Uber trims a quarter of its India workforce, lays off 600 employees

Uber India on Tuesday announced it was laying off 600 of its employees – a fourth of its total headcount of 2,400 in the country – across customer & driver support, business development, legal, finance, policy and marketing verticals.
The retrenched employees would be paid 10 to 12 weeks of salary, besides medical insurance coverage for the next six months and outplacement support, the company said. These staffers would also be allowed to retain their laptops and given the option of joining the Uber talent directory. “Today is an incredibly sad day for colleagues leaving the Uber family and all of us at the company. We made the decision now so that we can look to the future with confidence. I want to apologise to departing colleagues and extend my heartfelt thanks to them for their contributions to Uber, the riders, and the driver partners we serve in India,” said Pradeep Parameswaran, Uber president for India and South Asia, confirming the development.

Dara KhosrowshahiIn back-to-back announcements this month, Uber CEO Dara Khosrowshahi said the company would retrench 25 per cent of its 27,000-strong global workforce to save $1 billion. Photo: ReutersThe move is part of the global restructuring plan announced earlier by Uber Chief Executive Dara Khosrowshahi in view of the company’s stressed fortunes amid lockdowns in several countries, including India, to prevent the spread of coronavirus. These restrictions, according to the CEO, had led to an 80 per cent year-on-year decline in Uber’s global business in April. For the January-March quarter of 2020, the company announced a $2.9-billion loss, its biggest in three quarters. Uber had earlier advanced its target of achieving a measure of profitability by a year, and was hoping to be in the green by the fourth quarter of 2020.
In his back-to-back announcements this month, the CEO of the embattled vehicle aggregator said the company would retrench over 6,700 employees, or 25 per cent of its 27,000-strong workforce, across the globe, in a bid to save $1 billion. India accounts for around eight per cent of its total global employee strength.
Uber has been pushing hard to turn profitable in India, one of its key markets. It has divested itself of some non-core businesses to concentrate on transportation. In January this year, it sold its food delivery business Uber Eats to Zomato to cut its losses, in exchange for a 9.9 per stake in the latter. As many as 245 employees were affected by the deal and were kept on rolls of the company only for a short duration. The company also withdrew offers made previously at management institutes across the country, in a clear indication that it was looking to reduce headcount.
Even as it faces stiff competition in the country from arch rival Ola, Uber maintains it has category leadership in the Indian market. Recently, Ola also announced it was laying off over 1,400 employees. Both Ola and Uber have a common investor in Softbank.
Uber India’s operations have been hit severely by the nationwide lockdown, imposed first on March 24 and extended thrice until May 31. However, the company has sought to limit the damage through innovations like Uber Medics, a transportation service for health workers across cities in collaboration with the National Health Authority. It has also tied up with companies like Flipkart to offer last-mile delivery through cab drivers. With some relaxation in lockdown rules since May 18, Uber has also resumed its services in 50 of the 70-plus cities that it operates in.

Uber sells its India food delivery business to Zomato in all-stock deal

Uberon Tuesday announced the sale of its food delivery business in India to Zomato in an all-stock deal.
Uber will get a 9.9 per cent stake in Zomato as part of the deal whose size has not been disclosed. The deal for Uber Eats, which operates in 41 cities, was signed at 3 am, and its customers will be shifted to the Zomato app from 7 am.
Around 245 Uber Eats employees will be affected by the deal. However, sources in Uber India say they will be in the pay rolls till March 31 and that the company is making every effort to absorb some of them and provide support to the rest in finding jobs.
The deal is applicable only in India and Uber Eats will continue to operate in Bangladesh and Sri Lanka. According to sources the deal value is around $300- 350 million.

“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” said Deepinder Goyal, CEO of Zomato.
Sources said the move is part of Uber’s strategy to be either number one or two in each of their businesses in every country they operate. In India, Uber Eats grew very quickly to take a 12 per cent share of the food delivery market. However, while India constituted for 3 per cent of the global gross booking of Uber Eats it also constituted for 25 per cent of its global EBITDA losses for the business segment. Intense competition in India’s food delivery market prevented India Uber Eats from taking either the first or second position, which are with Zomato and Swiggy.
The move to double down in India will help Uber Inc to improve the financials of Uber Eats.
Uber is concentrating on making its cab hailing business in India profitable and will expand of its network within the country from 50 cities to 200 cities this year.
“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success, ” said Dara Khosrowshahi, CEO of Uber.
The move is expected to push Zomato to the top slot in this space, pushing down Swiggy.

Travis Kalanick cuts all ties with Uber; leaves board, sells all shares

UberTechnologies’ former chief executive officer (CEO) Travis Kalanick is stepping down from the board, severing his last ties to the company he co-founded a decade ago and helped become one of the world’s most valuable, and controversial, start-ups.
Kalanick, 43, has sold all of his remaining shares in the ride-hailing giant and plans to focus on his new business and philanthropic endeavours.

