Uber CEO reveals they considered buying food delivery app Caviar before rival DoorDash did

Uber CEO Dara Khosrowshahi told CNBC on Friday that the ride-hailing, freight, and delivery giant considered a deal with on-demand food delivery …

Uber CEO Dara Khosrowshahi told CNBC on Friday that the ride-hailing, freight and delivery giant considered a deal with on-demand food delivery service Caviar but decided to pass.

“We took a look at Caviar. It’s a great brand,” Khosrowshahi said in a “Squawk on the Street ” interview, as Uber shares were sinking after disappointing second-quarter results. “It wasn’t the right deal for us.”

Khosrowshahi said Uber’s food delivery service, Uber Eats, will focus on organic growth rather than acquisitions.

On Aug 1, Square announced an agreement to sell Caviar to Uber Eats’ formidable rival DoorDash for $410 million. Square had bought Caviar for just over $44 million in 2014. The Caviar service specializes in premium restaurants.

While declining to comment further on Caviar, Khosrowshahi did say that he sees food delivery as a real battle this year and next. “The Eats market continues to be very competitive.”

Khosrowshahi said that if Uber were to seek any acquisitions, he’s not worried. “We’re Uber, everyone wants to talk to us.”

After the Wall Street close Thursday, Uber posted a much wider-than-expected second-quarter loss of $4.72 per share. Revenue of $3.17 billion was also missed analyst estimates.

Uber’s core ride-hailing business saw better-than-expected gross bookings for the quarter, while the newer Uber Eats unit’s gross bookings fell short of forecasts.

“So with rides, I say the competitive environment is stable and getting better,” Khosrowshahi said during Friday’s CNBC interview. “We see a lot of competition with Eats,” he reiterated.

Related Posts:

  • No Related Posts

Uber CEO has no regrets about poor IPO, says company still ‘not getting through’ to investors

Uber CEO Dara Khosrowshahi has no regrets about taking the company public despite the stock’s poor debut and continued struggles. He said …

Uber CEO Dara Khosrowshahi has no regrets about taking the company public despite the stock’s poor debut and continued struggles. He said investors are misunderstanding the company as the shares plunged following a massive loss.

“I think we’ve got to do a better job in terms of telling our story to the markets. I think the company is executing very very well, and somehow it’s not getting through the noise,” Khosrowshahi told CNBC’s David Faber and Jim Cramer on Squawk on the Street on Friday.

Asked if he has any regrets about the Uber’s initial public offering, the CEO said “it was a great day as far as bringing in, getting the company public, getting us funded to that path to profitability as well.”

“At some points you just put your head down and you execute and the market short-term, while you can’t control the short-term, long-term the market will take care of itself,” he added.

Shares of Uber tanked nearly 10% Friday after the ride-hailing giant reported disappointing second-quarter earnings, including a massive $5.2 billion loss in the three-month period. The stock has been trading below its IPO price of $45 since early July.

Khosrowshahi said the company’s staggering loss in the second quarter is a “once-in-a-lifetime” hit as he tries to steer it toward profitability. He added that Uber is targeting 30% revenue growth in the back-half of the year.

Related Posts:

  • No Related Posts

2019 IPO Checkup

Lyft stock sank over 2% on news that its COO, Jon McNeill, is leaving the company after 18 months. Interesting note from the WSJ: In 2018 only 32% of …

It’s time for your midsummer checkup on 2019 IPOs. Because the public market game doesn’t end after the tailgaters pack up and head home.

1. After a wildly successful May IPO, Beyond Meat reported both wider losses (24 cents per share) and greater revenue ($67 million) than analysts expected for Q2 yesterday.

  • By Monday’s close, Beyond stock had catapulted nearly 800% since the IPO as the vegan meat maker gobbled up partnerships with both restaurants and meal kit delivery services. But shares fell as much as 13% in extended trading after it announced plans for a secondary offering.

2. Lyft stock sank over 2% on news that its COO, Jon McNeill, is leaving the company after 18 months. Interesting note from the WSJ: In 2018 only 32% of large companies surveyed had a COO.

3. Uber (-1.44%) also made some personnel changes: It laid off a third of its marketing team (about 400 people) yesterday to get its “edge” back, per CEO Dara Khosrowshahi. Uber’s on the quest for profitability, which tech firms look at the way the rest of us look at buying a hot tub. It’d be nice, but do we really need it right now?

