The ride-hailing company has become the latest to rein in costs in order to have a lean investment model after Facebook owner Meta Platforms Inc.
Uber Technologies Inc. will reduce hiring and spending on its marketing and promotion activities, according to a letter from Chief Executive Officer Dara Khosrowshahi seen by Reuters.
Facebook owner Meta Platforms Inc said last week that while the ride-hailing company became the latest to rein in costs thanks to a lean investment model, it would slow the growth of its workforce.
Khosrowshahi said Uber’s change in strategy was a necessary response to a “seismic shift” in investor sentiment, CNBC first reported earlier on Monday.
The report quoted Khosrowshahi as saying, “At least efficient marketing and incentive spending will be rolled back. We will treat hiring as a privilege and will discuss when and where we add headcount.” Huh.”
Uber said last week its driver base is at a post-pandemic high, and the company expects it to continue without significant stimulus investments, unlike rival Lyft Inc., which has said it needs to spend more for labor. is required.
As per a CNBC report, the company will now focus on achieving profitability on a free cash flow basis rather than adjusted earnings before interest, taxes, depreciation and amortization.
During the company’s annual shareholder meeting on Monday, Khosrowshahi addressed investors’ concerns.
“What we can do at Uber is continue to execute in terms of top line, bottom line profitability,” the CEO said, adding that the company’s results and guidance exceeded analysts’ expectations. “We share your disappointment.”
Shares of Uber have fallen more than 43% since going public in 2019.
The company expects to generate “meaningful positive cash flow” for the full year, according to its latest earnings report.
CNBC reports that Khosrowshahi said in his letter that Uber’s food delivery and freight business needs to grow rapidly.
Uber did not immediately respond to a Reuters request for comment.
(Reporting by Tanvi Mehta in Bengaluru, Additional reporting by Tina Bellone in Austin, Texas; Editing by Rashmi Aich and Aurora Ellis)
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