Along with co-founder Garrett Camp, Kalanick started Uber in 2009, building the company up from an experimental black car service in San Francisco to a global transportation and logistics company, offering food delivery, freight shipping, helicopter rides and ushering in a new era of work. But he was ousted as CEO in June 2017 following months of chaos and controversy. Detractors pointed to his aggressive and sometimes reckless management style as breeding a toxic workplace hostile to women and overseeing morally questionable company programmes, including some that intentionally deceived regulators and law enforcement agencies and spied on riders.
“Uber has been a part of my life for the past 10 years,” Kalanick said in a statement Tuesday. “At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits.”
For the past year, Kalanick has been building a new startup: CloudKitchens. The real estate company offers fully outfitted kitchens to restaurants that need more space to fulfil orders from take-out food services like DoorDash and Uber Eats. Along with using his own funds, Kalanick also raised $400 million from Saudi Arabia’s sovereign wealth fund.
Following Kalanick’s departure as CEO, the board replaced him with Dara Khosrowshahi, a former executive of Expedia, who has worked to rebuild the company’s reputation and promise to investors. Since its initial public offering in May — one of the worst IPOs this year — Uber shares have cratered by more than 30 per cent. They were up 1 per cent at 12.04 pm in New York.
With Kalanick fully separated from Uber now, Wedbush Securities analysts said it could help the stock, since his continued presence on the board was a “distraction.”
“With ripping the band-aid off and Travis leaving stage left on the board, we believe now it’s about Dara & Co. taking Uber in the right direction for 2020 and beyond after a rough road so far,” wrote Wedbush analysts Ygal Arounian and Dan Ives, adding that the massive sell-off of shares following the November 6 lock-up expiry has also hurt the stock price.
Kalanick has been steadily unloading his Uber shares in the past few weeks. He sold the remaining 5.8 million shares before resigning from the board Monday night, a spokeswoman said, for a grand haul of almost $3 billion, according to calculations by Bloomberg. Before the lock-up expired, Kalanick held a 6 per cent stake in Uber, which made him the firm’s largest individual shareholder. Softbank Group and Benchmark Capital are the company’s two largest institutional shareholders.
Such a sell-down is unusual among prominent tech tycoons. Facebook’s Mark Zuckerberg and Amazon.com’s Jeff Bezos still own sizeable stakes in their companies. Still, neither of them were ousted by a boardroom coup. And Kalanick’s sales mean he has plenty of financial firepower for his other projects. He created a fund called 10100 in March 2018, saying in a tweet it would focus on his “passions, investments, ideas and big bets.” The fund will handle Kalanick’s for-profit investments and philanthropy and plans to invest in real estate, e-commerce and emerging innovation in China and India, according to its website.
“Very few entrepreneurs have built something as profound as Travis Kalanick did with Uber,” Khosrowshahi said. “I’m enormously grateful for Travis’s vision and tenacity while building Uber, and for his expertise as a board member. Everyone at Uber wishes him all the best.”
Kalanick’s departure from Uber’s board will be effective Dec. 31, according to a statement Tuesday. Uber’s 12-person board has steadily shrunk since the company went public in May and now will have four openings.

A few days after going public, Uber fights to get its edge back

A few days after Uber went public in May and its stock fell into a tailspin, the ride-hailing company’s chief executive, Dara Khosrowshahi, sent a rallying message to employees.
“There is one simple way for us to succeed — focus on the work at hand and execute against our plans effectively,” Khosrowshahi, 50, wrote to staff in a May 13 email. “We simply would not be here without you.”
Since then, Khosrowshahi’s message has steadily become tougher.
Faced with questions about whether Uber can make money amid a souring environment for unprofitable tech firms, Khosrowshahi has laid off more than 1,000 workers in three rounds of job cuts. He has ousted some top executives, and board members have left. And in recent emails to employees, he has said Uber’s teams are “too big,” are producing “mediocre results” and that the company “needs to get its edge back.”

