Uber Leans on Food Delivery to Make Up For COVID Losses

Are you worried about former and current Uber CEOs? No need to be after you read this week’s roundup! Senior RSG contributor John Ince covers former Uber CEO Travis Kalanick’s fancy new digs, cuts and potential relocation of Uber rank-and-file and more in this week’s roundup.

Uber and Lyft are now requiring riders and drivers to wear face masks but what other safety precautions should drivers be taking? Fill out this survey and share your thoughts + be entered to win 1 of 5 $20 Amazon EGift Cards!


Uber has reportedly offered to buy GrubHub as it leans on food delivery to make up for coronavirus losses  [Business Insider]

Sum and Substance:  Uber has made an offer to buy rival delivery service GrubHub, Bloomberg and The Wall Street Journal report.

Shares of GrubHub spiked more than 30% following the reports.

Uber has relied on Uber Eats to make up for severe losses in its main ride-hailing business amid the coronavirus….

A deal could be reached by June, according to Bloomberg’s sources, who also caveat that the talks could also end with no agreement.

My Take:  So Uber is in acquisition mode and Grubhub is the target. It makes sense if market dominance translates into profits.

That hasn’t been the case so far. In last week’s conversation with investors, Uber revealed that they lose a dollar for every three they take in – in food delivery.  That’s not what the market is asking for – at least, in theory.

Uber drivers and riders will be required to wear face coverings [Techcrunch]

Sum and Substance: Uber is planning to require drivers and riders to wear face masks as it prepares to ramp its ride-hailing business back up after being hobbled by the COVID-19 pandemic.

My Take:  This is a fairly major change – as I see it.  Face masks change the nature of the interaction with a passenger – as Jay pointed out in our article on this news.

You get in the car – wearing a facemask – and the driver has one on too.  It’s like a movie – only it’s real life.

Uber-co-founder Travis Kalanick drops $43 million on sprawling Bel Air mansion [Mercury News]

Sum and Substance:  After a lengthy spell spent as a renter in Beverly Hills’ fashionable Trousdale Estates enclave, controversial Uber co-founder Travis Kalanick has decided to grow some permanent real estate roots in Los Angeles.

According to the Wall Street Journal, he’s plunked down $43.3 million for a huge home near the mouth of the East Gate Bel Air neighborhood. (Though the property was technically acquired by an LLC, a careful examination of property records reveals plenty of evidence that Kalanick was indeed the buyer.)

My Take:  Kalanick has found his home. Or rather he has found one of his homes. He also owns a pad in New York City, but this one has the land and size of a real home.

It’s a tough life for the former CEO.

Rideshare drivers stage caravan protest over Uber’s labor practices. Drivers want Uber to comply with AB 5 [Techcrunch]

Sum and Substance:  Around 100 Uber and Lyft drivers are staging a caravan protest at Uber’s  San Francisco headquarters to demand Uber comply with gig worker protections law AB 5, pay into the state’s unemployment insurance fund and drop the ballot initiative it proposed along with Lyft and DoorDash that aims to keep gig workers classified as independent contractors…

A recent survey in San Francisco found 45% of gig workers can’t afford a $400 emergency payment without borrowing and 78% of gig workers are people of color. As part of the protest, drivers also want shareholders to know that when they invest in companies like Uber or Lyft, “they become part of the problem,” Alva said. He added that they will shine the light on them in the same way they shine the light on Uber and Lyft.

My Take:  These drivers are trying to keep the pressure on. It’s not a lot of drivers, but it’s still making noise. Politics is about noise. The ones that make the most noise, sometimes win.

Uber CEO reportedly favored rank-and-file layoffs over pay cuts for top execs [NYPost]

Sum and Substance:  Uber CEO Dara Khosrowshahi reportedly vetoed a request from the ride-hailing giant’s top executives to cut their own salaries in order to avoid laying off rank-and-file workers, paving the way for thousands of pink slips.

A number of the ride-hail giant’s engineering leaders last month told Khosrowshahi that they and other managers were willing to have their own pay slashed in order to spare their workers from Uber’s wide-ranging culling of its headcount, according to The Information (paywall).

“The answer is no,” Khosrowshahi said in response, according to the report…

Khosrowshahi likewise signaled that part of his plan includes “remaking the engineering team so that over time more jobs would be located overseas,” according to the report.

My Take:  It’s an interesting dilemma for Khosrowshahi – cut 3,700 rank and file employees or slash the salaries of top executives.  Khosrowshahi chose to fire 3,700 employees and did it with a 3 minute zoom call.

I don’t know … Khosrowshahi gave up his own salary of $1 million, but he’s got other forms of compensation that come out to much more than $1 million.

Readers, what do you think of this week’s roundup?

-John @ RSG