’s food-delivery arm provides a revenue stream that doesn’t depend on people going out more. PHOTO: JUTHARAT PINYODOONYACHET FOR THE WALL STREET JOURNAL
-------------------

Sharan Godya, a 31-year-old San Francisco resident, used to use Uber and Lyft several times a week but has cut back and started taking the bus for short trips. “That’s not something I did before,” he said.

The companies point out that their revenue has surpassed prepandemic levels thanks to higher fares, and say they expect both riders and trip volume will eventually bounce back. Uber said its riders and trip volumes have recovered to prepandemic levels overseas, and the U.S. has lagged behind because it was harder hit by the recent Omicron wave.

Both companies are betting that pooled rides will bring back cost-conscious customers. Uber resumed them in Miami in November and plans to expand to 15 other markets later this year. Earlier this month, Lyft resumed pooled rides in San Francisco and some other cities. Mr. Zimmer said in his staff memo this week that it will expand the service to all markets to “Win riders through affordability.”

To boost its driver pool and reduce costs, Uber is working with traditional taxis in some cities. Using established taxis reduces the pressure to spend on bonuses to woo drivers.

Both companies said they can’t pull back too much on bonuses without risking losing drivers, as gig workers have so many other options now.

“I’m not loyal,” said Sergio Avedian, who has driven for seven apps, including Uber and Lyft, and writes about his experience on The RideShare Guy blog for drivers. “Nobody is loyal.”

Write to Preetika Rana at preetika.rana@wsj.com

Uber and Lyft’s New Road: Fewer Drivers, Thrifty Riders and Jittery Investors - WSJ

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Glenn Petersen who wrote (230)7/10/2022 4:41:49 PM
From: Glenn Petersen
1 Recommendation   of 238
 
Uber broke laws, duped police and secretly lobbied governments, leak reveals

-- More than 124,000 confidential documents leaked to the Guardian

-- Files expose attempts to lobby Joe Biden, Olaf Scholz and George Osborne

-- Emmanuel Macron secretly aided Uber lobbying in France, texts reveal

-- Company used ‘kill switch’ during raids to stop police seeing data

-- Former Uber CEO told executives ‘violence guarantees success’

by Harry Davies, Simon Goodley, Felicity Lawrence, Paul Lewis and Lisa O'Carroll
The Guardian
Sun 10 Jul 2022 12.00 EDT

A leaked trove of confidential files has revealed the inside story of how the tech giant Uber flouted laws, duped police, exploited violence against drivers and secretly lobbied governments during its aggressive global expansion.

The unprecedented leak to the Guardian of more than 124,000 documents – known as the Uber files – lays bare the ethically questionable practices that fuelled the company’s transformation into one of Silicon Valley’s most famous exports.

The leak spans a five-year period when Uber was run by its co-founder Travis Kalanick, who tried to force the cab-hailing service into cities around the world, even if that meant breaching laws and taxi regulations.

During the fierce global backlash, the data shows how Uber tried to shore up support by discreetly courting prime ministers, presidents, billionaires, oligarchs and media barons.



French taxi drivers protesting against private hire services such as Uber. Photograph: Olivier Coret/Rex/Shutterstock
-----------------------

Leaked messages suggest Uber executives were at the same time under no illusions about the company’s law-breaking, with one executive joking they had become “pirates” and another conceding: “We’re just fucking illegal.”

The cache of files, which span 2013 to 2017, includes more than 83,000 emails, iMessages and WhatsApp messages, including often frank and unvarnished communications between Kalanick and his top team of executives.

In one exchange, Kalanick dismissed concerns from other executives that sending Uber drivers to a protest in France put them at risk of violence from angry opponents in the taxi industry. “I think it’s worth it,” he shot back. “Violence guarantee[s] success.”

In a statement, Kalanick’s spokesperson said he “never suggested that Uber should take advantage of violence at the expense of driver safety” and any suggestion he was involved in such activity would be completely false.

The leak also contains texts between Kalanick and Emmanuel Macron, who secretly helped the company in France when he was economy minister, allowing Uber frequent and direct access to him and his staff.

Macron, the French president, appears to have gone to extraordinary lengths to help Uber, even telling the company he had brokered a secret “deal” with its opponents in the French cabinet.

Privately, Uber executives expressed barely disguised disdain for other elected officials who were who were less receptive to the company’s business model.

After the German chancellor, Olaf Scholz, who was mayor of Hamburg at the time, pushed back against Uber lobbyists and insisted on paying drivers a minimum wage, an executive told colleagues he was “a real comedian”.

