Uber CEO calls Massachusetts gig economy ballot measure the ‘right answer’

Uber CEO Dara Khosrowshahi expressed his support Wednesday for a ballot initiative in Massachusetts that would keep gig economy workers classified as independent contractors, fulfilling a promise he made nearly a year ago to push for laws that preserve its business model

“In the state of Massachusetts, we think the right answer is our IC+ model, which is independent contractor with benefits,” Khosrowshahi said during the earnings call with investors. “Our drivers love it. Prop 22 has proven to be incredibly popular with California drivers.”

His comments come a day after a coalition of app-based ride-hailing and on-demand delivery companies, which includes Uber, Doordash, Lyft and Instacart, filed a petition for the ballot initiative that would classify app-based ride-hail and delivery workers as independent contractors and provide them with benefits such as healthcare stipends for drivers who work at least 15 hours per week. The coalition claimed that the provision would allow drivers to earn about $18 per hour in 2023 before tips. The ballot measure, if it passes legal muster and receives enough signatures, would be included in the November 2022 election. 

Proposition 22 passed in California in November last year, a ballot measure that kept gig workers in the state classified as independent contractors. It also exempts gig companies like Uber from AB-5, the bill that entitles gig workers to self-classify as employees with usual labor protections that don’t apply to independent contractors, like minimum wage, sick leave, unemployment and workers’ compensation benefits.

Gig companies, which largely have yet to become profitable, spent $205 million in marketing for this ballot measure and made no secret about plans to do the same thing in other states. Which brings us back to Massachusetts.

Khosrowshahi said during the earnings call that the vast majority of drivers prefer the IC+ model over full-time employment. The Coalition to Protect Workers’ Rights disagreed, arguing that the ballot language has loopholes that would create a sub-minimum wage for app-based workers and that few would qualify for the healthcare support promised. It also noted that the measure would remove anti-discrimination protections, eliminates workers’ compensation rules and allows companies to cheat the state unemployment system of hundreds of millions.

“Uber has been using independence as a red herring for years,” Shona Clarkson, organizer for Gig Workers Rising, told TechCrunch. “We know that drivers do not actually have independence while driving for Uber. There is no independence in working 70+ hours a week, not being able to set your own rates, not being able to see where a ride is going and having no real control at work. The benefits promised under Prop 22 were a sham that have not materialized. As a network of over 10,000 gig workers in the state of California, we have not seen Uber drivers able to access any meaningful benefits since the implementation of Prop 22.”

Khosrowshahi said Californians voted in favor of Prop 22 because they had driver support, and he sees no reason why Massachusetts should be any different.

“We absolutely prefer a legislative outcome in Massachusetts, but if we can’t get there we’ll take it to the vote and based on what happened in California, we’re quite confident,” he said.

#dara-khosrowshahi, #gig-workers-rising, #independent-contractors, #labor, #prop-22, #transportation, #uber, #uber-drivers

Uber to become the sole owner of grocery delivery startup Cornershop

Uber has reached a deal to become the sole owner of Latin American delivery startup Cornershop, just one year after acquiring a majority stake in the company. The ride-hailing giant said in a regulatory filing Monday that it will purchase the remaining 47% interest in Cornershop in exchange for 29 million shares. The transaction is expected to close in July.

Uber announced in 2019 plans to take a majority ownership in Cornershop. That transaction wasn’t completed until the third quarter of 2020 other than in Mexico, which closed in January 2021. This latest agreement, which was reached June 18 and reported Monday, will make Cornershop a wholly owned subsidiary of Uber. The deal is a logical next-step in the Uber-Cornershop relationship, a source familiar with the matter told TechCrunch.

The deal suggests Uber’s bullishness in delivery hasn’t waned. With Cornershop as wholly owned subsidiary, Uber can beef up its grocery delivery options, a service made popular during the pandemic. The company started offering grocery delivery in select cities across Latin America, Canada and the U.S. last summer after it acquired Postmates in a deal valued at $2.65 billion. Uber CEO Dara Khosrowshahi said in a statement that the company’s grocery and new verticals business has exceeded a $3 billion annual bookings run rate for this year.

“That’s why we’re excited to deepen our commitment to the team at Cornershop and to support their vision as they scale globally,” he added. “Together, we will double down on the strategy of bringing same-day grocery delivery to the Uber platform worldwide.”

