That said, I've seen a number of layoff announcements from CEOs recently where there have been a number of "Wow, really great job announcing those layoffs" comments. And, while I agree with that, part of me thinks that we've become so conditioned to especially shitty layoff announcements and corporate double speak that when someone does something that really shouldn't be that difficult (speak with empathy, genuineness, but clarity on what must be done, and treat employees who are leaving well) that we're all particularly impressed.
I'm in no way saying layoffs are easy, and I know many good CEOs who agonize over those decisions. At the same time, I think we should try to raise our expectations of how employees should be humanely treated.
This is only one sentence in an otherwise fairly measured email, but it nevertheless annoyed me given the context. Uber is not an "essential service". They made this decision so that they can stay in business to make money for their shareholders. Portraying it as something noble is more than a little tone-deaf.
I feel for the people affected and I hope they find new roles soon.
Pre-Uber days, here's what it took to get an auto-rickshaw (also called "auto"): you walk up to the "auto stand" where you see some auto drivers lounging. As they see you walk up, they size you up; and immediately jack up the prices they're going to quote you as they see you don't seem a local. If you turn one of them down, the others will simply refuse to talk to you or even look at you. Then your best bet is to keep walking, looking for an idling auto driver.
Post-Uber world: pull up the app, enter the destination address, and watch as the car approaches your location. Hop in, driver is incentivized to get you there as quickly as possible. Hop off at the destination, give him 5 stars, and you're on your way. Simple as that.
For me, Uber was always an essential service in India.
Even with the highly publicized Uber failures, no Uber I've ever taken has been worse than many of the cabs I was in prior. Something as simple as knowing the price up front has been key when traveling.
So sure, of course they want to stay an ongoing concern. But, services like Uber and Lyft have become essential to many people.
She doesnt drive following a car wreck. She had walk half a mile to wait out in the bitter rocky mountain cold at a bus stop to go to the Dr. Shes on social security. She told me she didnt have the money to take a cab, that is if she could even get a hold of one.
Then uber came along.
She learn to use uber on her own before even whatsapp.
Yea, I'd call it downright essential.
I agree given no other contexts, but let me refute anecdotally: Brazil for instance has become socially and economic dependable over Uber continuous success. Current situation goes like this:
- Brazil has about 1 million rental cars. Uber drivers have already returned 80% of their vehicles [1][2]. Rentals are down 90%. As cities are beginning to announce harder lockdowns, these will only go further down. [3]
- Rental companies stopped buying new cars for at least a year [4]. At least that matches the fact that almost no new cars are being made since March.[5]
- Rental companies buy directly from manufactures, they're almost half of their sales [6]. And app drivers are a big chunk of their customers.
- Car manufacturers are a big slice of every State's taxes they're in. Less car sales, thousand more layoffs. (lacking links here, sorry)
IMHO, to sum up: at least here, to any politician or car-related executive, Uber success is critical.
[1] https://www.jornalcruzeiro.com.br/sorocaba/locadoras-de-carr... (pt-br) [2] https://www.bol.uol.com.br/noticias/2020/03/23/coronavirus-s... (pt-br) [3] https://www.infomoney.com.br/mercados/sem-servico-160-mil-mo... (pt-br) [4] https://www.uol.com.br/carros/colunas/autodata/2020/05/15/lo... (pt-br) [5] https://revistaautoesporte.globo.com/Noticias/noticia/2020/0... [6] https://www.blogdaslocadoras.com.br/locadoras-de-carros/reco...
That said, the barrier to entry for an Uber-like service is quite low, so if Uber vanished from the face of the Earth it wouldn't take more than about a month to re-create it.
You are completely twisting the label of an essential service in a way that makes it effectively meaningless. For every worker that depends on their salary for their livelihood, their job is essential, but that has nothing to do with an "essential service".
When you are working 10-12 hours a day to make ends meet and shoulder the all costs of the depreciating fix assets there is very little opportunity dig yourself out of that hole.
Uber and similar companies are destroying the very small businesses (or squashing their margins into nothing) which traditionally are the environment that the poor can become entrepreneurs and build their own local business.
Walk me through what folks without good car / transit access should be using? If cab companies are "essential" then uber is essential and preferred to cab companies in many markets.
A lot of folks on HN seems to be approaching this whole situation from the I have a ton of money, can work from home, have a car mental model.