When the then US vice-president, Joe Biden, a supporter of Uber at the time, was late to a meeting with the company at the World Economic Forum at Davos, Kalanick texted a colleague: “I’ve had my people let him know that every minute late he is, is one less minute he will have with me.”

After meeting Kalanick, Biden appears to have amended his prepared speech at Davos to refer to a CEO whose company would give millions of workers “freedom to work as many hours as they wish, manage their own lives as they wish”.

The Guardian led a global investigation into the leaked Uber files, sharing the data with media organisations around the world via the International Consortium of Investigative Journalists (ICIJ). More than 180 journalists at 40 media outlets including Le Monde, Washington Post and the BBC will in the coming days publish a series of investigative reports about the tech giant.

In a statement responding to the leak, Uber admitted to “mistakes and missteps”, but said it had been transformed since 2017 under the leadership of its current chief executive, Dara Khosrowshahi.

“We have not and will not make excuses for past behaviour that is clearly not in line with our present values,” it said. “Instead, we ask the public to judge us by what we’ve done over the last five years and what we will do in the years to come.”

Kalanick’s spokesperson said Uber’s expansion initiatives were “led by over a hundred leaders in dozens of countries around the world and at all times under the direct oversight and with the full approval of Uber’s robust legal, policy and compliance groups”.

‘Embrace the chaos’

The leaked documents pull back the curtains on the methods Uber used to lay the foundations for its empire. One of the world’s largest work platforms, Uber is now a $43bn (£36bn) company, making approximately 19m journeys a day.

The files cover Uber’s operations across 40 countries during a period in which the company became a global behemoth, bulldozing its cab-hailing service into many of the cities in which it still operates today.



An Uber car in Moscow. Photograph: Fifg/Alamy
----------------------

From Moscow to Johannesburg, bankrolled with unprecedented venture capital funding, Uber heavily subsidised journeys, seducing drivers and passengers on to the app with incentives and pricing models that would not be sustainable.

Uber undercut established taxi and cab markets and put pressure on governments to rewrite laws to help pave the way for an app-based, gig-economy model of work that has since proliferated across the world.

In a bid to quell the fierce backlash against the company and win changes to taxi and labour laws, Uber planned to spend an extraordinary $90m in 2016 on lobbying and public relations, one document suggests.

Its strategy often involved going over the heads of city mayors and transport authorities and straight to the seat of power.

In addition to meeting Biden at Davos, Uber executives met face-to-face with Macron, the Irish prime minister, Enda Kenny, the Israeli prime minister, Benjamin Netanyahu, and George Osborne, the UK’s chancellor at the time. A note from the meeting portrayed Osborne as a “strong advocate”.

In a statement, Osborne said it was the explicit policy of the government at the time to meet with global tech firms and “persuade them to invest in Britain, and create jobs here”.

While the Davos sitdown with Osborne was declared, the data reveals that six UK Tory cabinet ministers had meetings with Uber that were not disclosed. It is unclear if the meetings should have been declared, exposing confusion around how UK lobbying rules are applied.



Taxis block Whitehall during a protest against a decision to grant Uber a licence to operate in London in 2016. Photograph: Andy Rain/EPA
----------------------

The documents indicate Uber was adept at finding unofficial routes to power, applying influence through friends or intermediaries, or seeking out encounters with politicians at which aides and officials were not present.
It enlisted the backing of powerful figures in places such as Russia, Italy and Germany by offering them prized financial stakes in the startup and turning them into “strategic investors”.

And in a bid to shape policy debates, it paid prominent academics hundreds of thousands of dollars to produce research that supported the company’s claims about the benefits of its economic model.

Despite a well-financed and dogged lobbying operation, Uber’s efforts had mixed results. In some places Uber succeeded in persuading governments to rewrite laws, with lasting effects. But elsewhere, the company found itself blocked by entrenched taxi industries, outgunned by local cab-hailing rivals or opposed by leftwing politicians who simply refused to budge.



A demonstrator holds a flare during a Paris protest against Uber. Photograph: François Mori/AP
-------------------------

When faced with opposition, Uber sought to turn it to its advantage, seizing upon it to fuel the narrative its technology was disrupting antiquated transport systems, and urging governments to reform their laws.

As Uber launched across India, Kalanick’s top executive in Asia urged managers to focus on driving growth, even when “fires start to burn”. “Know this is a normal part of Uber’s business,” he said. “Embrace the chaos. It means you’re doing something meaningful.”

Kalanick appeared to put that ethos into practice in January 2016, when Uber’s attempts to upend markets in Europe led to angry protests in Belgium, Spain, Italy and France from taxi drivers who feared for their livelihoods.

Amid taxi strikes and riots in Paris, Kalanick ordered French executives to retaliate by encouraging Uber drivers to stage a counter-protest with mass civil disobedience.