Cornershop, which is headquartered in Chile, was founded in 2015 by Oskar Hjertonsson, Daniel Undurraga and Juan Pablo Cuevas. The company expanded its operations to eight countries up and down the Americas, including Chile, Mexico, Brazil, Colombia, Costa Rica, Peru, the U.S. and Canada. The company raised $31.7 million over four rounds of funding from investors that include Accel and Jackson Square Ventures.

Uber wasn’t the only grocery service with its eyes on Cornershop; the startup was supposed to be acquired by Walmart in a $225 million deal, but it ultimately fell through after Mexican antitrust regulators blocked the deal from moving forward. It is unclear whether this deal will be subject to the same risks.

Uber faces stiff competition from grocery retailers themselves, many of whom offer delivery through partnering with startups like DoorDash or Favor Fleet.

TechCrunch has reached out to Cornershop for comment. We will update the story if they respond.

The story has been updated to include Uber’s comments.

#apps, #cornershop, #dara-khosrowshahi, #exit, #grocery-delivery, #postmates, #startups, #tc, #uber

Remote hiring startup Deel raises $156M at a $1.25B valuation after 20x growth in 2020

Many of the world’s organizations shifted to remote work due to the COVID-19 pandemic. But even as more people are vaccinated and offices are planning re-openings, it’s clear that for some organizations, remote work is here to stay. 

Deel, a startup which provides payroll, compliance tools and other services to help businesses hire remotely, has seen increased demand in the wake of this shift.

And today, the San Francisco company has announced that it has raised $156 million in Series C funding led by the YC Continuity Fund and existing backers Andreessen Horowitz and Spark Capital. Uber CEO Dara Khosrowshahi, former Stripe payments guru Lachy Groom, Jeffrey Katzenberg, Jeff Wilke, and Anthony Schiller also participated in the round, among others. 

The raise is notable for a few reasons. For one, it comes just over seven months after Deel raised a $30 million Series B financing. So it is essentially more than 5x the size of that round. It’s also a big deal because it propels Deel, a 3 year-old company, to unicorn status with a $1.25 billion valuation. The raise also comes after a massive year of growth for Deel, which says it saw a “20x” increase in revenue in 2020 with over 1,800 business clients. That’s up from 500 at the time of its September raise.

Co-founded by MIT alumni Alex Bouaziz and Shuo Wan, Deel aims to allow businesses “to hire anyone, anywhere, in a compliant manner.” It claims that by using its services, businesses can hire and onboard international employees or contractors in under 5 minutes, with no local entity required and that “paying them in 120+ currencies takes just a click.”

Deel plans to use its new capital to continue an international expansion and set up 80 new Deel-owned entities across the world in 2021. Deel also plans to do some hiring itself, and grow its product offerings. The company’s own team is entirely remote, and has grown from 7 employees to over 120 across 26 countries since January 2020. CB Insights projects the industry for virtual HR software will grow to $43 billion by 2026 as technology platforms like Deel help businesses make the transition to remote-first work.

YC Continuity’s Ali Rowghani, who has joined Deel’s board as part of the funding, believes Deel was already at the forefront of remote work pre-pandemic and that “it will be long after.”

“The way people work is fundamentally changing… the [Deel] team is uniquely equipped to remove the obstacles of remote work so companies hire the best talent in the world, instead of only those nearest to them,” he said in a written statement.

As TechCrunch previously reported, Deel today already provides various tools to employees and the organizations that they work for, such as payroll services, tax compliance information, assistance on building contracts, invoicing services and a range of insurance options covering health and other areas related to working life.

Now the plan is to continue building out that stack with more services aimed at both the workers and their employers. That includes loans based on salary for workers, more insurance and benefits options and other offerings.

#alex-bouaziz, #ali-rowghani, #andreessen-horowitz, #anthony-schiller, #ceo, #dara-khosrowshahi, #deel, #funding, #fundings-exits, #hiring, #jeffrey-katzenberg, #lachy-groom, #mit, #recent-funding, #remote-work, #san-francisco, #spark-capital, #startups, #uber, #venture-capital

Uber concedes UK drivers are workers—some drivers aren’t satisfied

Uber CEO Dara Khosrowshahi in December 2019.

Enlarge / Uber CEO Dara Khosrowshahi in December 2019. (credit: Scott Heins/Getty Images)

After a five-year legal battle to continue treating drivers as independent contractors in the United Kingdom, Uber CEO Dara Khosrowshahi wants you to believe that he is throwing in the towel.

“Our thinking on this issue has evolved over time,” wrote CEO Dara Khosrowshahi in a Wednesday op-ed for the UK’s Evening Standard. One factor that likely changed Uber’s thinking: a February ruling by the UK Supreme Court holding that drivers can’t be treated as independent contractors.

