“Our hope with these changes is to reset and improve how we work day to day—ruthlessly prioritizing, and always holding ourselves accountable to a high bar of performance and agility,” an Uber spokesperson told Techcrunch.
Uber’s business model is heavily dependent on cheap labor, has few network effects, and achieves insufficient efficiencies from scale.
The company acknowledged as much in its S-1 filing earlier this year, which stated that Uber will “will need to generate and sustain increased revenue levels and decrease proportionate expenses in future periods to achieve profitability in many of our largest markets, including in the United States, and even if we do, we may not be able to maintain or increase profitability.” That was just one of many red flags in the company’s I.P.O.
On a more fundamental level, investors remain concerned about the viability of the company’s plan to replace human drivers with self-driving cars—a moonshot technology that could be a decade away.
But the path to profitability remains murky; also on Tuesday, the California Senate approved a bill that would force gig economy companies like Uber and Lyft to classify their contractors as employees, entitling workers to protections such as overtime pay and a minimum wage.
That’s a win for workers, who have been vulnerable to exploitation , but will increase labor costs for Uber at the very time it is seeking to stop the bleeding.
- Uber lays off another 435 people to stem big lossesArs Technica
- Apple's making some announcements! Quick, lay off 435 Uber workersThe Register
- Uber fires over 400 employees as company continues to bleed moneyBusiness Today
- Uber lays off 435 more employees from its engineering team in wake of Q2 2019 lossFirstpost
- Uber layoffs were foreshadowed in early August 18% hiring cutsThinknum Media (blog)
- Facing Heavy Losses, Uber Fires 435 Employees From Products And Engineering DepartmentsIndia.com News
- Uber Lays Off More Staff as It Seeks a Route to ProfitNDTV
- Uber trims more staff as it seeks a route to profitRaw Story
- Uber fires over 400 employeesStuff.co.nz