I suspect buying a reasonable used compact car is much more financially prudent than using Uber as you means of transportation. Maybe the calculus flips in a dense city like NYC but there's no way people who commute every day with Uber are doing so for cheaper than actually owning a car.
Most of the time I could take a bus or public transit, but when I couldn’t (like buying groceries) then I’d use an Uber. It was significantly cheaper versus owning a car, and it was absolutely an “essential” service at that point in my life.
Yes there is: Public transportation (bus, metro, train). Millions of people get to work using it every day. Just having a car sit on the street would cost me at least 100$ per month in taxes, insurance, parking and other misc costs. I spend much less on public transportation.
Most people live in dense cities so these services exist. I almost only use Uber/taxis when I need to go to places that are hard to reach or at night.
I mean, it's not a luxury good in the sense that you can buy a car, but I suspect many folks have made difficult or expensive to unwind decisions that make car ownership expensive. Classifying transportation where an alternative may well cost more than $1k/mo as a "luxury good" is a real stretch of the word luxury.
I think my point is being missed though and that is that using Uber as your daily commute is certainly not cheaper than owning a car. I think that's perfectly reasonable to say.
Also I don't mean to imply that Uber is a luxury in the same way Lois Vuitton is a luxury.
In my examples in other comments using Uber as a daily commute option almost certainly costs nearly 1000 or more per month.
Transporting large items, or groceries for an entire family are extremely difficult if not impossible over public transportation. Transporting a group of people (3+) can be approximately the same price on public transportation and Uber without potentially sacrificing comfort, safety, time and effort, many of which can be essential depending on your circumstances.
The cost of using Uber and Public transportation also requires a lot less upfront cost which is necessary for people living paycheck to paycheck and can't afford to spend around $2k on a car, as well as deal with it's maintenance time and cost.
Literally folks with cars are telling folks without cars (but who use uber when needed) that uber is not necessary (ie, partial access to a car is not needed) while they have 24/7 access.
Anyone who has NOT owned a car will tell you - uber is essential - full stop.
30% of the population has HOUSEHOLD income from all sources of $30K or less. The cost of parking alone can be a major issue (many cheaper apts do not have dedicated parking).
I don't have a car and hopefully never will. I never used an Uber or any similar service. I used taxi maybe 2 or 3 times in the past few years.
It is extremely easy to live without a car if the city / country accommodates for it.
Believe it or not, there are people out there who don't have $2000 and these people are also the same ones who can't get anyone to lend them money.
But then I'd have to park it, and just that would double the monthly cost. And then I'd probably use it once a month on average.
A taxi service is an essential complement to mass transit, and Uber provides that service in areas with poor taxi service (essentially everywhere).
How much would it actually cost to commute 20-30 minutes to and from work in an Uber? $40 a day? More? Let's just say its 40 and you strictly commute during the week so that's $200 a week or 800 a month. Even with bad credit or no credit you would be able to save for a car rapidly. The $2000 car would only take 10 weeks to pay for fully in cash and the savings of 800$ per month could easily cover maintenance.
My point is if you can afford to use Uber as your sole means of transportation you can surely afford your own car and the people who can't are using subways or Buses. It's pretty simple, people who are struggling aren't using Uber very often.
It also discounts the horrible stress that adding a known monthly bill can cause, when Uber is more flexible, pay-what-you-need. And I was never as bad as many others, so I can see how the least-prepared and least-financially-secure could see Uber as a viable use, either once-in-a-while (e.g., missed the bus), or for regular use (paying $12 for a two-way, 1 mile trip through a crappy part of town can pay for itself if you avoid an hour of walking and get an hour of working).
You think poor people are using Uber to get around?
I think you have me mistaken for someone else. I don't have any of those things. Not even close.
is uber cheaper than cabs/public transpo w/o the VC subsidy? 15 years ago there was no uber and people were able to get by using public transpo.
uber loses money on every ride because uber loses money overall because it spends a lot of money on other projects, not because the marginal cost/benefit of each ride is negative.
Ridesharing services allow for an unprecedented level of mobility for those who don't already own cars.
The World Wide Web was invented only 30 years ago, yet it's arguably the single most essential service during this time. Without it, social distancing while keeping large parts of the economy alive wouldn't have even been an option.