Warned that doing so risked putting Uber drivers at risk of attacks from “extreme right thugs” who had infiltrated the taxi protests and were “spoiling for a fight”, Kalanick appeared to urge his team to press ahead regardless. “I think it’s worth it,” he said. “Violence guarantee[s] success. And these guys must be resisted, no? Agreed that right place and time must be thought out.”

The decision to send Uber drivers into potentially volatile protests, despite the risks, was consistent with what one senior former executive told the Guardian was a strategy of “weaponising” drivers, and exploiting violence against them to “keep the controversy burning”.

It was a playbook that, leaked emails suggest, was repeated in Italy, Belgium, Spain, Switzerland and the Netherlands.

When masked men, reported to be angry taxi drivers, turned on Uber drivers with knuckle-dusters and a hammer in Amsterdam in March 2015, Uber staffers sought to turn it to their advantage to win concessions from the Dutch government.

Driver victims were encouraged to file police reports, which were shared with De Telegraaf, the leading Dutch daily newspaper. They “will be published without our fingerprint on the front page tomorrow”, one manager wrote. “We keep the violence narrative going for a few days, before we offer the solution.”

Kalanick’s spokesperson questioned the authenticity of some documents. She said Kalanick “never suggested that Uber should take advantage of violence at the expense of driver safety” and any suggestion that he was involved in such activity would be “completely false”.

Uber’s spokesperson also acknowledged past mistakes in the company’s treatment of drivers but said no one, including Kalanick, wanted violence against Uber drivers. “There is much our former CEO said nearly a decade ago that we would certainly not condone today,” she said. “But one thing we do know and feel strongly about is that no one at Uber has ever been happy about violence against a driver.”

The ‘kill switch’

Uber drivers were undoubtedly the target of vicious assaults and sometimes murders by furious taxi drivers. And the cab-hailing app, in some countries, found itself battling entrenched and monopolised taxi fleets with cosy relationships with city authorities. Uber often characterised its opponents in the regulated taxi markets as operating a “cartel”.

However, privately, Uber executives and staffers appear to have been in little doubt about the often rogue nature of their own operation.

In internal emails, staff referred to Uber’s “other than legal status”, or other forms of active non-compliance with regulations, in countries including Turkey, South Africa, Spain, the Czech Republic, Sweden, France, Germany, and Russia.

One senior executive wrote in an email: “We are not legal in many countries, we should avoid making antagonistic statements.” Commenting on the tactics the company was prepared to deploy to “avoid enforcement”, another executive wrote: “We have officially become pirates.”

Nairi Hourdajian, Uber’s head of global communications, put it even more bluntly in a message to a colleague in 2014, amid efforts to shut the company down in Thailand and India: “Sometimes we have problems because, well, we’re just fucking illegal.” Contacted by the Guardian, Hourdajian declined to comment.

Kalanick’s spokesperson accused reporters of “pressing its false agenda” that he had “directed illegal or improper conduct”.

Uber’s spokesperson said that, when it started, “ridesharing regulations did not exist anywhere in the world” and transport laws were outdated for a smartphone era.

Across the world, police, transport officials and regulatory agencies sought to clamp down on Uber. In some cities, officials downloaded the app and hailed rides so they could crack down on unlicensed taxi journeys, finding Uber drivers and impounding their cars. Uber offices in dozens of countries were repeatedly raided by authorities.

Against this backdrop, Uber developed sophisticated methods to thwart law enforcement. One was known internally at Uber as a “kill switch”. When an Uber office was raided, executives at the company frantically sent out instructions to IT staff to cut off access to the company’s main data systems, preventing authorities from gathering evidence.

The leaked files suggest the technique, signed off by Uber’s lawyers, was deployed at least 12 times during raids in France, the Netherlands, Belgium, India, Hungary and Romania.



Travis Kalanick speaking to students in Mumbai in 2016. Photograph: Danish Siddiqui/Reuters
----------------------------

Kalanick’s spokesperson said such “kill switch” protocols were common business practice and not designed to obstruct justice. She said the protocols, which did not delete data, were vetted and approved by Uber’s legal department, and the former Uber CEO was never charged in relation to obstruction of justice or a relate offence.

Uber’s spokesperson said its kill switch software “should never have been used to thwart legitimate regulatory action” and it had stopped using the system in 2017, when Khosrowshahi replaced Kalanick as CEO.

Another executive the leaked files suggest was involved in kill switch protocols was Pierre-Dimitri Gore-Coty, who ran Uber’s operations in western Europe. He now runs Uber Eats, and sits on the company’s 11-strong executive team.

