A person checking their Uber app in London

Uber reports record losses, freezes engineering hires

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Ridesharing company Uber has revealed record quarterly losses and reportedly frozen engineering hires in an effort to minimise losses.

Ubers uncertain financial future was brought to attention in May when it suffered the largest ever first-day loss in IPO history, with shares dropping 11 per cent.

Last week, Uber reported net losses of $5.2bn in the second quarter, including $1.3 in operating losses, $300m in ‘driver appreciation’ related to its IPO, and – most significantly - $3.9bn of stock-based compensation expenses associated with the IPO. Uber reported that revenue growth had slowed, and while its food delivery business had grown 72 per cent, its core ridehailing business grew just two per cent. Uber CEO Dara Khosrowshahi told reporters that this year marked the peak in investment and that losses would ease in 2020 and 2021.

The news of Uber’s vast quarterly losses raised further questions about whether it would ever turn a profit – having warned in its IPO filing that it may never be profitable – and how it would continue to expand and face off competition from rivals like Lyft. However, given that Uber has $13.7bn available in funding, it could continue haemorrhaging money at the current rate for a further two years or longer.

In July, the company cut the size of its marketing team, laying off approximately 400 people from its 1200-strong team. Now, according to reports from Bloomberg and Yahoo News, Uber has frozen hiring of engineering and other technical staff in the US and Canada. Yahoo News acquired emails which revealed that Uber has cancelled interviews with candidates for technical roles and informed other candidates that their applications would be “put on hold for now”.

The freeze has reportedly sparked concerns of further layoffs; a source told Yahoo News that executives had not provided any timelines when questioned about possible layoffs in its engineering team.

Uber acknowledged the policy, telling Bloomberg that the company had exceeded in its annual hiring goals in product management and software engineering and that it was continuing to “aggressively” hire people, including engineers, across its markets, explaining that Uber had: “temporarily hit pause on some teams while we ensure we’re being both effective and efficient in staffing against our strategic priorities.”

The hiring freeze reportedly does not affect Uber’s autonomous vehicle and cargo shipping divisions.

While Uber’s core business is in ridesharing, it has poured money into some ambitious engineering projects, including in the development of autonomous vehicles through its Advanced Technologies Group (ATG). Uber has recruited at least dozens of experts in fields such as robotics, and has been testing self-driving cars at trial locations in the US. However, the company cancelled its almost $1bn effort to develop autonomous trucks in July 2018 following the settlement of a legal case in which Alphabet’s Waymo accused a former employee of having stolen valuable trade secrets for the eventual benefit of Uber.

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