Uber says it will now guarantee that all drivers are paid at least the national living wage, which is currently £8.91 ($12.40) for those over 23. And they’ll get that rate after accounting for expenses. Uber says that 99 percent of Uber drivers already earn more than this minimum. And Uber says that’s just a floor; Uber drivers will have the opportunity to earn more if they have a busy day, just as they do today. Uber drivers will also get holiday pay and many will be eligible to participate in a pension plan.

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#cars, #dara-khosrowshahi, #policy, #uber, #uk

The toilet paper startup backed by Marc Benioff, Dara Khosrowshahi, and Robert Downey Jr. now sells paper towels

Cloud Paper, the startup whose bamboo toilet paper (and celebrity and billionaire backers including Robert Downey Jr., Gwyneth Paltrow, Marc Benioff, Dara Khosrowshahi, and Mark Cuban) made a splash last year, is getting into the paper towel racket.

Starting today, the company is taking pre-orders for its 12 pack boxes of sustainably sourced bamboo paper towels, which will retail for $34.99.

The Seattle-based company was founded by two ex-Uber employees, Ryan Fritsch and Austin Watkins, who went on to take roles at the logistics startup Convoy, before launching Cloud Paper. Their toilet paper (and now paper towel company) is one of several businesses trying to get consumers to make the switch to bamboo-based consumer products.

Cozy Earth and Ettitude sell bamboo sheets and bedding; The Bamboo Clothing Co., Thought, Tasc, Free Fly Apparel, all make bamboo clothing; and Bite has a bamboo toothbrush to go with its plastic-free toothpastes and flosses.

But (I’m quoting myself here) Cloud Paper may be the only one to get such super wealthy, high profile investors to flush it with wads of cash. Even so, companies like Grove, Tushy, Reel, and the aptly named Who gives a crap, Inc. are all angling to wipe up a piece of the $10.4 billion market for toilet paper.

The company’s founders are on a mission to make the paper industry more sustainable, according to co-founder Ryan Fritsch, and they’re looking to do it one roll at a time.

While other companies look at bamboo as a replacement for cotton or plastics, the Cloud Paper co-founder said this company is squarely focused on toilet paper and paper towels because those products make up most of the crap that’s most wasteful in the paper industry.

The company has already ordered 1 million rolls of toilet paper for production and shipped hundreds of thousands of toilet paper, but the rationale for adoption has shifted, the company said.

“It definitely had its moment when the COVID shutdowns happened,” said Fritsch. “But [consumption] shifted from a TP panic to ‘There’s an easy and convenient, sustainable, option out there.’ It’s less of an all-out craze,” Fritsch said.

No less august a body than the National Resources Defense Council has come out swinging against how much waste is sacrificed to the commode.

For instance, the logging industry in Canada degrades over a million acres of its climate-critical forest, in part to feed U.S. demand for toilet paper, according to the NRDC. Demand from the U.S. has grown so substantially that, in recent years, Canada has ranked third globally in its rate of intact forest loss—behind only Russia and Brazil—mostly due to logging, the NRDC said.

Ninety percent of that is clearcutting, which exacerbates climate change. By the most conservative estimates, “logging in the boreal releases 26 million metric tons of carbon through driving emissions from the forest’s carbon-rich soils and eroding the forest’s ability to absorb carbon,” the NRDC wrote in 2020 report. “Toilet paper’s impact is even more severe because, since it is so short-lived, it quickly releases its remaining carbon into the atmosphere. That is why, according to the Environmental Paper Network, toilet paper made from trees has three times the climate impact as toilet paper created using recycled materials.”

That’s why wiping out forested paper can be a real boon in the climate fight.

“The lion’s share of usage is number one is toilet paper and number two is paper towels, after that the size of the market really really shrinks. We’re going to be continuing on the paper space,” said Fritsch. 

The company’s next act will be working with businesses like restaurants, hotels, and even stadiums and arenas to make the swithc.

“We launched the company as a B2B company. We were working with WeWork and restaurants and the market — if you look at where our paper products were being used,” Fritsch said. “So another big focus will be building products for our commercial customers where there’s higher capacity.”

Cloud Paper box of paper towels. Image Credit: Cloud Paper

#bamboo, #brazil, #canada, #cloud-paper, #co-founder, #consumer-products, #dara-khosrowshahi, #gwyneth-paltrow, #hygiene, #marc-benioff, #mark, #paper, #plants, #plastics, #public-health, #russia, #sanitation, #seattle, #tc, #toilet-paper, #towel, #tushy, #uber, #united-states, #wework

Uber pushes into on-demand public transit with its first SaaS partnership

Uber will manage an on-demand service for Marin County in the San Francisco Bay area with a Software as a Service product as part of the ride-hailing company’s broader strategy to push into public transit.

