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Earnings

Uber earnings: The high cost of multitasking in a pandemic

Uber earnings: The high cost of multitasking in a pandemic
  • Q1 revenue: $3.54 billion (+14% YoY, vs. $3.5 billion expected)
  • Q1 loss: $2.9 billion (Up 190% YoY from loss of $1 billion in Q1 2019)
  • Guidance: Uber withdrew its full-year guidance in mid-April, just months after CEO Dara Khosrowshahi told investors that the company was poised to hit profitability by Q4 2020. He's now aiming to shave $1 billion off spending this year.

The big number: Gross bookings for Uber's two main businesses — ride-hailing and food delivery — grew to a combined $15.8 billion in the first quarter, up 8% year-over-year despite a major slowdown in rides during the COVID-19 crisis. Whether these two parts of the whole can continue to work in equilibrium, versus one dragging the other down, will be key to Uber's long-term prospects. The company's stock was up after hours on the earnings news, after rising more than 11% on news of an investment deal with Lime scooters.

People are talking: "We're taking a hard look at our overall cost structure and our other bets to ensure our core business of rides and eats emerges stronger than ever," Khosrowshahi said on Thursday's earnings call. "Reaching profitability remains a strategic priority for us. We believe the disruption caused by COVID-19 will impact our timeline by a matter of quarters and not years."

Opportunities: With the ride-hailing market decimated by shelter-in-place orders, Uber's hopes for short-term growth now hinge on food and grocery delivery. "The big opportunity that we thought Eats was just got bigger," Khosrowshahi said. Uber Eats revenue was up 54% year-over-year, and the company is accelerating efforts to add products from grocery and convenience stores to its delivery options. Khosrowshahi emphasized the company's global scale and recent acquisition of Latin America grocery delivery startup Cornershop. In a thinly veiled jab at rival Lyft, he said Uber's diversification is now its biggest asset: "We believe we have a structural advantage. Rides-only players were substantially impacted." The Lime deal backed up this posturing, with Uber announcing it was leading a $170 million funding round while merging its Jump bike rental and scooter business into the electric scooter company.

Threats: Uber's ability to get back on track financially will depend on the depth of ride-hailing's decline amid social distancing. In a bid to slow the bleeding, Uber cut 3,700 jobs this week and announced a spending freeze on expansion projects in Dallas, Chicago and Mexico City. Still, Khosrowshahi predicted that "pre-COVID usage will build back steadily" after seeing early data from reopened markets like Hong Kong, Texas and Georgia, where rides have rebounded to 40% to 70% of pre-crisis levels. In the meantime, Khosrowshahi said the company is "working through" plans for both drivers and riders to wear protective equipment like masks, and is continuing long-term R&D work on automation with its Advanced Technologies Group.

The power struggle: Can Uber keep doing it all? And who will actually do the varied legwork required on the ground? Like Lyft and other gig companies, Uber is in the middle of a contentious regulatory battle over pay and employment benefits for contract workers — a fight poised to come to a head with a $90 million California ballot effort to roll back new protections under state law AB 5. There's also the question of how far Uber Eats will go to compete with grocery-focused gig economy companies like Instacart, potentially pitting the political allies directly against one another in a tumultuous business climate.

People

Making the economy work for Black entrepreneurs

Funding for Black-owned startups needs to grow. That's just the start.

"There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help," said Mastercard's Michael Froman.

Photo: DigitalVision/Getty Images

Michael Froman is the vice chairman and president of Strategic Growth for Mastercard.

When Tanya Van Court's daughter shared her 9th birthday wish list — a bike and an investment account — Tanya had a moment of inspiration. She wondered whether helping more kids get excited about saving for goals and learning simple financial principles could help them build a pathway to financial security. With a goal of reaching every kid in America, she founded Goalsetter, a savings and financial literacy app for kids. Last month, Tanya brought in backers including NBA stars Kevin Durant and Chris Paul, raising $3.9 million in seed funding.

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Michael Froman
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
Sponsored Content

Building better relationships in the age of all-remote work

How Stripe, Xero and ModSquad work with external partners and customers in Slack channels to build stronger, lasting relationships.

Image: Original by Damian Zaleski

Every business leader knows you can learn the most about your customers and partners by meeting them face-to-face. But in the wake of Covid-19, the kinds of conversations that were taking place over coffee, meals and in company halls are now relegated to video conferences—which can be less effective for nurturing relationships—and email.

Email inboxes, with hard-to-search threads and siloed messages, not only slow down communication but are also an easy target for scammers. Earlier this year, Google reported more than 18 million daily malware and phishing emails related to Covid-19 scams in just one week and more than 240 million daily spam messages.

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Citizen’s plan to keep people safe (and beat COVID-19) with an app

Citizen CEO Andrew Frame talks privacy, safety, coronavirus and the future of the neighborhood watch.

Citizen added COVID-19 tracking to its app over the summer — but its bigger plans got derailed.

Photo: Citizen

Citizen is an app built on the idea that transparency is a good thing. It's the place users — more than 7 million of them, in 28 cities with many more to come soon — can find out when there's a crime, a protest or an incident of any kind nearby. (Just yesterday, it alerted me, along with 17,900 residents of Washington, D.C., that it was about to get very windy. It did indeed get windy.) Users can stream or upload video of what's going on, locals can chat about the latest incidents and everyone's a little safer at the end of the day knowing what's happening in their city.

At least, that's how CEO Andrew Frame sees it. Critics of Citizen say the app is creating hordes of voyeurs, incentivizing people to run into dangerous situations just to grab a video, and encouraging racial profiling and other problematic behaviors all under the guise of whatever "safety" means. They say the app promotes paranoia, alerting users to things that they don't actually need to know about. (That the app was originally called "Vigilante" doesn't help its case.)

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

People

Why the CEO of GoFundMe is calling out Congress on coronavirus

GoFundMe has seen millions of Americans asking for help to put food on the table and pay the bills. Tim Cadogan thinks Congress should help fix that.

"They need help with rent. They need help to get food. They need help with basic bills," GoFundMe CEO Tim Cadogan said. "That's what people need help with to get through this period."

Photo: John Lamparski/Getty Images

Tim Cadogan started his first day as CEO of GoFundMe about two weeks before the pandemic wrecked the world. He knew he was joining a company that tried to help people make extra money. He didn't know his company would become a lifeline for millions of Americans who couldn't pay their bills or put food on the table.

And so after a year in which millions of people have asked for help from strangers on GoFundMe, and at least $600 million has been raised (that number could be as much as $1 billion or more now, but GoFundMe didn't provide fundraising data past August) just for coronavirus-related financial crises, Cadogan has had enough. On Thursday, he wrote an open letter to Congress calling for a massive federal aid package aimed at addressing people's fundamental needs. In an unusual call for federal action from a tech CEO, Cadogan wrote that GoFundMe should not and can never replace generous Congressional aid for people who are truly struggling.

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Anna Kramer

Anna Kramer is a reporter at Protocol (@ anna_c_kramer), where she helps write and produce Source Code, Protocol's daily newsletter. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

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