Inside Uber, managers are quibbling over expense reports and tighter budgets, according to four current and former employees who declined to be named because they were not authorised to speak publicly. Executives have asked employees to suggest perks they are willing to give up. Some workers have been told they need to stretch themselves even thinner in the wake of layoffs.
Employee frustration over the belt-tightening has been compounded by Uber’s declining stock price, which is about 30 percent below the company’s $45 initial public offering price. That affects how much some workers will reap from their company stock when a so-called lockup period on insider sales of the shares ends on Wednesday.
It all adds up to a difficult few months for the most prominent tech company to go public in 2019. An IPO was supposed to be a crowning moment for Uber, but its tribulations show that the aftermath has been far from easy, putting Khosrowshahi on defence and under pressure to outperform.
Uber faces another test on Monday when it is scheduled to report its latest financial results. The company, which posted a record $5.2 billion quarterly loss and slowing growth in August, is expected to have a $1.5 billion loss this time and about 22 percent revenue growth, according to FactSet. At least one Wall Street analyst has publicly called Uber’s performance a “horror show.”
“They need to show to the market that underneath this pile of massive losses, there’s actually a really attractive business model,” said Mark Mahaney, an analyst at RBC Capital.
“First is, show us the profits. Second, it’s show us the growth.”
Uber declined to comment or to make Mr Khosrowshahi available for an interview, citing a quiet period before earnings.
The challenges have been coming nonstop for Mr Khosrowshahi. When Uber went public on May 10, its stock immediately tanked, in an embarrassment for the heavily hyped offering. At the end of May, Uber reported a quarterly loss of $1 billion, renewing questions about whether the ride-hailing service could ever turn a profit.
In June, Mr Khosrowshahi moved to take more control of Uber’s day-to-day operations. That month, he ousted his chief operating officer, Barney Harford, who he had previously worked with at travel site Expedia and who he had personally recruited to Uber. He also forced out his chief marketing officer, Rebecca Messina.
Two Uber board members — Arianna Huffington and venture capitalist Matt Cohler — stepped down in July. Days later, Mr Khosrowshahi laid off 400 people from marketing, or about a third of the division. That was when he began telling employees to do better, saying in a staff memo, “We can do more to keep the bar high, and expect more of ourselves and each other.”
Mr Khosrowshahi started more directly managing some of Uber’s businesses, including the Uber Eats food delivery division, said two people familiar with the situation. At divisions like Uber Eats and Uber Freight, its shipping business that pairs truck drivers with freight that need to be transported, managers pushed employees to land deals with flagship brands to bolster revenue, current and former employees said.
In August, Uber posted the $5.2 billion loss, which Mr Khosrowshahi called a “once-in-a-lifetime” figure. Afterward, Nelson Chai, Uber’s chief financial officer, sent an email to staff titled “#FindTheMoney.” It asked employees to suggest perks they would part with and congratulated one employee on an idea to cut celebratory balloons from the budget, saving the company’s San Francisco headquarters $200,000. Mr. Chai’s email was earlier reported by Crunchbase News
That same month, Mr. Khosrowshahi told Bloomberg, “We are going to be demanding our employees do even more with less.”
chartKhosrowshahi began holding a new kind of employee meeting in August, called “Global Tech Days.” In the all-day meetings, which are set to take place monthly, he reviewed Uber’s progress in detail with teams, according to employees. The gatherings often stretched late into the evenings, with participants required to sort out the problems raised in the meeting before they departed.
In September, Uber laid off 435 employees, mostly in its product development and engineering teams. “It’s critical we get our edge back and continually push ourselves to do better,” Mr. Khosrowshahi said in a note to employees at the time.
That same day, Uber faced a new hurdle when California legislators voted to pass a bill that would effectively force the company to treat its drivers, who are contractors, as employees. A reclassification of drivers could significantly ratchet up Uber’s costs because it does not pay contractors full-time benefits.
Uber has said its drivers would not be affected by the new California law, which takes effect on Jan. 1, because its core business is technology and not rides. It has backed a ballot initiative to carve out gig economy companies from the law.
To rev up growth, Uber has introduced new business initiatives. In September, it unveiled a new version of its app that combined rides and food delivery to emphasize its multiple services. In an interview at the time, Mr. Khosrowshahi said Uber was becoming an “operating system for your everyday life.”
Uber rolled out a blitz of other new efforts last month. It introduced a hiring platform called Uber Works that helps find temporary jobs for gig workers. It bought a majority stake in Cornershop, a grocery delivery service based in Santiago, Chile. And on Oct. 28, it started Uber Money, which are financial products for drivers.
At the same time, the cost-cutting has continued. Uber laid off 400 employees in food delivery, autonomous vehicle development and other divisions in October. In one post-layoff discussion, managers reiterated that workers would have to do more with less, according to an employee who attended the meeting.
Uber has also consolidated the internal systems on which its technology runs as it has combined rides and food delivery into a single app, said one person familiar with the project. The project, code-named Crane after construction cranes, let engineers use the same tools to make sure their code was running smoothly, instead of each team building their own systems, the person said.
In October, he toured Uber’s offices in India and began a public transit partnership.
On Monday, he is scheduled to talk to Wall Street about Uber’s earnings before appearing on Wednesday at The New York Times’ DealBook conference in New York.

India to order taxi aggregators like Uber, Ola to go electric: Report

India plans to order taxi aggregators like Uber and Ola to convert 40 per cent of their fleet of cars to electric by April 2026, according to a source and records of government meetings to discuss new rules for clean mobility.
Uber and Ola, both backed by Softbank Group, would need to start converting their fleet as early as next year to achieve 2.5 per cent electrification by 2021, 5 per cent by 2022, 10 per cent by 2023 before hiking it to 40 per cent, according to the person and the records that have been reviewed by Reuters.

Some taxi players, like Ola, have previously tried to operate electric cars in the country, but with little success given inadequate infrastructure and high costs.
New Delhi, however, is looking to push the new policy to boost the adoption of electric vehicles (EVs) as it tries to bring down its oil imports and curb pollution so it can meet its commitment as part of the 2015 Paris climate change treaty.
Indian think-tank Niti Aayog, chaired by Prime Minister Narendra Modi and which plays a crucial role in policymaking, is working with several ministries on the new policy.
Neighbouring China, home to the world's top auto market, is already leading the world in electrification by setting tough EV sales targets for car makers and offering incentives to taxi operators to increase their fleet of clean-fuel cars.
EV sales in India grew three-fold to 3,600 in the year ended March but still account for about 0.1 per cent of the 3.3 million diesel and gasoline cars sold in the country over the period, industry data showed. China's electric car sales, meanwhile, rose 62 per cent in 2018 to 1.3 million vehicles.
In a meeting in New Delhi on May 28, Niti Aayog officials and the ministries of road transport, power, renewable energy and steel, as well as the departments of heavy industries and trade, were among those recommending taxi operators in India gradually convert to electric.
They also recommended that all new cars sold for commercial use should only be electric from April 2026, a change that would also apply to Uber and Ola, said the person who has direct knowledge of the matter but spoke on condition of anonymity.
Motorcycles and scooters sold for commercial purposes, like food delivery or for use by e-commerce companies, will also need to be electric from April 2023, the person added.
India has seen a boom in food delivery apps like Zomato and Swiggy, which counts Naspers and Tencent as investors. Sales by e-commerce firms like Amazon.com and Walmart-owned Flipkart are also rising.
Motorbikes too
The EV proposal comes weeks after the inter-ministerial committee recommended electrifying most motorbikes and scooters for private use and all three-wheeled autorickshaws within the next six to eight years.
While there are several electric scooter manufacturers in the country including Ather Energy, Hero Electric and Okinawa, there are only two car makers that build and sell electric cars - Mahindra & Mahindra and Tata Motors.
Some taxi operators have so far had little success operating electric cars in India. Ola launched a pilot project in the central Indian city of Nagpur in 2017 but a year later drivers, unhappy with long wait times at charging stations and high operating expenses, wanted to return to gasoline cars.
Ola, however, is not giving up yet.
Its Ola Electric Mobility unit in March raised 4 billion rupees ($58 million) from investors including venture capital fund Tiger Global and Matrix Partners.
It also raised $300 million from Hyundai Motor and Kia Motors and formed a strategic partnership with the South Korean duo to help build India-specific EVs.
Modi's government in 2017 had set an ambitious target to electrify new cars and utility vehicles by 2030 but resistance from the industry forced it to scale back the plan.