Gore-Coty said in a statement he regretted “some of the tactics used to get regulatory reform for ridesharing in the early days”. Looking back, he said: “I was young and inexperienced and too often took direction from superiors with questionable ethics.”

Uber broke laws, duped police and secretly lobbied governments, leak reveals | Uber | The Guardian

Share RecommendKeepReplyMark as Last Read


From: TimF7/22/2022 11:11:20 AM
   of 238
 
Strange Result of Uber Tipping

youtube.com

Share RecommendKeepReplyMark as Last Read


From: Glenn Petersen7/29/2022 10:53:40 AM
   of 238
 
Uber Eats, DoorDash Offer New Deals to Court Customers as Growth Cools

Delivery apps look to move beyond food as they face high inflation, a potential economic downturn



By Preetika Rana
Wall Street Journal
July 20, 2022 2:02 pm ET



DoorDash says it expects the total value of orders placed on its app to grow about 20% this year.PHOTO: PATRICK T. FALLON/BLOOMBERG NEWS

-------------------------------

Food-delivery companies have a lot on their plate. After surging growth during the pandemic, they are now facing their slowest growth in years while confronting high inflation and a potential economic downturn.

With their shares tumbling and expansion cooling, DoorDash Inc. DASH -5.36%? and Uber Eats have been offering new ads and deals to attract customers, tweaking their apps to trigger more spending and moving beyond food to give people more reasons to return. They are also trying to keep restaurants from ratcheting up delivery prices while offering them new services.

Investors are asking, “‘Is Delivery a good business and why?’ and ‘What happens if we enter a recession?’” Uber Technologies Inc. UBER -3.84%? Chief Executive Dara Khosrowshahi wrote in a staff memo in May. “We need to answer both of these questions with undeniably strong results.”

Inflation has risen to a four-decade high, and restaurants are raising prices, making food delivery more expensive. There are early signs some consumers aren’t ordering as much as expected.

On Monday, the U.K.’s Deliveroo PLC trimmed its full-year guidance on the value of orders placed on its platform. Order value was below analysts’ expectations in the three months through June because of “increased consumer headwinds,” the company said.



A KFC order for Uber Eats, whose parent company’s shares have fallen more than 50% in the past 12 months.PHOTO: DOUGLAS R. CLIFFORD/TAMPA BAY TIMES/ASSOCIATED PRESS

------------------

“I definitely have been cutting back on delivery and other excess spending,” said Nick Fong, a 29-year-old who lives in Los Angeles and starts business school in the fall. “My girlfriend has said multiple times, ‘Why are we ordering DoorDash? Let’s just go pick it up.’”

DoorDash CEO Tony Xu said on a May call with analysts, “Inflation is definitely a concern we certainly are taking very seriously.”

DoorDash and Uber collectively control more than 80% of the U.S. food-delivery market.
While both increased their delivery revenue in the first quarter and are expected to expand during the full year, the pace of growth has cooled sharply.

The total number of orders at DoorDash, Uber Eats and the other delivery companies in the U.S. grew 11% in the three months through June compared with the same period last year, marking the slowest quarterly expansion in the two years since the pandemic struck, according to the market research firm YipitData. Orders grew 48% in the same three-month period last year and 88% in the corresponding period in 2020. Delivery spending rose at its slowest quarterly pace in two years in the three months through June, YipitData said.

The third-largest U.S. food-delivery company, Grubhub, weighed on overall industry growth, YipitData said. Grubhub’s parent company reported that the app’s orders fell in the first quarter ended in March compared with a year earlier. Its parent company, Just Eat Takeaway.com NV, is considering selling Grubhub less than a year after acquiring it.

DoorDash and Uber Eats said that the pandemic accustomed people to ordering everything at the touch of a button and that the shift in habits is here to stay. The companies said that they are still growing and that inflation hadn’t significantly crimped demand during the first quarter that ended in March. They are scheduled to announce results for the June quarter next month.

Uber’s and DoorDash’s shares have each fallen more than 50% in the past 12 months, compared with the less than 20% decline in the Nasdaq Composite Index. The apps, among the biggest pandemic winners, must now show investors that they can continue to expand in a tough environment while trimming their losses.



Trevor Noah, after biting into an apparently inedible item, in an Uber Eats ad.PHOTO: UBER EATS/ASSOCIATED PRESS

--------------------------

While analysts expected growth rates to slow from pandemic peaks, they are watching to see whether consumers treat the food-delivery apps like a necessity or luxury during what could be the industry’s first recession.

“There is more economic pain incoming for consumers,” said Matthew Goodman, a senior analyst at the data analytics firm M Science. “You have to wonder if more price-sensitive consumers are going to be willing to pay for that convenience as often as they have been,” he said.

