(Bloomberg) — Uber Technologies Inc. Chief Executive Officer Dara Khosrowshahi said the company is “recession resistant” and doesn’t see a need for job cuts, even as market volatility and the prospect of a global recession loom over technology companies.
“The signal on the street is things are really strong and the spend on services continues to be quite robust,” Khosrowshahi said during an interview Wednesday at the Bloomberg Technology Summit.
The optimistic tone comes after Khosrowshahi told staff in May that the ride-hailing giant would “treat hiring as a privilege and be deliberate about when and where we add headcount.” Rival Lyft Inc. also said it plans to significantly slow hiring and cut costs.
The global global economic uncertainty has added a further challenge for Uber’s ride-hailing business, which cratered during Covid-19. Unlike Lyft, Uber was able to rely on its food delivery unit, which tripled as home-bound customers ordered more takeout. Restaurant delivery has been largely resilient even as indoor dining has resumed in a boon for Uber Eats and competitor DoorDash Inc. As Khosrowshahi steers the company out of Covid, a key strategy has been to capitalize on the boom in delivery by expanding into other categories like convenience-store items, alcohol and grocery, and turning the Uber rides app into much more than just ride-sharing.
Last month Uber introduced Uber Charter, a service to book shuttles and coaches for large groups directly in the app. The San Francisco-based company also debuted Uber Travel which compiles flight, hotel and restaurant bookings and allows people in the US and Canada to reserve rides for each leg of their itinerary. In the UK, Uber is piloting a service to allow customers to book long-distance travel in the app.
Even as demand for rides has slowly recovered, both Uber and Lyft have struggled to attract sufficient drivers onto their platforms. The imbalance has led to stubbornly high fares and longer wait times for customers. After spending hundreds of millions of dollars last year to entice drivers back, a spike in gas prices when the war in Ukraine broke out dealt a blow to those efforts just as companies were scaling back bonuses.
Khosrowshahi said driver supply increased 78% in May from a year earlier, but the company will extend a fuel surcharge on rides in an effort to ease the burden of high gas prices on drivers’ take-home pay.
“As we see our sessions increasing, demand increasing, and as we see supply increasing, essentially the marketplace will start to come into more balance,” Khosrowshahi said. “You’ll see less surge and you should see prices moderate.”
In the interview, Khosrowshahi said Uber would look to exit its roughly 11% stake in Didi Global Inc., worth $1.4 billion as of March 31, once the Chinese ride-hailing firm relists in Hong Kong. Didi secured the blessing of shareholders to delist from the New York Stock Exchange, after an 11-month ordeal that wiped out about $70 billion of its market value at one point and turned the ride-hailing giant into a symbol of China’s tech crackdown.
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