How Uber, FB, Airbnb can influence user decisions on where to click, spend

Uber’s business model is incredibly simple: It’s a platform that facilitates exchanges between people. And Uber’s been incredibly successful at it, almost eliminating the transaction costs of doing business in everything from shuttling people around town to delivering food.
This is one of the reasons Uber is now among the most valuable companies in the world after its shares began trading on the New York Stock Exchange on May 10.
Yet its US$82.4 billion market capitalization may pale in comparison to the wealth of user data it’s accumulating. If you use Uber – or perhaps even if you don’t – it knows a treasure trove of data about you, including your location, gender, spending history, contacts, phone battery level and even whether you’re on the way home from a one-night stand. It may soon know whether you’re drunk or not.
While that’s scary enough, combine all that data with Uber’s expertise at analyzing it through the lens of behavioral science and you have a dangerous potential to exploit users for profit.
Uber’s hardly alone. Our research shows the biggest digital platforms – Airbnb, Facebook, eBay and others – are collecting so much data on how we live, that they already have the capability to manipulate their users on a grand scale. They can predict behavior and influence our decisions on where to click, share and spend.
While most platforms aren’t using all these capabilities yet, manipulation through behavioral psychology techniques can occur quietly and leave little trace. If we don’t establish rules of the road now, it’ll be much harder to detect and stop later.
‘Choice architecture’
A platform can be any space that facilitates transactions between buyers and sellers. Traditional examples include flea markets and trading floors.
A digital platform serves the same purpose but gives the owner the ability to “mediate” its users while they’re using it – and often when they’re not. By that we mean it can observe and learn an incredible amount of information about user behavior in order to perfect what behavioral scientists call “choice architectures,” inconspicuous design elements intended to influence human behavior through how decisions are presented.
Uber knows when your phone’s battery is getting low. boyhey/Shutterstock.com
For example, Uber has experimented with its drivers to determine the most effective strategies for keeping them on the road as long as possible. These strategies include playing into cognitive biases such as loss aversion and overestimating low probability events, even if a driver is barely earning enough money to make it worth her while. Drivers end up like gamblers at a casino, urged to play just a little longer despite the odds.
Uber didn’t immediately respond to a request for comment.
Airbnb also experiments with its users. It has used behavioral science to get hosts to lower their rates and accept bookings without screening guests – which creates real risks for hosts, particularly when they are sharing their own apartment.
While these examples seem relatively benign, they demonstrate how digital platforms are able to quietly design systems to direct users’ actions in potentially manipulative ways.
And as platforms grow, they only become better choice architects. With its IPO’s huge influx of investor money to fund more data and behavioral science, Uber could move into dangerously unethical territory – easy to imagine given its past practices.
For example, if the app recognizes that you are drunk or in a neighborhood you rarely travel to – and one that its data show is high in crime – it could charge you a higher rate, knowing you’re unlikely to refuse.
Legal challenges
And it’s not all speculation.
In an effort to deceive law enforcement trying to investigate the company, Uber actually found a way to identify government regulators trying to use its app and then prevented them from getting rides.
That’s one reason lawmakers and regulators have been discussing the difficult, interrelated roles of behavioral science and tech for years. And some companies, Uber in particular, have been investigated for a host of bad business practices, from discrimination to misusing user data.
But most of the manipulation we’ve identified and worry about is not expressly illegal. And because regulators are often unable to keep pace with the ever-evolving use of technology and choice architecture, that’s likely to remain so.
Given the absence of well-defined and enforceable legal guardrails, platform companies’ propensity to exploit behavioral science at users’ expense will remain largely unchecked.
An ethical code
One solution, in our view, is establishing an ethical code for platform companies to follow. And if they don’t adopt it willingly, investors, employees and users could demand it.
Since the mid-20th century, written codes of ethical conduct have been a staple of U.S. companies. The legal and medical professions have relied on them for millennia. And research suggests they are effective at encouraging ethical behavior at companies.
We reviewed hundreds of ethical codes, including ones targeted at tech and computing companies. Based on our research, we urge digital platforms to adopt five ethical guidelines:
All choice architecture employed on a platform should be fully transparent. Platforms should disclose when they are using the tools of behavioral science to influence user behavior
Users should be able to make choices on the platform freely and easily, and choice architects should limit behavioral interventions to reminders or prompts that are the least harmful to user autonomy
Platforms should avoid “nudging” users in ways that exploit unconscious and irrational decision making based on impulse and emotion. New research shows that transparent choice architecture can work just as well
Platforms should recognize the power they possess and take care not to exploit the markets they’ve created, including by abusing information asymmetries between themselves and users or opposing reasonable regulations
Platforms should avoid using choice architecture that discourages users from acting in their own best interests. As Nobel Prize-winning behavioral economist Richard Thaler put it, we should only “nudge for good.”
Big tech and behavioral science are now integrated in ways that are making companies wildly successful, from buzzing toothbrushes that make cleaning your teeth seem rewarding to using texts to nudge poorer mothers to use health care.
While the results can significantly enhance our lives, it also makes it easier than ever for companies to manipulate users to enhance their bottom lines.
Abbey Stemler, Assistant Professor of Business Law and Ethics, Indiana University; Joshua E. Perry, Associate Professor of Business Law and Ethics, Indiana University, and Todd Haugh, Assistant Professor of Business Law and Ethics, Indiana University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
The Conversation

Uber's early investors are poised to reap $1.3 billion in IPO sale

Early investors and employees of Uber Technologies Inc. are planning to sell about $1.3 billion worth of stock in the ride-hailing firm’s initial public offering.
Benchmark is the biggest seller, offering 5.7 million of its shares, according to a regulatory filing Friday. That would fetch about $270 million at the middle of the listing’s current $44 to $50 price range. SoftBank Group Corp. is offering 5.5 million shares, while Uber co-founders Travis Kalanick and Garrett Camp expect to sell holdings worth $176 million and $147 million, respectively.