DoorDash said when it released its first-quarter results that it expected the total value of orders placed on its app to grow about 20% this year, topping last year’s spending record. “Our strategy and operational efficiency has allowed DoorDash to outperform across market environments,” the company said.

Adam DeWitt discussed the company's growth outlook as Covid-19 recedes and customers return to previous habits, in a talk at the WSJ Global Food Forum. Photo: Ralph Alswang for The Wall Street Journal
In a big television and online ad campaign launched during the Super Bowl, Uber Eats is pushing the message that it offers more than just food.

“Get anything. Don’t always eat it,” Uber Eats’ campaign slogan says after showing Gwyneth Paltrow and Trevor Noah biting into orders of soap and candles.

Uber and DoorDash are increasing their focus on delivering groceries and alcohol to bump up revenue. These items also help limit labor costs because more orders can be combined together. Earlier this year, DoorDash said it was working with Albertsons Cos. to deliver goods to customers in under 30 minutes, targeting a market led by Instacart Inc. Uber Eats is redesigning the grocery section of its U.S. app, a spokeswoman said.

To rein in labor costs, DoorDash last week said it would raise the minimum order for free delivery on smaller household items. In May, Uber said it would slow its hiring plans.

The apps are sweetening deals to persuade users to become subscribers, who usually pay a monthly fee for discounts on food and free delivery. Subscribers are important for continued growth, according to analysts, because they typically spend more than nonsubscribers and generate recurring revenue.

Earlier this month, Uber said subscribers would receive a 10% discount on each Eats order—twice as much as before. Grubhub struck a deal this month to offer its monthly membership to Amazon.com Inc.’s more than 200 million Prime customers. DoorDash has rolled out a student plan at half the price of its regular subscription.

Last month, DoorDash launched new features—including letting customers write reviews of restaurants and rate dishes—to try to tempt people to use the app more.

Apps are also trying to cap what restaurants charge on delivery so they don’t scare off consumers. DoorDash has negotiated a deal with McDonald’s Corp. under which it reserved the right to stop working with outlets that marked up delivery prices by more than 30% of the in-store price.

To expand their reach, Uber and DoorDash recently introduced nationwide shipping on orders such as gourmet cakes.

DoorDash is diversifying by extending new services to restaurants. In March, it purchased a startup whose order-and-pay software lets customers order food from their mobile phones while seated at restaurants. DoorDash said the service would take the burden off understaffed eateries by helping them better manage staff. In February, it began lending money to restaurants based on their sales on the app.

While delivery held up stronger than expected last year, Lloyd Walmsley, a UBS analyst covering the sector, said that pattern could be broken by the state of the economy.

“There’s definitely growing concern that this is a very tough place,” he said. “There’s a lot of reasons to be worried.”

Write to Preetika Rana at preetika.rana@wsj.com

Appeared in the July 21, 2022, print edition as 'Growth Cools at Once-Hot Uber Eats and DoorDash'.

Uber Eats, DoorDash Offer New Deals to Court Customers as Growth Cools - WSJ

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Glenn Petersen who wrote (233)8/2/2022 2:45:58 PM
From: Glenn Petersen
   of 238
 
Uber reports another big loss but beats on revenue, shares pop 17%

Published Tue, Aug 2 20227:02 AM EDT
Updated 1 Min Ago
Sofia Pitt @sofia_pitt
CNBC.com

Key Points
  • Uber reported a net loss of $2.6 billion for the second quarter, $1.7 billion of which was attributed to investments and a revaluation of stakes in Aurora, Grab and Zomato.
  • Uber beat analyst estimates on revenue.
  • CEO Dara Khosrowshahi said Uber continues to benefit from an increase in on-demand transportation and a shift in spending from retail to services.
Uber reported a second-quarter loss on Tuesday but beat analyst estimates for revenue and posted $382 million in free cash flow for the first time ever.

Shares of Uber were up 17% at about 12:30 p.m. ET.

Here are the key numbers:
  • Loss per share: $1.33, not comparable to estimates.
  • Revenue: $8.07 billion vs. $7.39 billion estimated, according to a Refinitiv survey of analysts.
The company reported a net loss of $2.6 billion for the second quarter, $1.7 billion of which was attributed to investments and a revaluation of stakes in Aurora, Grab and Zomato.

But CEO Dara Khosrowshahi said in a prepared statement that Uber continues to benefit from an increase in on-demand transportation and a shift in spending from retail to services.

The company reported adjusted EBITDA of $364 million, ahead of the $240 million to $270 million range it provided in the first quarter. Gross bookings of $29.1 billion were up 33% year over year and in line with its forecast of $28.5 billion to $29.5 billion.