At the rate technology is becoming embedded into our daily lives, I think an arbitrary number of years is definitely not the way to decide whether something is essential. Context matters. What if instead of a pandemic that affects the lungs, the next one affects older people's ability to walk? Not very hard to imagine Uber being considered a 100% essential service at that point.
Useful? No. Effective? No. Meaningful? No. But definitely simple.
By those measures BTW, antibiotics, modern sewers and (for the most part) vacinations aren't essential.
And indeed they aren't, for the survival of the human race. They are, however, very important for the survival of individual humans.
Hopefully it doesn’t come to that but who knows.
Wonder where the new APAC hub is? Could it be Hong Kong? They have had the unrest issues but haven't been impacted much by covid, relatively speaking.
I'm just curious, did you take the time to add the emphasis here, or did the original email have the word "everyone" surrounded by asterisk characters?
Lucky for you that this is an option. For many people less fortunate than yourself it is not an option and they rely on taxis such as Uber.
They can't afford not to!
> I am happy to walk a while to get to the closest bus stop so I can get to the tube.
You're lucky that you have access to walkable pavements, busses, and a tube. That's a lot of privilege! I'd sure they'd be happy to use those as well! But many people don't have access to those things, and if they want to get anywhere they need to pay taxis.
If I want to get somewhere outside my village in less than a couple of hours I'd have to use a taxi or drive.
But if you go to for example some parts of the US, they literally don't even have pavements let alone busses, let alone tubes.
They can't even walk to their local shops in some cases. They're trapped without a car or taxi.
Yes, one of the reasons you mention is why I never accepted a job in the US as I would be stuck!
Any company that facilitates or provides an in-person service that has seen a sharp decline from Covid-19 is pretty clearly not an essential service in the minds of their customers.
And precisely because public transport IS essential we still had all of it running, just at a reduced capacity to facilitate the essential public demand. So comparing public transport with Uber only highlights even more how Uber is non essential, because we can live pretty much without it, but we evidently can't without public transport (as seen in London).
I would argue some portion of the accommodations industry is essential (avg. occupancy rates of around ~%60 in normal times, so let's say ~%60 of hotels/motels are essential) and yet I know multiple hoteliers who have had to close shop for the next few months due to zero volume. This doesn't mean that day-to-day, hotels aren't an essential service.
The full email:
Team Uber:
These have been unprecedented and challenging times for everyone—our societies, our governments, our families, our economies, all around the world. They’ve also been challenging for Uber, and many of you, as you’ve waited for us to define the road ahead. I’ve said clearly that we had to take tough action to resize our company to the new reality of our business, and that I would come back to you this week with the specifics.
Today I have the specifics: we have made the incredibly difficult decision to reduce our workforce by around 3,000 people, and to reduce investments in several non-core projects. As a leadership team we had to take the time to make the right decisions, to ensure that we are treating our people well, and to make certain that we could walk you through our decision making in the sort of detailed and transparent manner you deserve.
Where we started and hard choices
We began 2020 on an accelerated path to total company profitability. Then the coronavirus hit us with a once-in-a-generation public health and economic crisis. People are rightfully staying home, and our Rides business, our main profit generator, is down around 80%. We’re seeing some signs of a recovery, but it comes off of a deep hole, with limited visibility as to its speed and shape.
You’ve heard me say it before: hope is not a strategy. While that’s easy to say, the truth is that this is a decision I struggled with. Our balance sheet is strong, Eats is doing great, Rides looks a little better, maybe we can wait this damn virus out...I wanted there to be a different answer. Let me talk to a few more CEOs...maybe one of them will tell me some good news, but there simply was no good news to hear. Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option.
I knew that I had to make a hard decision, not because we are a public company, or to protect our stock price, or to please our Board or investors. I had to make this decision because our very future as an essential service for the cities of the world—our being there for millions of people and businesses who rely on us—demands it. We must establish ourselves as a self-sustaining enterprise that no longer relies on new capital or investors to keep growing, expanding, and innovating.
We have to take these hard actions to stand strong on our own two feet, to secure our future, and to continue on our mission.
I know that none of this will make it any easier for our friends and colleagues affected by the actions we are taking today. To those of you personally impacted, I am truly sorry. I know this will cause pain for you and your families, especially now. Many of you will be affected not because of the quality of your work, but because of strategic decisions we made to discontinue certain areas of activity, or projects that are no longer necessary, or simply because of the stark reality we face. You have been a huge part of this company and every day forward we will build on the foundations that you established, brick by brick.