Saudi Arabia’s sovereign wealth fund and Alphabet Inc. haven’t offered any of their shares for sale.
The selling shareholders will still control about $36 billion worth of the San Francisco-based firm’s stock after the offering, according to calculations by Bloomberg.
Uber is planning to offer 180 million shares and is seeking to raise as much as $9 billion, the filing shows. That would give the firm a market value of as much as $84 billion.
Other Uber investors selling holdings include venture capital firms Lowercase Capital and First Round Capital, as well as private equity firm TPG. Early employee Oscar Salazar has a stake of about $250 million and is planning to sell about $10 million worth of shares.
Uber is expected to debut on the New York Stock Exchange May 10.

Uber sets terms for a $90-billion IPO, posts $1 billion loss in Q1

Ride-hailing company Uber Technologies Inc is aiming for a valuation of up to $91.5 billion in its initial public offering, potentially the largest U.S. listing in years and a test of investor appetite for a high-growth but highly unprofitable business.
The valuation that Uber is seeking in its IPO is less than the $120 billion that investment bankers told Uber last year it could fetch, and closer to the $76 billion valuation it attained in its last private fundraising round in 2018.

This reflects the poor stock performance of its smaller rival Lyft Inc following its IPO last month. Lyft shares ended trading on Thursday down more than 20 percent from their IPO price amid investor skepticism over its path to profitability.
Lyft completed its IPO at a valuation of $24.3 billion, which corresponded to around 11 times its 2018 revenue. By comparison, the top end of Uber's valuation target is around 8 times its revenue last year.
In a regulatory filing on Friday, Uber set a target price range of $44 to $50 per share for its IPO. The company will sell 180 million shares in the offering to raise up to $9 billion, with a further 27 million sold by existing investors for as much as $1.35 billion.
Reuters reported this month that the combined value of Uber shares sold in the IPO could be around $10 billion.
The Uber IPO would rank it as the largest in the United States since that of Chinese e-commerce giant Alibaba Group Holding Ltd in 2014.
The updated public filing comes as Uber gears up to begin its investor road show, in which management will spend the coming days pitching Uber to public markets investors. Uber expects to price the IPO on May 9 and then begin trading on the New York Stock Exchange the following day, people familiar with the matter have said.
Of the stock being sold in the IPO by existing Uber investors, 6.86 million shares are from Uber co-founders Travis Kalanick and Garrett Camp, meaning the two men could jointly pocket $343 million if the IPO prices at the top end of its current range.
Uber will face a host of questions from investors, including when it will turn a profit, how it will navigate the transition to autonomous vehicles and whether its business model can support higher driver costs from minimum wage rules.
Underscoring the company's ability to generate revenue but also the scale of its losses, Uber reported in the filing a net loss attributable to the company for the first quarter of 2019 of around $1 billion on sales of roughly $3 billion.
"When it comes to Uber, we believe there are still questions over the current car-sharing model, the economics of which are not immediately or obviously attractive for sustainable, long-term investment," Mark Hargraves, head of Framlington Global Equities, wrote in a note.
Uber also said PayPal had agreed to purchase $500 million of stock in a private placement at the price the IPO eventually settles at. The two companies also said they were extending an existing partnership to "explore future commercial payment collaborations."
CONSERVATIVE VALUATION
Two other IPOs this month, those of online scrapbook company Pinterest Inc and video conferencing company Zoom Video Communications Inc, have performed much better than Lyft. Uber, however, has chosen to still value itself conservatively.
One advantage Uber will likely seek to play up to investors is that it is the largest player in many of the markets in which it operates, and the fact that it operates around the world.
Analysts consider building scale crucial for Uber's business model to become profitable.
During Uber's IPO road show, Chief Executive Dara Khosrowshahi will be also tasked with convincing investors that he has successfully changed the company's culture and business practices after a series of embarrassing scandals over the last two years.
Those have included sexual harassment allegations, a massive data breach that was concealed from regulators, use of illicit software to evade authorities and allegations of bribery overseas.

Uber restructures business; India now integrated with European region

In a major restructuring in India, the rides business of Uber India will now report to Pierre-Dimitri Gore-Coty who as vice president currently heads the car hailing company's Europe, middle east and Africa business from Amsterdam. At present, the India rides business reports to Asia Pacific region, headquartered in Singapore.
Coty will now have an integrated portfolio of regions to oversee. It includes Uber’s Asia Pacific ride business which has India and south Asia, Japan, South Korea, Taiwan, New Zealand and Australia, apart from his existing responsibilities. Amit Jain who earlier started the rides business in India and headed Uber India’s operations before moving up to become the head of the Asia Pacific business has decided to quit the company. With this move the Asia Pacific rides business will be integrated with Coty’s existing portfolio. Explaining the changes at a time when the company has filed for an IPO Barney Harford, COO, Uber says:

