On Wednesday, June 8, Uber Technologies Inc CEO Dara Khosrowshahi stated that ride-hailing company is ‘recession resistant,’ and does not witness the necessity for job cuts. The chief executive specified how this is the case despite the volatile market and the possibility of a global recession which tech companies could face.
During an interview this week, Khosrowshahi specified how the ‘signal on the street’ is how aspects of the company are very ‘strong.’ Additionally, he stated how the expenditure on services goes to be significantly ‘robust.’ These positive comments comes following the CEO informing the employees last month that the company would consider hiring ‘a privilege and be deliberate’ regarding ‘when and where we add headcount.’
On the other hand, its competitor Lyft stated that it plans to slow hiring and cut expenditure. Clearly, the current economic atmosphere has contributed to the challenges for Uber, continuing since the pandemic. However, it had the ability to rely on its food delivery business which flourished at the time, unlike Lyft.
As the chief executive works to get Uber out of the pandemic, its main strategy has been to capitalise on the boom through delivery business. Essentially, this would be through expansion into other categories such as alcohol, grocery, convenience-store goods, along with turning its app into more than just ride sharing.
Uber’s new business ventures:
In May, Uber came up with the Uber Charter service intended for booking coaches and shuttles for bigger groups through the app. Additionally, it came up with Uber Travel which gets together bookings for flight, hotel and restaurant, allowing people in the US and Canada to book rides for their elaborate trips. Uber is piloting a service in the UK which allows users to book long-distance travel in the app.
Despite the recovery in ride demands, both Lyft and Uber have not been sufficiently able to attract drivers. This disparity has given rise to high fares and longer wait periods for riders. Moreover, the hike in gas prices owing to the Ukraine war added to the blow companies faced.
Additionally, Khosrowshahi stated that Uber had seen an 78% increase in driver supply last month as compared to 2021. However, it would continue the surcharge on rides for fuel in order to ease the burden of gas prices on drivers’ salaries. Moreover, he added how Uber would possibly look to exit its 11% stake worth $1.4 billion in Didi Global Inc as the Chinese firm relists in Hong Kong.
“As we see our sessions increasing, demand increasing, and as we see supply increasing, essentially the marketplace will start to come into more balance,” Khosrowshahi said. “You’ll see less surge and you should see prices moderate.”