Uber is slashing spending and will now treat hiring as a “privilege”

Uber CEO Dara Khosrowshahi recently said that the company is going to be cutting costs after recent feedback from investors.

“The least efficient marketing and incentive spend will be pulled back,” Khosrowshahi said in an email to staff. “We will treat hiring as a privilege and be deliberate about when and where we add headcount. We will be even more hardcore about costs across the board.” I guess there aren’t going to be many more “should I eat this or not eat this” celebrity commercials.

They are going to need to be more efficient about cutting costs after reporting a net loss of $5.9 billion during the first quarter of 2022 on revenue of $6.9 billion. That’s a big hit.

Khosrowshahi said. “It’s clear that the market is experiencing a seismic shift and we need to react accordingly.” I don’t know if he is talking about the entrance of new competitors in the market or if they are just now realizing that delivery is kind of a low margin business and you shouldn’t spend so much on advertising.

GrubHub could be sold just one year after being acquired

After just one year since they were acquired by Just Eat Takeaway, GrubHub may be sold.

JET is facing pressure from shareholders, and in particular one activist investor called Cat Rock Capitol, to either do a partial or full sale of GrubHub or bring on a strategic partner. A letter to JET from Cat Rock said that GrubHub was dragging JET down after a 5% decline in orders from North America.

JET acquired GrubHub for $7.3 Billion and the thought was that acquisition would give JET an advantage in the North American market, but instead with Covid being essentially over and more people dining out instead of staying in GrubHub is losing sales.

GrubHub has been losing market share to its competitors Uber Eats and Doordash, and pretty soon it will be losing even more to Snap Delivered.

The big 3 companies in the delivery space are under regulatory pressure from a number of large cities to curb their delivery fees as lawmakers are introducing legislation to put a cap on the percentage a delivery company can charge a restaurant.