Here's how Uber's largest business segments performed in the second quarter of 2022:

Mobility (gross bookings): $13.4 billion, up 57% from a year ago in constant currency.

Delivery (gross bookings): $13.9 billion, up 12% from a year ago in constant currency.

Uber relied heavily on growth in its Eats delivery business during the pandemic, but its mobility segment surpassed Eats revenue in the first quarter as riders began to take more trips.

That trend continued during the second quarter. Its mobility segment reported $3.55 billion in revenue, compared with delivery's $2.69 billion. Uber's freight segment delivered $1.83 billion in revenue for the quarter. Revenue doesn't include the additional taxes, tolls and fees from gross bookings.

Despite the increase in fuel prices during the quarter, Uber said it has more drivers and couriers earning money than before the pandemic, and it saw an acceleration in active and new driver growth.

"Driver engagement reached another post-pandemic high in Q2, and we saw an acceleration in both active and new driver growth in the quarter," Khosrowshahi said in prepared remarks. "Against the backdrop of elevated gas prices globally, this is a resounding endorsement of the value drivers continue to see in Uber. Consequently in July, surge and wait times are near their lowest levels in a year in several markets, including the US, and our Mobility category position is at or near a multi-year high in the US, Canada, Brazil, and Australia."

Uber recently announced new changes that may help it continue to attract and keep drivers. They'll be able to choose the trips they want, for example, and will be able to see how much they'll earn before they accept a trip.

The company reported 1.87 billion trips on the platform during the quarter, up 9% from last quarter and up 24% year over year. Monthly active platform consumers reached 122 million, up 21% year over year. Drivers and couriers earned an aggregate $10.8 billion during the quarter, up 37% year over year.

Khosrowshahi said on a call with investors that new driver sign-ups were up 76% year over year. He said over 70% of drivers said inflation and cost of living played a part in their decision to join Uber.

"The most obvious effect of inflation seems to be getting more drivers on the platform," Khosrowshahi said on CNBC's " Squawk on the Street."

Uber also benefited from the resurgence in travel. It said airport gross bookings had reached pre-pandemic levels, at 15% of total mobility gross bookings, up 139% year-over-year.

For the third quarter, Uber expects gross bookings between $29 billion and $30 billion and adjusted EBITDA of $440 million to $470 million.

cnbc.com

Share RecommendKeepReplyMark as Last Read


From: Glenn Petersen8/19/2022 5:37:02 AM
   of 238
 
It’s no surprise that Uber and Lyft are tapping into the ad business

Fast Company
August 19, 2022

Making money by connecting users to rides is a notoriously tough business. Uber and Lyft are losing loads of cash each quarter.
When both companies were flooded with venture capital funding in their first few years of operation, that wasn’t much of an issue. Thanks to VC funding, Uber and Lyft were able to offer users extremely low rates while also paying their drivers.

Then they went public. Lyft made its market debut in March 2019; Uber followed with an initial public offering that May. Those IPOs meant that the two companies now had to prove to investors they possessed viable business models and could turn a profit.

That’s where advertising comes in.

Last week, Lyft announced the creation of Lyft Media, its advertising arm. Lyft, which acquired a company in 2020 that makes monitors to run digital ads atop cars, is looking to sell ad space on in-car tablets that riders use, on digital display panels and its bike docking stations, and through in-app sponsorships. Lyft will be competing against Uber, which entered the ad business in 2019 and sells ads through both its primary app and Uber Eats, as well as offering ad displays atop its cars.

That Lyft and Uber are both putting so many resources into advertising suggests the companies are entering a new phase in their path to profitability.

“We’ve seen rideshares go from [just] rideshares to the likes of Uber Eats and delivery mechanisms, to now maybe delivering beyond just food,” Arjun Kapur, managing director and founder of Comcast’s venture group Forecast Labs, tells Fast Company.

“But you know,” Kapur adds, “there are only so many things you can do with delivery. The question is, how do you then create the next billion-dollar revenue stream for the business that would leverage the assets and capabilities of the existing business?”

For the two largest U.S. rideshare companies, the answer appears to be advertising. It makes sense, considering millions of users are looking at their phones when they book trips. Uber and Lyft have captive audiences in their riders, who are either looking at their devices while being carted around, or sitting in cars that have ample room for digital advertisements.

“Essentially, it’s a ‘We have it so why not use it’ situation,” says Randy Nelson, head of mobile insights at mobile app market intelligence firm Sensor Tower.

It also helps that the two companies have unique access to their users. Uber and Lyft could boast to advertisers that they have the capability to target ads to certain customers, based on things like travel history or food orders.

