In a letter to employees, Dara Khosrowshahi, CEO, Uber, has emphasised on what is going to be the way forward from now on at Uber. Khosrowshahi has pressed on cost cutting and increasing profitability at the company.
As part of this strategy, Khosrowshahi has signalled that the Company would see a slowdown in the hiring intent. In the letter Khosrowshahi writes, “We will treat hiring as a privilege and be deliberate about when and where we add headcount.”
Further, Khosrowshahi has stated that the company will also look to cut down costs on least efficient marketing and incentive expenditures. “Some initiatives that require substantial capital will be slowed. We have to make sure our unit economics work before we go big. The least efficient marketing and incentive spend will be pulled back,” says Khosrowshahi.
In the letter, Khosrowshahi mentions that he has been meeting investors and they have been very clear to the Company that Uber will need to show them money. Post Uber’s January and March quarter ending, the Company has registered a loss of $5.9 million. Khosrowshahi writes that the investors have suggested that the market is seeing a seismic shift and Uber needs to act accordingly.
The investors have expressed to the CEO that they do see a large addressable market in the ride hailing sector but they do not understand how it will translate into profit and free cash flow, and that they expect Uber to show them.
Uber will focus on onboarding more customers either on the ride-hailing platform or the food-delivery services platform and hold on to them through various membership programmes that the Company has to offer.