“After four great years, Amit Jain will be leaving Uber at the end of May to take a well-deserved break. Amit has been instrumental in growing our rides business—first in India from launch to category leadership, and more recently across the Asia Pacific region. I’d like to thank him for his contribution and wish him every success in his future endeavours. I’m excited that Pierre-Dimitri Gore-Coty, one of our most experienced leaders, will take responsibility for our Asia Pacific rides business in addition to his current role leading our rides teams across Europe, the Middle East and Africa. I look forward to seeing Pierre work with our talented APAC teams to unlock opportunity markets such as Japan and South Korea, and continue our strong momentum in markets such as India and Australia. Uber remains deeply committed to the Asia Pacific region and under Pierre’s leadership will continue to invest in our people, products and partnerships.”
The move of integrating the two regions under a single leadership is primarily meant to bring in more synergies in the ridership business. For instance emerging markets like India and sub Saharan Africa which include Egypt, Nigeria, Kenya and Tanzania have a lot of similarities in the business and products which are being developed in one of the countries are being launched in the others. For instance Uber Lite which was developed in India to take care of the slow internet speeds after its success in India has been launched in about 20 other countries which include markets in the sub Saharan region. Similarly high capacity vehicles which have been launched in Egypt are also expected to be experimented with in India to see their potential.
The Indian company had earlier said that it is exploring high capacity 12 or 30-40 seater vehicles, which will have both fixed as well as variable routes depending on demand supported by technology. It could also draw on the expertise being developed in UK on electric vehicles for India. In india for instance Uber is also increasing its R&D headcount from 500 to 1000 in a year and will work on requirements not only for India but also for emerging markets. The integration will also help synergies in developed markets of Europe and UK with that of advanced markets like Japan, South Korea and Australia.

Uber hints at serious cash burn to step up market share in India

American cab-hailing firm Uber Technologies Inc has mentioned its India business, the largest after the US market, prominently in its initial public offering (IPO) filing. The draft prospectus for the biggest IPO in the world since Alibaba’s in 2014 has projected a major cash burn for Uber in trying to get a significant market share in India. Apart from Uber’s India business, the filing with the US Securities & Exchange Commission (SEC) refers to local rivals including Ola, Swiggy and Zomato while citing the risk factors.
“Our business is substantially dependent on operations outside the United States, including those in markets in which we have limited experience and if we are unable to manage the risks presented by our business model internationally, our financial results and future prospects will be adversely impacted,” Uber said in its filing on Friday.

Striking a note of caution, the cab aggregator has said it has been making significant investments in incentives and promotions to help drive growth in India, where competitors such as Ola, Swiggy, and Zomato, are well capitalised and have local operating expertise. ‘’In addition, in March 2019, we announced our agreement to acquire Careem and the expansion of our Uber Freight offering into Europe. Such investments may not be successful and may negatively affect our operating results,” Uber said.
The IPO was estimated to sell around $10 billion worth of stock at a valuation between $90 billion and $100 billion, according to reports. But the filing did not specify the size of the IPO.
The food biz
Besides the rides business, UberEats too would require significant investments, as local players such as Swiggy and Zomato have an edge in the food discovery and ordering business, it has noted. “In India, for example, our Uber Eats offering competes with Swiggy and Zomato, each of which has substantial market-specific knowledge and established relationships with local restaurants, affording them significant product advantages. As a result, such competitors may be able to respond more quickly and effectively than us in such markets to new or changing opportunities, technologies, consumer preferences, regulations, or standards, which may render our products or offerings less attractive.”
According to the filing of the firm, co-founded by Travis Kalanick ten years ago, ‘’future competitors may share in the effective benefit of any regulatory or governmental approvals and litigation victories we may achieve, without having to incur the costs we have incurred to obtain such benefits”.
Impact of Competition laws
The firm has referred to a growing number of competition laws across the EU, the US, Brazil and India as an area of concern. It has made specific mention of issues like predatory pricing and abuse of market power in this context.
“Complaints have been filed in several jurisdictions, including in the US and India, alleging that our prices are too high (surge pricing) or too low (discounts or predatory pricing) or both. If one jurisdiction imposes or proposes to impose new requirements or restrictions on our business, other jurisdictions may follow. Our revenue is dependent on the pricing model we use to calculate consumer fares and driver earnings,” said the company.
ALSO READ: Uber unveils IPO with warning it may never make a profit
Uber has also raised the issue about the need to change the pricing model in certain markets. “In 2016, following the filing of a petition in the Delhi High Court relating to surge pricing, we agreed to not calculate consumer fares in excess of the maximum government-mandated fares in New Delhi, India. Additional regulation of our pricing model could increase our operating costs and adversely affect our business. As a result, we may be forced to change our pricing model in certain jurisdictions, which could harm our revenue or result in a sub-optimal tax structure,” it said.
Cash-heavy market
The company has pointed at risks linked to use of cash too. ‘’In certain jurisdictions, including India, Brazil, and Mexico, as well as certain other countries in Latin America, Europe, the Middle East, and Africa, we allow consumers to use cash to pay drivers the entire fare of rides and cost of meal deliveries (including our service fee from such rides and meal deliveries). In 2018, cash-paid trips accounted for nearly 13 per cent of our global gross bookings.”
It has argued that many jurisdictions have specific regulations regarding the use of cash for ridesharing, and failure to comply with the regulations could result in the imposition of significant fines and penalties and could result in a regulator requiring them to suspend operations.
ALSO READ: Uber unveils vouchers for businesses to sponsor customers' trips
Also, in certain jurisdictions, ‘’serious safety incidents resulting in robberies and violent, fatal attacks on drivers while using our platform have been reported.’’
Driver issues
The company has listed driver dissatisfaction as a likely reason for decline in the number of platform users. ‘’That would reduce our network liquidity, and which in turn may cause a further decline in platform usage.’’
ALSO READ: Uber plans to sell $10 bn worth of stock in IPO, seeks $100 bn valuation
Uber fears that drivers engaging criminal activities would have a serious impact on their business. It has mentioned the New Delhi rape case involving an Uber driver a few years ago. “In December 2014, a driver in New Delhi, India kidnapped and raped a female consumer, and was convicted in October 2015.’’
Uber's global expanse
Six continents, 700+ cities, three platforms (Uber, UberEats and Uber Freight)
14 million trips a day
10 billion plus total trips
3.9 million drivers as of Dec 31, 2018
$78 billion in driver payments
$9.2 billion revenue from ridesharing products in 2018, compared to $3.5 billion in 2016
$3 billion in operating loss in 2018
26 billion miles travelled by consumers via Uber platform in 2018
Source: Company

