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What will Uber look like after the coronavirus?

May 19, 2020, 2:00 PM UTC

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While it didn’t have Alphabet’s cash pile or profitability, Uber’s R&D engine groomed itself in the image of other tech giants. It made starry bets on flying taxis and autonomous driving. It wanted to be the Amazon of transportation, moving rapidly into freight.

In the middle of a global lockdown that has decimated its central ride-sharing business, Uber is jettisoning just about everything except its rides and deliveries lines, per my colleague, Danielle Abril

On Monday, Uber announced plans to lay off another 3,000 employees while closing or consolidating 40 offices, adding to some 3,700 layoffs that came earlier this month. It also said it would wind down its internal incubator, its AI Labs, and Uber Works, a project aimed to help temporary workers find jobs. 

“We have decided to refocus our efforts on our core,” CEO Dara Khosrowshahi said in a letter to employees on Monday, adding ominously: “We need to fundamentally change the way we operate.”

Uber is not expecting a rapid return to its passenger business. Companies are looking to China, where the coronavirus hit first, for signs of how economic activity reinvigorates. But early behavioral metrics there suggest commuters are eschewing ride-hailing for their own cars, and airport runs, representing 15% of Uber’s revenue, are even less in vogue.

Should further cuts be needed, analysts believe Uber’s flying taxi, freight, self-driving units may be among those to go. The last has a large target on its back, given its $499 million loss last year.

An espresso shot to the IPO market: The world’s no. 2 packaged coffee maker, JDE Peet’s BV, is pressing ahead with an initial public offering as global markets show some signs of stability. Behind brands including Peet’s Coffee, Douwe Egberts and Jacobs, JDE Peet’s plans to raise at least £700 million ($764 million) in Amsterdam, becoming one of the few companies willing to test the waters. 

Its owner, JAB Holdings, is known for investments in storefront-heavy companies such as Krispy Kreme and Panera Bread. But 79% of JDE Peet’s coffee business is for home consumption, and folks tend to drink coffee regardless of a recession.

Correction: Yesterday’s term sheet miswrote General Catalyst as the $870 million investor in Jio. The investor was General Atlantic.

Lucinda Shen
Twitter: @shenlucinda


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