Marin Transit will pay Uber a subscription fee to use its management software to facilitate requesting, matching and tracking of its high-occupancy vehicle fleet, starting with a service that operates along the Highway 101 corridor. Marin Transit trips will show up in the Uber app and let users book and even share rides.

Users in Marin County will see a new option called Marin Connect when they open the Uber app. The feature allows customers to book a ride on the six-seater and wheelchair-accessible vans operated by Marin Transit. Fares are $4 per mile or $3 for Marin Access riders. There is no booking fee, Uber said. The app will allow riders to share the ride if they’re traveling in the same direction. For now, the maximum occupancy is two riders.

The service will operate weekdays from 6 a.m. to 7 p.m. PDT and run down the Highway 101 corridor between Mill Valley and Novato.

The deal marks the first SaaS partnership for Uber and a likely pathway moving forward. Uber will generate revenue by offering this as a subscription. All of the fares will head directly to Marin Transit. The company, which recently offloaded its micromobility unit Jump in a deal with Lime, has reshaped its strategy as the COVID-19 pandemic has upended its business. Uber CEO Dara Khosrowshahi said during the company’s last earnings call that the company is focused on growing Eats, its food delivery business, as well as public transit.

This is not Uber’s first foray into public transit. The company already has a public transit feature called Journey Planning that is available in more than 15 cities around the world, including the Marin area since 2019. The company has also worked with Denver and Las Vegas. In 2018, Uber partnered with mobile ticketing platform Masabi to let people book and use transit tickets from within the Uber app.

This SaaS partnership with Marin Transit is a bigger push into public transit and has more potential to generate revenue if Uber can convince other transit authorities to follow suit. It also puts it in direct competition with Via, an on-demand shuttle startup that hit a $2.25 billion valuation in March 2020 following a Series E funding round led by Exor, the Agnelli family holding company that owns stakes in PartnerRe, Ferrari and Fiat Chrysler Automobiles.

Transit Authority of Marin (TAM) is also partnering with Uber to launch a first/last-mile voucher program to and from transit stops. These vouchers can be used for Marin Connect as well.

Both services will begin July 1.

#california, #dara-khosrowshahi, #denver, #food-delivery, #las-vegas, #mill-valley, #on-demand-service, #ride-hailing, #transportation, #uber

Uber appoints Pradeep Parameswaran as new head of its Asia Pacific business

Uber has appointed Pradeep Parameswaran, who oversaw the ride-hailing giant’s business in India and South Asia for two years, as the regional general manager of its Asia Pacific region operations.

Parameswaran, who starts his new role next week, will be tasked to improve Uber’s presence in the nine nations in the Asia Pacific region where the company currently operates.

“There is huge potential to serve more Uber customers and continue innovating across the diverse region, whether that be taxi partnerships in North Asia, new products like Uber Rent in Australia or pushing two and three-wheelers deep into the Indian heartland,” said Parameswaran, pictured above, in a statement.

Asia Pacific countries indeed offer a huge opportunity to Uber, which in recent years has retreated from Southeast Asia and China as the heavily backed, loss-making company struggled to compete with just as heavily backed and loss-making local startups.

Earlier this year, before the coronavirus began to spread widely outside of China, Uber chief executive Dara Khosrowshahi said the firm planned to expand in Japan and South Korea in the immediate future.

During his tenure as the chief of Uber India and South Asia, Parameswaran helped the firm grow and steer through some tough decisions in the world’s second largest internet market. Uber said earlier this year that in 2019, it handled 14 million rides each week in India.

But the company’s bet to win the food delivery market did not work in the country, despite spending millions each month to lure customers. Earlier this year, Uber sold Eats’ Indian business to local rival Zomato.

Parameswaran will be overseeing Uber’s ride business in Asia Pacific region, but not the food delivery category, a spokesperson said, adding that the firm is also running a selection process to determine a replacement for Parameswaran’s former India role.

He will also be moving to company’s yet-to-be named new headquarter in APAC. The company has said it wants to move its regional headquarters to Hong Kong, the semi-autonomous Chinese territory where the company operates in a legal grey area.

Uber hired and appointed Amit Jain as its India head and later promoted him to run the Asia Pacific business. But Jain left the company last year to join venture fund Sequoia Capital. Since then, the region has been managed by Uber team in Europe.