“They probably know a little bit about the person and they can get more data access and try to make them a little bit more sophisticated than your general taxi cab advertising,” Kapur says. “Even the slightest layer of data on that can tip the scales on brand advertisers wanting to put a lot more of their dollars in this.”

This could be an extremely lucrative opportunity for the rideshare giants. Uber’s ad division generated $141 million in revenue in 2021, up from $11 million in 2020; Uber executive Mark Grether said at an investor day earlier this year that the company could reach $1 billion in ad revenue by 2024. Lyft hasn’t commented on what it expects from ad revenue with its new unit.

“The generation coming into their prime as consumers has notably different views on current-day advertising, so advertisers are reworking their strategies to connect with them, and that’s somewhere these in-vehicle ads could appear appealing,” Sensor Tower’s Nelson says.

It’s unclear where drivers will fit into all of this. Lyft said that a portion of revenue from its display and tablet ads will go to its drivers, though it didn’t specify how much. Grether said at the Uber investor day that some drivers who had installed ad displays atop their cars increased their earnings by about 20% on average.

Still, the advertising windfall likely won’t be significant for drivers in the beginning, says Jeremy Goldman, director of marketing and commerce briefings at Insider Intelligence, noting that as ad sales shoot up (giving drivers a new revenue source), companies could use that growth as reasoning to keep wages low.

“I don’t even expect that to happen all that soon,” Goldman says, acknowledging that it takes time to build market share and develop the technology. “It’s really much more of a tactic to say, ‘Look what we’re doing for you, we’re buying you into this whole program.’”

Kapur argues that ads could do the exact opposite, providing another mechanism by which rideshare companies will be forced to compete for drivers.

“There’s going to be a demand-supply issue between the two [companies] that they would have to fight,” Kapur says, “so I would imagine if one does it and it works and provides more income to the drivers, everybody’s going to rush to that because they don’t want to be the one place that the drivers don’t want to use anymore. . . . That could cripple the entire core business.”

The post It’s no surprise that Uber and Lyft are tapping into the ad business appeared first on Fast Company.


dnyuz.com

Share RecommendKeepReplyMark as Last Read


From: Ron9/17/2022 1:45:36 PM
   of 238
 
Troubling Details About the Big Uber Hack
wired.com

Share RecommendKeepReplyMark as Last Read


From: Glenn Petersen10/12/2022 5:48:07 AM
1 Recommendation   of 238
 
Uber, Doordash plunge after Labor Department proposes change to gig worker classification

Published Tue, Oct 11 202210:37 AM EDT
Updated 4 Hours Ago
Lauren Feiner @lauren_feiner

Key Points
  • The Biden Labor Department released a proposal Tuesday that could make it possible for gig workers to be reclassified as employees, rather than contractors.
  • The proposed rule sent stocks of gig companies like DoorDash, Lyft and Uber down.
  • It comes after a court reinstated a Trump-era rule Biden's Labor Department tried to block that would have made it easier to classify gig workers as contractors.
The Biden Labor Department released a proposal Tuesday that could pave the way for regulators and courts to reclassify gig workers as employees rather than independent contractors.

The proposed rule, if adopted, could raise costs for companies like Lyft, Uber, Instacart and DoorDash that rely on contract workers to pick up shifts on their own schedules. Shares of Lyft fell 12% on Tuesday, while Uber dropped 10.4% and DoorDash shed 6%.

The companies have argued that flexible schedules are attractive to workers, pointing to surveys showing the popularity of the model, which they say is made possible by the use of independent contractor status. Some labor experts and activists have disagreed, however, saying the companies use the contractor model to reduce their own costs while denying workers important protections such as health-care benefits, overtime pay and the ability to organize into unions.

In 2020, a California law went into effect requiring many companies to reclassify contract workers as employees, but later that year, voters approved a proposition that exempted app-based ride-hailing and delivery companies from the law.

Last year, the Biden administration rescinded a rule created under Trump's Labor Department that would have made it easier for gig companies to classify workers as independent contractors instead of employees. But after a legal challenge, a court reinstated the Trump-era rule.

Biden's Labor Department said in its notice in the Federal Register that it had considered waiting longer to see how the Trump-era rule played out. But it decided to move ahead with the proposed regulation instead because it believes keeping the earlier rule in place "would have a confusing and disruptive effect on workers and businesses alike due to its departure from case law describing and applying the multifactor economic reality test as a totality-of-the-circumstances test."

The proposed rule would allow the determination of whether to classify a worker as a contractor or employee to rely on a more holistic assessment, including whether the work is an "integral" part of the employer's business. The goal is to protect workers from being classified improperly while providing consistency for businesses that wish to employ independent contractors, the agency wrote.