Uber's exit from Southeast Asia to not impact its India operations

Cab hailing firm Uber has decided to sell its ride and food delivery businesses in Southeast Asia to Singapore-based rival, Grab.
As per a deal, Grab is taking over the operations of Uber in the region, with the US-based company to receive a 27.5 per cent stake in the business in return.

This will however not impact Uber's operations in India, where it is locked in an intense competition with local rival Ola, sources close to the development said.
The move will free up capital to execute on Uber's growth plans in core markets like North America, Latin America, India and Europe and invest in engineering and product development, they said.
Uber sold its China operations to rival Didi Chuxing in 2016 in a deal worth $35 billion. The US firm has taken 5.89 per cent stake in Didi. Last year, Uber merged in Russia with the taxi-hailing app of internet giant Yandex.
As per the sources, the latest stake-sale would be Uber's last minority deal as the company has no intention of taking minority stake in any future merger with global competitors.
There have been speculations about Uber and Ola joining forces in the Indian market. These got stronger after SoftBank - an investor in Ola - joined Uber as an investor committing over $1 billion in the US-based firm.
Uber CEO Dara Khosrowshahi, on his recent visit to India had said, India is a core market for the company. He had indicated that he would not go by the advice of investors like SoftBank, who want the US-based firm to scale back to countries where it already has a strong market position.
Uber has been pumping in substantial funds to fuel its growth in India. In 2015, Uber announced an investment of $1 billion in India to expand its services here. It has also set up a response and support centre in Hyderabad with an investment of $50 million.
In an e-mail to employees post the Grab deal, Khosrowshahi said Uber will get 27.5 per cent stake in the combined company.
"Around 500 colleagues across the region will transition to Grab, and over the coming weeks we will help our customers move to Grab's apps," he added.
He pointed that after investing $700 million in the region, Uber will hold a stake "worth several billion dollars, and strategic ownership in what we believe will be the winner in an important global region".

Uber founder Travis Kalanick's new investment fund to focus on India

Travis Kalanick, co-founder and former CEO of Uber, has launched a new venture fund called 10100 (ten-one-hundred) through which he will focus on promoting large scale employment by investing in tech in India and China.
Kalanick announced the move through a Twitter post earlier today saying that the fund will be home to his “passions, investments, ideas and big bets”. He added that 10100 will oversee his investments in both for-profit as well as non-profit sectors.
“The overarching theme will be able large-scale job creation, with investments in real estate, e-commerce and emerging innovations in China and India. Our non-profit efforts will initially focus on education and the future of cities” Kalanick wrote in the post on Twitter.
Global newspaper reports have said that Kalanick sold equity worth $1.4 billion in Uber, amounting to 29 per cent of his shareholding in the company, during the recent secondary sale to Softbank and its associates.
He was known to own 10 per cent of the equity in Uber which received a $48 billion valuation in the secondary sale.
Kalanick is considered one of the brightest minds in the global technology space with the scale and size of Uber being testament to this. However, several people have pointed out his shortcomings as a leader which ultimately led to his removal as the CEO of Uber by its investors last year.
While his ouster from Uber is considered to have been in the works for a while owing to the number of scandals the company had found itself in, Kalanick’s fate as CEO was finally sealed when investors found out that he had turned a blind eye to Eric Alexander, erstwhile president of Uber’s Asia-Pacific business, illegally obtaining medical records of a 26-year old woman who was raped by an Uber driver in Delhi.
As the CEO of Uber, Kalanick had visited India just once in December 2016, during which he interacted with Prime Minister Narendra Modi and a host of top ministers such as Arun Jaitley, Ravi Shankar Prasad, Nitin Gadkari and Nirmala Sitharaman. He had also interacted with cricketing superstar Sachin Tendulkar and Bollywood star Salman Khan.