“We’re pleased that Pradeep Parameswaran will take on an expanded role as Regional General Manager for APAC. After capably leading our India and South Asia business since 2018, I know that he will continue to inspire Uber’s next phase of growth across this key region,” said Andrew Macdonald, SVP of Mobility and Business Operations at Uber, in a statement.

#asia, #asia-pacific, #china, #dara-khosrowshahi, #india, #japan, #southeast-asia, #transportation, #uber, #zomato

Uber Africa launches Uber Cash with Flutterwave and explores EVs

Uber is launching its Uber Cash digital wallet feature in Sub-Saharan Africa through a partnership with San Francisco based — Nigerian founded — fintech firm Flutterwave.

The arrangement will allow riders to top up Uber wallets using the dozens of remittance partners active on Flutterwave’s Pan-African network.

Flutterwave operates as a B2B payments gateway network that allows clients to tap its APIs and customize payments applications.

Uber Cash will go live this week and next for Uber’s ride-hail operations in South Africa, Kenya, Nigeria, Uganda and Ghana, Ivory Coast and Tanzania, according to Alon Lits — Uber’s General Manager for Sub-Saharan Africa.

“Depending on the country, you’ve got different top up methods available. For example in Nigeria you can use your Verve Card or mobile money. In Kenya, you can use M-Pesa and EFT and in South Africa you can top up with EFT,” said Lits.

Uber Cash in Africa will also accept transfers from Flutterwave’s Barter payment app, launched with Visa in 2019.

The move could increase Uber’s ride traffic in Africa by boosting the volume of funds sent to digital wallets and reducing friction in the payment process.

Uber still accepts cash on the continent — which has one of the world’s largest unbanked populations — but has made strides on financial inclusion through mobile money.

Update on Uber Africa

Uber has been in Africa since 2015 and continued to adapt to local market dynamics, including global and local competition and more recently, COVID-19. The company’s GM Alon Lits spoke to TechCrunch on updates — including EV possibilities — and weathering the coronavirus outbreak in Africa.

Uber in Sub-Saharan Africa continued to run through the pandemic, with a couple exceptions. “The only places we ceased operations was where there were government directives,” Lits said. That included Uganda and Lagos, Nigeria.

Though he couldn’t share data, Lits acknowledged there had been a significant reduction in Uber’s Africa business through the pandemic, in line with the 70% drop in global ride volume Uber CEO Dara Khosrowshahi disclosed in March.

“You can imagine in markets where we were not allowed to operate revenues obviously go to zero,” said Lits.

Like Africa’s broader tech ecosystem, Uber has adapted its business to the outbreak of COVID-19 in Africa, which hit hardest in March and April and led to lockdowns in key economies, such as Nigeria, Kenya and South Africa

On how to make people feel safe about ride-hailing in a coronavirus world, Lits highlighted some specific practices. In line with Uber’s global policy, it’s mandatory in Africa for riders and drivers to wear masks.

“We’re actually leveraging facial recognition technology to check that drivers are wearing masks before they go,” said Lits. Uber Africa is also experimenting with impact safe, plastic dividers for its cars in Kenya and Nigeria.

Uber Africa Nairobi

Image Credits: Uber

In Africa, Uber has continued to expand its services and experiment with things the company doesn’t do in in any major markets. The first was allowing cash payments in 2016 — something Uber hopes the introduction of Uber Cash will help reduce.

Along with rival Bolt, Uber connected ride-hail products to Africa’s motorcycle and three-wheeled tuk-tuk taxi markets in 2018.

Uber moved into delivery in Africa, with Uber Eats, and recently started transporting medical supplies in South Africa through a partnership with The Bill and Melinda Gates Foundation.

Mobility Africa

In addition to global competitors, such as Bolt, Uber faces local competition as Africa’s mobility sector becomes a hotspot for VC and startups.

A couple trends worth tracking will be Uber’s potential expansion to Ethiopia and moves toward EV development in Africa.

On Ethiopia, the country has a nascent tech scene with the strongest demographic and economic thesis — Africa’s second largest population and seventh biggest economy — to become the continent’s next digital hotspot.

Ethiopia also has a burgeoning ride-hail industry, with local mobility ventures Ride and Zayride. Uber hasn’t mentioned (that we know of) any intent to move into the East African country. But if it does, that would serve as a strong indicator of the company’s commitment to remaining a mobility player in Africa.