Related Posts:

  • No Related Posts

Uber lays off 400 employees from global marketing team

NEW YORK — Uber is laying off 400 employees in marketing, about a quarter of the marketing team’s global workforce of 1,200 people. The move …
By Cathy Bussewitz | AP

July 29 at 4:34 PM

NEW YORK — Uber is laying off 400 employees in marketing, about a quarter of the marketing team’s global workforce of 1,200 people.

The move, announced Monday, follows a leadership shake-up in June when CEO Dara Khosrowshahi combined the company’s marketing, communications and policy teams.

The ride-hailing company has struggled to prove it can become profitable and its stock has traded mostly below its IPO price since its debut in May. Uber has blamed its losses partly on its costly promotions to attract riders and drivers. Those promotions are crafted by its marketing department.

Khosrowshahi installed Jill Hazelbaker to lead up marketing and public affairs in June. On Monday they announced a more centralized structure for marketing and said they want to build a consistent brand narrative across audiences, products and regions.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Related Posts:

  • No Related Posts

Uber lays off about 400 employees in marketing department reorganization

A little more than two months after debuting its stock on the public market, Uber has made its first big cut to its workforce, laying off about 400 …

A little more than two months after debuting its stock on the public market, Uber has made its first big cut to its workforce, laying off about 400 employees globally. In an email sent to staffers Monday, Chief Executive Dara Khosrowshahi said the company was reorganizing its marketing department across the globe.

Khosrowshahi wrote, “[M]any of our teams are too big, which creates overlapping work, makes for unclear decision owners, and can lead to mediocre results. As a company, we can do more to keep the bar high, and expect more of ourselves and each other.”

For the record:
1:55 PM, Jul. 29, 2019An earlier version of this article misstated the amounts of Uber’s marketing spending for the first quarter of 2018 and 2019 as $677,000 and about $1 million, respectively. Uber spent $677 million and about $1 billion for those periods.

The layoffs come just a few weeks after Khosrowshahi announced that Rebecca Messina, Uber’s global chief marketing officer, was ending her nine-month stint at the company and Uber was combining its public relations and marketing departments under Jill Hazelbaker, who was then senior vice president of communications and public policy. “Marketing is so important to our business, and our brand continues to be challenged,” Khosrowshahi said in an email explaining the decision to combine the departments in June.

Under Khosrowshahi, Uber has worked to curb its losses, which reached $1 billion in the first quarter of 2019. The company spent about $1 billion on sales and marketing in the first quarter of 2019, up from $677 million in the same period the year prior. During a conference call discussing the first-quarter results, Uber Chief Financial Officer Nelson Chai attributed part of the increase in marketing spending to customer promotions and other marketing expenses, including head count.

Advertisement

“This increase as a percentage of gross bookings was primarily due to increased consumer promotions as well as increased advertising and marketing head count,” Chai said.

The company’s marketing team had about 1,200 employees before the reduction. The total employee count is 25,000, according to Uber.

The layoffs are designed to centralize the company’s marketing efforts, according to emails Hazelbaker and Khosrowshahi sent to staff.

“I have consistently heard that we have too many people with overlapping mandates,” Hazelbaker wrote in an email. “Decision-making is unclear, which means that we are not moving at speed or delivering the results the business needs. Separately, we have replicated core functions at the regional (and sometimes country) level, which leads to reinvention rather than iteration, as well as inconsistencies in our brand narrative. Finally, there is deep dissatisfaction within the team, which shows in Marketing’s Pulse Survey results—the lowest scores of any team at the company.”

Advertisement

As the company works to become leaner and faster, Uber employees may see similar changes across other departments, the executives suggested.

“It’s also critical that we look at the big picture, admit when we aren’t where we need to be as a company, and, most importantly, get back on track,” Khosrowshahi said in his email. “Today, there’s a general sense that while we’ve grown fast, we’ve slowed down.”

“As a company, we can do more to keep the bar high, and expect more of ourselves and each other,” he continued. “So, put simply, we need to get our edge back. Being fast wins; coupling that with strong alignment and exceptional talent makes magic—and we need magic to deliver on our world-changing mission.”

Related Posts:

  • No Related Posts