The new proposed rule will still need to make its way through the formal regulatory process, including allowing time for the public to submit comments, before it is adopted.

Uber's head of federal affairs, CR Wooters, said in a statement that the proposed rule "takes a measured approach, essentially returning us to the Obama era, during which our industry grew exponentially. In a time of deep economic uncertainty, it's crucial that the Biden administration continues to hear from the more than 50 million people who have found an earning opportunity with companies like ours."

In a blog post Tuesday, Lyft wrote that there "is no immediate or direct impact on the Lyft business at this time," noting the 45-day public comment period. It added that the rule "Does not reclassify Lyft drivers as employees," and also doesn't force it to change its business model. Lyft said the rule simply reverts the standard to that used under the Obama administration, which previously applied to its company "and did not result in reclassification of drivers."

cnbc.com

Share RecommendKeepReplyMark as Last Read


From: Glenn Petersen11/1/2022 7:58:43 AM
   of 238
 
Uber reports another loss but beats on revenue and the stock is up

Published Tue, Nov 1 20226:59 AM EDT
Updated 1 Min Ago
CNBC.com

Key Points
  • Uber reported third-quarter earnings that beat analysts' estimates for revenue Tuesday.
  • The company suffered a net loss of $1.2 billion for the quarter, $512 million of which was attributed to revaluations of Uber's equity investments, according to a company release. In this article
Uber reported a third-quarter loss Tuesday but beat analysts' estimates for revenue and showed a surge in bookings. Shares were up about 9% in premarket trading.

Here's how the company did:
  • Loss per share: 61 cents
  • Revenue: $8.34 billion vs. $8.12 billion expected by analysts, according to Refinitiv.
Uber reported a net loss of $1.2 billion for the third quarter, $512 million of which was attributed to revaluations of Uber's equity investments, according to a company release.

In a prepared statement, CEO Dara Khosrowshahi said Uber delivered a "strong quarter" and benefitted from booming travel, easing lockdowns and shifts in consumer spending. He said October is tracking to be the company's "best month ever for both Mobility and total company Gross bookings." However, he cautioned that after the last few years, the company has learned not to take anything for granted.

"With continued rigor around costs, discipline on headcount, and a balanced capital allocation approach, all supported by our leading technical and operating capabilities, we are well positioned to deliver expanding profitability over the coming quarters," Khosrowshahi said.

The company reported a record adjusted EBITDA of $516 million, beating guidance of $440 million to $470 million and ahead of analyst estimates of $457.7 million according to StreetAccount. Gross bookings for the quarter came in at $29.1 billion, up 26% year over year.

For the fourth quarter of 2022, Uber said it expects gross bookings to grow between 23% and 27% year over year on a constant currency basis, and an adjusted EBITDA of $600 million to $630 million.

Here's how Uber's largest business segments performed in the quarter:

Mobility (gross bookings): $13.7 billion, short of analysts' estimates of $13.83 billion according to StreetAccount.

Delivery (gross bookings): $13.7 billion, short of analysts' estimates of $14.01 billion according to StreetAccount.

Uber relied heavily on growth in its Eats delivery business during the pandemic, but its mobility segment surpassed Eats revenue in its first and second quarters as riders began to take more trips. That trend continued during the third quarter, as Uber's mobility segment reported $3.8 billion in revenue while delivery reported $2.8 billion.

Uber's freight business booked $1.75 billion in sales.

The number of monthly active platform consumers climbed to 124 million in the third quarter, up 14% year over year. 1.95 billion trips were completed on the platform during the period, up 19% year over year.

Shares of Uber are down more than 36% so far this year. The stock tumbled more than 10% in October after the Biden Labor Department released a proposal that could pave the way for regulators and courts to reclassify gig workers as employees. The proposed rule could raise costs for companies like Uber, Lyft, Instacart and DoorDash that rely on contract workers to pick up shifts on their own time.

The companies have argued that flexible schedules are attractive to workers, but some labor experts and activists have disagreed, saying the companies use the contractor model to reduce their own costs and deny workers important protections.

Uber has also had to contend with high gas prices and inflation, but CEO Dara Khosrowshahi told CNBC's "TechCheck" in September that its supply side may actually be benefiting from the inflationary environment.

As expenses rise and people are paying more for essentials like groceries, he said they are also signing up to drive for Uber.

"If anything, 72% of drivers in the U.S. are saying that one of the considerations of their signing up to drive on Uber was actually inflation," he said.

Uber will hold its quarterly conference call with investors Tuesday at 8 a.m. ET.

--CNBC's Lauren Feiner contributed to this report.

cnbc.com

Share RecommendKeepReplyMark as Last Read
Previous 10