Ampersand Africa e motorcycle

Ampersand in Rwanda, Image Credits: Ampersand

With regards to electric, there’s been movement on the continent over the last year toward developing EVs for ride-hail and delivery use.

In 2019, Nigerian mobility startup MAX.ng raised a $7 million Series A round backed by Yamaha, a portion of which was dedicated to pilot e-motorcycles powered by renewable energy.

Last year the government of Rwanda established a national plan to phase out gas motorcycle taxis for e-motos, working in partnership with EV startup Ampersand.

And in May, Vaya Africa — a ride-hail mobility venture founded by mogul Strive Masiyiwa — launched an electric taxi service and solar charging network in Zimbabwe. Vaya plans to expand the program across the continent and is exploring e-moto passenger and delivery products.

On Uber’s moves toward electric in Africa, it could begin with two or three wheeled transit.

“That’s something we’ve been looking at in South Africa…nothing that we’ve launched yet, but it is a conversation that’s ongoing,” said Uber’s Sub-Saharan Africa GM Alon Lits.

He noted one of the challenges of such an electric model on the continent is lack of a robust charging infrastructure.

Even so, if Uber enters that space — with Vaya and others — emissions free ride-hail and delivery EVs buzzing around African cities could soon be a reality.

#africa, #african-tech, #business, #ceo, #dara-khosrowshahi, #e-motorcycles, #energy, #ethiopia, #evs, #flutterwave, #ghana, #kenya, #lagos, #nigeria, #player, #rwanda, #san-francisco, #south-africa, #tanzania, #tc, #transport, #uber, #uganda, #vaya-africa, #visa, #yamaha, #zimbabwe

Why Uber and Lyft rallied last week

Heading into earnings season, you might have expected Uber and Lyft to suffer.

After all, global travel slowed toward the end of Q1, so how could these companies have done well? Continuing the same line of thinking, given that they are both unprofitable and are valued more on growth than trailing earnings, with growth slowing would there be much to celebrate?

The answer was a resounding “yes.” Uber and Lyft both rallied toward the end of last week following their successive earnings reports.

Today, let’s go back and remind ourselves how Uber and Lyft performed against Q1 expectations and what they said about the hits they took in March (Q1) and early April (Q2). Then we’ll ask ourselves why their shares rallied despite telling investors that their businesses had begun to fall sharply in the COVID-19 world.

(And, no, the answer to everything isn’t Uber Eats. More on that at the end.)

Expectations

Lyft reported earnings first, telling investors its Q1 results on May 6. Here’s how they stacked up:

  • Lyft lost $1.31 per share against revenue of $955.7 million in Q1.
  • The firm missed expectations on profit (-$0.64 expected), and beat on revenue ($897.9 million expected).

Uber reported the next day. Here are its top-line numbers from May 7:

Uber pushes adjusted quarterly profit target to 2021

Uber has pushed its target to achieve a measure of profitability to a quarter in 2021, reversing a decision made just three months ago to move up the goal to the end of this year.

Uber will miss its target to reach an adjusted EBITDA quarterly profit in the fourth period of 2020, CFO Nelson Chai said during the company’s earnings call Thursday. The new target is a quarter in 2021.

“Our goal remains the same, returning our growth to business and achieving profitability for all of our stakeholders, which we are now planning to achieve on an adjusted basis, on a quarterly basis, in 2021,” Chai said.

Uber didn’t specify which quarter in 2021 it would reach adjusted EBITDA profitability — earnings before interest, taxes, depreciation and amortization. However, the company did say that it would be less than a year from its original target of Q4 2020.

“Reaching profitability as soon as possible remains a strategic priority for us,” CEO Dara Khosrowshahi said Thursday. “We believe that disruption caused by COVID-19 will impact our timeline by a matter of quarters and not years.”

If it feels like Uber has come full circle in a span of three months, it has. Last November, Uber said it would have a profitable quarter, on an adjusted basis, by the end of 2021. Confidence in the company swelled and in early February Uber CEO Dara Khosrowshahi moved up the profitability target by a full year to the fourth quarter of 2020.

And then COVID-19, the disease caused by the coronavirus, swept through Europe and North America. It became a global pandemic and rideshare became another COVID-19 statistic.

Uber reported Thursday a net loss of $2.94 billion in the first quarter. Uber’s adjusted EBITDA for the quarter came to a loss of $612 million. The ride-hailing company generated $3.54 billion in revenue in the first quarter, up 14% from $3.1 billion on a year-over-year basis.