Our decisions and the road forward
We have decided to re-focus our efforts on our core. If there is one silver lining regarding this crisis, it’s that Eats has become an even more important resource for people at home and for restaurants; and delivery, whether of groceries or other local goods, is not only an increasing part of everyday life, it is here to stay. We no longer need to look far for the next enormous growth opportunity: we are sitting right on top of one. I will caution that while Eats growth is accelerating, the business today doesn’t come close to covering our expenses. I have every belief that the moves we are making will get Eats to profitability, just as we did with Rides, but it’s not going to happen overnight.
So we need to fundamentally change the way we operate. We need to make some really hard decisions about what we will and won’t do going forward, based on a few principles:
We are organizing around our core: helping people move, and delivering things.
We are building a cost-efficient structure that avoids layers and duplication and can scale, at speed.
We are being intentional with our location strategy focused on key markets/hubs.
Mac will now lead a unified Mobility team, which will include Rides and, as of today, Transit. Mac will continue to manage our cross-cutting functions like Safety & Insurance, CommOps, U4B, and Business Development, the latter of which will be centralized across Rides, Eats, and Freight under Jen. Pierre will lead what we will call “Delivery” internally, encompassing Eats, Grocery and Direct.
Given the necessary cost cuts and the increased focus on core, we have decided to wind down the Incubator and AI Labs and pursue strategic alternatives for Uber Works. Due to these decisions, Zhenya has decided it makes sense to move on from Uber. Zhenya is customer-centric to her core, and I am deeply grateful for all of her hard work.
We are also looking at our geographic footprint. While it served us well for many years to cast a wide physical net, it’s time to be more intentional about where we have employees on the ground. We are closing or consolidating around 45 office locations globally, including winding down Pier 70 in San Francisco and moving some of those colleagues to our new HQ in SF. And over the next 12 months we will begin the process of winding down our Singapore office and moving to a new APAC hub in a market where we operate our services.
Having learned my own personal lesson about the unpredictability of the world from the punch-in-the-gut called COVID-19, I will not make any claims with absolute certainty regarding our future. I will tell you, however, that we are making really, really hard choices now, so that we can say our goodbyes, have as much clarity as we can, move forward, and start to build again with confidence.
How we are helping departing employees
As we previewed last week, we have taken a lot of feedback and worked to provide strong severance benefits and other support for those leaving Uber, like healthcare coverage and an alumni talent directory. We’re also taking care to support people in special situations a bit differently, like those on US visas or parental leaves. While the details will differ slightly by country, you can see a summary here. Every departing employee will have a 1:1 to receive the details of their individual package.
Given the global nature of these changes, and the local rules and regulations involved, the individual experience today will vary by country:
All other countries (those not listed to the right)
Argentina, China, France, Germany, India, Ireland (COE only), Italy, Kenya, Netherlands, Norway, Pakistan (Karachi only), Poland, Portugal, Slovakia, South Africa, Spain, Turkey, UK (ULL only)
In these countries, we can communicate about individual impacts today.
Everyone in these countries who is affected has already received an email, and will soon have a calendar invitation to a private meeting with a manager and HR.
If you are in one of these countries and you did not receive a separate email this morning, you are not affected.
In these countries, local laws mean that we cannot be as specific about individual impacts today.
In some countries, we will start a consultation process. In others, there are restrictions on making changes during the COVID lockdown.
If you are in one of these countries, you will get an email from Nikki describing next steps for your location.
If you are one of the many affected Uber teammates, I’ll acknowledge right here that any package we offer, regardless of how thoughtful or generous, will never replace the opportunity to belong, to make a difference, to establish the kinds of bonds you establish with any important company or cause. We wouldn’t be here without you. We will finish what you started, and we will be excited to see the great things that you will build next.
I am incredibly thankful to everyone reading this email, because the resilience and grit you’ve shown has made Uber the company it is and will continue to be. I’ve never had a harder day professionally than today, but Uber has consistently surprised me with the challenges it has thrown my way. But it’s the toughest challenges that are worthwhile, and I know even more strongly in my heart than I ever have that Uber is worth it, and more.
Dara