End of road for Uber in India? Ola and Uber said to be on merger path

A comment made by Rajeev Misra, a board member of Softbank and about to join the Uber board, triggered a strong buzz on Friday that the Travis Kalanick-founded ride hailing firm may step off the pedal in India. Talks of a possible merger between Ola and Uber, with Softbank as the common investor, also did the rounds.
With the formal closing of the $9.3-billion investment, Japanese tech conglomerate Softbank has become the largest shareholder of Uber.
Misra told the Financial Times that Uber would have a faster path to profitability if it returned to its core markets such as the US, Europe, Latin America and Australia. ‘’This is a growth company, this is not just about them cutting their losses,” he said. “Who cares if they lost a billion more or half a billion less?”
Softbank is the single largest investor in Didi Chuxing in China, Ola in India and Grab in Southeast Asia. In each of these markets, Softbank has backed local players for growth over Uber. In fact, Softbank is learnt to be in talks to buy Tiger Global’s stake in Ola.
An Uber India spokesperson dismissed any talk of a merger between Ola and Uber as a baseless speculation. “Our business in India is stronger than ever and we are 100 per cent committed to serving our riders and driver partners in India", the spokesperson said in a statement. Ola refused to comment on competition.
Uber’s shift to its main markets is likely to reduce the fight with Ola in India that has seen billions of dollars thrown on incentives and discounts to woo drivers and customers on to their respective platforms.
However, over the last one year, both firms have tactically cut incentives and discounts. Yet they are still burning cash.
Bhavish Agarwal, co-founder of Ola, is expected to raise big-ticket funds, estimated around $1 billion more, for expansion as well as newer growth initiatives such as electric vehicles, autos and bicycles.
Ola has projected 2019 as the year to turn profitable.
It's targeting to generate cash profits of over $1 billion by 2021.
It is still not clear whether Softbank would pursue a merger between Ola and Uber, similar to how the dominant Didi Chuxing acquired local stake of Uber in China with a minority stake to the US company. If there is a merger, it could also attract the attention of the Competition Commission of India.
Ola claims market leadership with presence in over 110 cities, covering around two million rides a day, while Uber with presence in 25 cities does around one million daily rides, according to estimates.
Analysts say that India’s taxi sector is seeing a pusback from traditional operators. With lower yields in India, it makes sense for Uber to focus on its higher revenue market, they say.
“To improve financial metrics, it makes sense for Uber to focus on Europe and the US, where the revenue per trip is higher. There is resistance from fleet taxis which believe that Ola and Uber are eating into their business. Those operators are demanding that the ride hailing business should also be included in the regulation,” says Devangshu Dutta, chief executive of Third Eyesight, a consultancy.
“If ride hailing services need to undertake the same level of compliances that fleet taxis do, Uber will find it difficult to make money in a competitive market where yields are low,” he said.
Karnataka, which is among the largest ride hailing markets in India, has brought in a regulation that has fixed minimum and maximum ride hailing fares based on the value of the vehicle, to ensure that drivers are adequately compensated and does not disrupt the traditional taxi market.
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Uber's autorickshaw service back in India 2 years after it was shut down

Cab-hailing major Uber is re-launching its 'AUTO' service in India, almost two years after shutting down the offering in March 2016, starting with Bengaluru and Pune.Cab-hailing major Uber is re-launching its 'AUTO' service in India, almost two years after shutting down the offering in March 2016, starting with Bengaluru and Pune.
The US-based company, which is locked in an intense battle with homegrown player Ola, will allow customers to book autorickshaw rides through 'AUTO' option on its platform later this month in these two cities.
Ola, which also allows booking autorickshaw rides under 'Auto' service, had launched the offering in Bengaluru and Chennai in 2014. Ola Auto is currently operational across 73 cities with over 120,000 lakh autos associated with the company.
An Uber spokesperson said the company had "paused" the service "to see how that side of India's transport ecosystem evolves".
"Auto rickshaws are ubiquitous to mobility options in many Indian cities. To expand transportation choices for our riders, we are excited to launch AUTO in Bengaluru and Pune," the spokesperson told PTI.
In its previous attempt, Uber's AUTO offering was available in New Delhi, Coimbatore, Indore and Bhubaneshwar.
"We are re-launching AUTO starting with two cities. Gradual geographical expansion like this is common to how we operate in cities around the world and it is something that we are looking at very closely," the spokesperson said.
The spokesperson added that AUTO will include all safety features available for Uber cab rides and riders will be able to pay via cash, Paytm and debit/credit cards.
Uber will only on-board licensed, existing auto-drivers who have been screened and accredited by the authorities and every driver partner on AUTO will be required to submit valid government documents before they are given access to the Uber app, the spokesperson said.
For Uber, India is one of its largest markets where it has seen strong growth.
Japanese conglomerate SoftBank, which is also an investor in Ola, has recently committed investing over $1 billion in the US-based ride-sharing platform.

Uber is transport service, can be regulated, rules EU court

The EU's top court ruled on Wednesday that Uber is an ordinary transportation company instead of an app and should be regulated as such, in a decision that will be closely watched around the world.
The case is yet another thorn in the side for scandal- rocked Uber, which has drawn the fury of local taxi drivers and officials for flouting local regulations.

It also comes the same week as one of its drivers admitted to the attempted rape and murder of a British embassy worker coming home from a night out in Beirut, Lebanon.
"The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport," said the Luxembourg-based European Court of Justice.
"Member states can, therefore, regulate the conditions for providing that service."
Uber, the biggest name in the growing gig economy, claims it is a mere service provider, connecting consumers with drivers in more than 600 cities.
But it has run into huge opposition from taxi companies and other competitors who say this allows it to dodge costly regulations such as training and licensing requirements for drivers and vehicles.
The case was brought by a taxi drivers' association in the Spanish city of Barcelona, where belief runs high that Uber is a taxi company that should be subject to rules governing such vehicles.
In a dense legal judgement, the ECJ said that Uber was a service that connects "by means of a smartphone application and for remuneration non-professional drivers using their own vehicle with persons who wish to make urban journeys."
That means it is "inherently linked to a transport service and, accordingly, must be classified as a 'service in the field of transport' within the meaning of EU law."
The EU court's senior adviser had said in a legal opinion in May that Uber was indeed a transport company.
The company has rejected that argument, saying it will harm innovation.
"To be considered a transport company will not change the regulations we are subject to in most European countries," a spokesman for Uber said.
"It will, however, hurt the necessary reform of outdated laws which prevent millions of Europeans being able to find a reliable ride with just one click," the spokesman said.
Uber has had a rough ride in Spain, where a judge ruled in 2014 that its UberPop service risked breaking the law, leading to the Barcelona submission to the ECJ.
Early last year it decided to only operate a limited a version of its UberX service in Spain which uses licensed, professional drivers instead of the amateurs who had previously worked via the UberPop application.