Last month, and prior to the company’s first-quarter earnings report, Uber walked back its annual guidance for 2020 due to the COVID-19 pandemic. Uber withdrew its 2020 guidance for gross bookings, adjusted net revenue and adjusted EBITDA, which were provided on February 6, 2020 during the company’s earnings call. The company’s previous 2020 guidance was gross bookings between $75 billion and $80 billion, adjusted net revenue $16 billion to $17 billion and an adjusted EBITDA loss of between $1.45 billion and $1.25 billion. Uber did not provide new guidance for 2020.

#automotive, #coronavirus, #corporate-finance, #covid-19, #dara-khosrowshahi, #earnings, #earnings-guidance, #economy, #europe, #finance, #money, #north-america, #tc, #transportation, #uber

Uber may use its selfie tech to verify drivers are wearing masks

When Uber rolled out its selfie system for drivers in 2016, the ride-hailing company was focused on preventing fraud. In the future, it could be used to ensure drivers are wearing a mask.

Uber said earlier this week — CEO Dara Khosrowshahi reiterated today — that it is working through plans to require drivers and riders to wear face masks or face coverings as it prepares to ramp its ride-hailing business back up after being hobbled by the COVID-19 pandemic. The mask requirement will be issued in certain countries, including the United States.

Uber is leaning on a combination of logistics and technology to ensure when rides do ramp up that drivers are properly protected, Khosrowshahi said during Thursday’s earnings call.

“We’re shipping millions of PPE and masks, cleaning supplies etc., to our drivers to make sure that first drive, and the second, and the continuing drives, that our riders are safe and they feel safe,” he said.

Some gig workers, including those who work for Shipt, Uber, Lyft and Instacart, have complained that they are struggling to get masks, gloves and other personal protective equipment. Supply chains, which are stretched as hospitals and healthcare facilities as well as companies gearing up to bring workers back to the office, compete for this equipment.

On the technology front, Khosrowshahi honed in on its existing products.

“We are looking at technologies such as, for example, our selfie technology where we make sure that the driver who signed up is the actual driver who is driving,” Khosrowshahi said. “We can use that technology, for example potentially, to make sure that the driver is wearing a mask where appropriate.”

Khosrowshahi didn’t provide further details of when the mask requirement would begin, and when the selfie technology might be used for mask verification.

The driver selfie technology, officially known as Real-Time ID Check, is a security feature that uses Microsoft Cognitive Services. Real-Time ID Check prompts drivers periodically to share a selfie before being allowed to accept fares. The account is temporarily locked if the selfie doesn’t match the photo that Uber has on file. The aim of the technology is to prevent fraud and protect riders and drivers.

#automotive, #coronavirus, #covid-19, #dara-khosrowshahi, #driver, #microsoft-cognitive-services, #transportation, #uber, #united-states

The great unicorn retreat

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re taking stock of what’s happening to a number of unicorns, both public and private. This is the third time we’ve sat down to document what feels like a wave of unicorn cuts, capped in this case by Airbnb’s decision to cut around a quarter of its global staff (25.3%, according to provided numbers).

Airbnb’s cuts follow recent excisions at Lime, Oyo, and others. Notably the cuts are not only landing amongst the best-known unicorns. Indeed, Crunchbase News (n.b. I was once its Editor in Chief) wrote a few weeks back that 36 unicorns had cut a known 8,416 jobs, according to a layoff tracker.

The numbers are now sharply higher if we only added in Airbnb’s cuts. However, looking at the same database this morning, cuts amongst late-stage startups since the prior count was assembled include reductions at Swiggy, Deliveroo, Sisense, Magic Leap, DesktopMetal, Cohesity, and others.

TechCrunch first covered a wave of unicorn layoffs towards the start of the year, when companies backed by SoftBank’s Vision Fund were rapidly trying to curtail their costs and move closer to profitability. Suddenly their chief-backer, formerly the most aggressive pool of private capital in the world was on retreat, and it was time to batten the hatches.

Those cuts, however, felt less driven by a unicorn-wide issue and more led by quarters of overly indulgent self-aggrandizement by a number of business that ran further in the red than made sense.

The second wave of unicorn layoffs came in the early days of the COVID-19 pandemic. Well-known companies like Bird, ZipRecruiter, GetAround, Sonder, TripActions, and others cut staff as the economy rapidly changed as cities and states asked regular folks to stay home.

That post, out towards the end of March, almost looks like we published it too early in retrospect. It came before Toast dramatically cut staff or BounceX’s own layoffs. In other words, the trend we were discussing was just getting started.

So let’s talk about what’s happened since our March 30 check-in on the state of unicorn employment, and why we’re now in what could be the third wave of unicorn cuts this year.

