Ride hailing company Uber has announced drastic plans to cut back on its businesses as its losses continue to grow due to the coronavirus pandemic.
In order to secure the company’s future, Uber said it will undertake drastic measures, including letting go an additional 3,000 workers as well as consolidating offices and shutting down business units.
The additional employee reduction would mean the transport company has reduced its total workforce by a quarter in recent weeks. Uber will close or consolidate over 40 of its offices and will wind down business units, including its artificial intelligence lab.
In a letter to employees, Uber chief executive officer (CEO) Dara Khosrowshahi wrote that the measures were important "to secure our future".
He said: "We must establish ourselves as a self-sustaining enterprise that no longer relies on new capital or investors to keep growing, expanding and innovating."
"We have to take these hard actions to stand strong on our own two feet, to secure our future and to continue on our mission," Khosrowshahi added.
Business Losses
Prior to the coronavirus pandemic, Uber has been struggling with large losses but the effects of the virus further amplified the problems of the firm.
At the peak of the lockdowns in the US and Canada in April, the ride hailing company recorded an 80% decline in the number of rides. Despite the surge in demand for its Uber Eats food delivery business, company remained in the red.
Earlier this month, Uber announced plans to cut 3,700 workers and warned that additional reductions may be possible. Drivers were not affected by the reduction since the company considers them independent contractors.
The offices affected by this announcement include hubs in San Francisco and in Singapore, which will start closing over the next year as a new regional headquarters is being chosen.
The company explained that the remaining employees will be reorganized while spending in areas not part of its core personal transport or food delivery businesses will be reduced.
The workforce reduction and shutdowns would amount to $1 billion in reduced spending for the company.
New safety measures
Uber has also recently announced that it is installing protective screens between drivers and passengers as additional safety measure as the UK government looks to loosen its coronavirus pandemic restrictions and people go back to work.
The company hired the AA to install partitions in 400 cars in Newcastle, Sunderland and Durham as part of an initial pilot. It is also providing free protective equipment to drivers.
Uber stated that its planned pilot in the North East of England is important for the ride hailing company to better understand how to transport passengers from one place to another in the safest possible way.
The partition screens will first be tested in areas where it has been given permission by the regulator or city council, in order to ensure that the screens are installed safely.
The guidance for taxi and private hire vehicle firms has been updated by Transport for London (TfL) on Wednesday.
Under the updated guidance, companies are advised to have drivers and passengers socially distance by having the passengers sit in the vehicle’s back seat. Drivers are also advised to carry a bottle of hand sanitizer containing at least 60% alcohol in their vehicle.