#airbnb, #bird, #cohesity, #dara-khosrowshahi, #deliveroo, #extra-crunch, #fundings-exits, #getaround, #gocardless, #lime, #lyft, #magic-leap, #market-analysis, #oyo, #pinterest, #sisense, #softbank, #sonder, #startups, #tc, #techcrunch, #tripactions, #uber, #unicorns, #wework, #ziprecruiter

Uber pulls back from operating profit target

Uber is walking back its guidance for what was supposed to be a milestone year for the ride-hailing company that included reaching an operating profit by the last quarter.

Uber said Thursday it was withdrawing its 2020 guidance for gross bookings, adjusted net revenue and adjusted EBITDA, which were provided on February 6, 2020 during the company’s earnings call.

“Given the evolving nature of COVID-19 and the uncertainty it has caused for every industry in every part of the world, it is impossible to predict with precision the pandemic’s cumulative impact on our future financial results,” Uber said in a statement.

After a disappointing initial public offering in May 2019 and several months in retreat, Uber CEO Dara Khosrowshahi set out to reduce costs by cutting its workforce and selling its food delivery service in India to competitor Zomato . It appeared that the cost-cutting was working and Khosrowshahi moved up guidance, saying that Uber planned to make an operating profit by the final quarter of 2020. The company had previously targeted 2021 to reach an operating profit.

Uber also warned that it expected an impairment charge of between $1.9 billion and $2.2 billion because of declines in value on some of its minority equity investments. Uber has minority stakes in Didi, Grab, Yandex.Taxi and Zomato, according to its latest annual report. The one-time charge is not expected to impact Uber’s first-quarter adjusted net revenue, adjusted EBITDA, cash and cash equivalents or short-term investments, the company said.

Uber also used Thursday’s change in guidance to highlight initiatives it launched in response to the COVID-19 pandemic, including a financial assistance program for drivers and delivery people.

Uber said it plans to account for this program as Contra Revenue, which will likely reduce GAAP revenue by an estimated $17 million to $22 million in the first quarter and an estimated $60 million to $80 million in the second quarter. Uber will exclude the impact of certain COVID-19-specific expenses from Adjusted Net Revenue and from Adjusted EBITDA to “help investors assess the impact of COVID-19 on our financial position.”

The company has scheduled its first quarter earnings call for 1:30 pm PT May 7.

#automotive, #coronavirus, #covid-19, #dara-khosrowshahi, #didi, #economy, #finance, #india, #online-food-ordering, #tc, #transportation, #uber, #yandex-taxi, #zomato

Uber co-founder Garrett Camp steps back from board director role

Uber co-founder Garrett Camp is relinquishing his role as a board director and switching to board observer — where he says he’ll focus on product strategy for the ride hailing giant.

Camp made the announcement in a short Medium post in which he writes of his decade at Uber: “I’ve learned a lot, and realized that I’m most helpful when focused on product strategy & design, and this is where I’d like to focus going forward.”

“I will continue to work with Dara [Khosrowshahi, Uber CEO] and the product and technology leadership teams to brainstorm new ideas, iterate on plans and designs, and continue to innovate at scale,” he adds. “We have a strong and diverse team in place, and I’m confident everyone will navigate well during these turbulent times.”

The Canadian billionaire entrepreneur signs off by saying he’s looking forward to helping Uber “brainstorm the next big idea”.

Camp hasn’t been short of ideas over his career in tech. He’s the co-founder of the web 2.0 recommendation engine, StumbleUpon. He’s also founded a startup studio and incubator, Expa Studios and Expa Labs — which has spawned startups like Haus, which is pushing an alternative model for home ownership. More recently he’s been been building Eco: A crypto currency with an energy efficiency twist.

Meanwhile, Uber’s other co-founder, Travis Kalanick, left the company board entirely at the end of last year — having been forced out of the CEO role in 2017 following a shareholder revolt by prominent investors at the height of controversy around Uber’s toxic workplace culture.

At the time, Camp said the culture controversy at Uber had left him “upset and deeply reflective“. And he backed replacing Kalanick as CEO — helping to bring in Khosrowshahi, who remains at Uber’s helm.

Ryan Graves — Uber’s first employee and first CEO — also left the board last year, shortly after the IPO.

We’ve reached out to Uber for comment on the latest board change.

#apps, #collaborative-consumption, #dara-khosrowshahi, #expa-labs, #expa-studios, #garrett-camp, #personnel, #ryan-graves, #transportation, #travis-kalanick, #uber