Automotive > Autonomous Vehicles Blog

How Would You Spend $9B?

by Roger Lanctot | May 11, 2020

Following Uber Technologies’ earnings report after the market closed Thursday there were a number of conflicting narratives. Some analysts saw weak showings from Uber and its gig economy equivalents Lyft and Airbnb as a sign of impending doom. Other analysts were “heartened” by less-than-horrible losses, cost cutting measures, and hints of green growth shoots.

Marketwatch was a good case in point: “Uber Technologies Inc.’s quarterly loss of nearly $3B didn’t do much to dent analysts’ enthusiasm for the ride-hailing stock…Shares of Uber were up nearly 5% in morning trading Friday.” Marketwatch quoted an Evercore ISI analyst who noted $1B in proposed cost cutting to cope with COVID-19 impacts and “improving ride-sharing trends in regions that have started to reopen, and ‘structurally improving’ take rates and margins for the Uber Eats business.”

Jessica Lessin at The Information, which had broken the story surrounding Uber’s planned layoffs prior to the earnings report, questioned the treatment of Uber, Lyft, and “tech stocks” with corresponding high growth/high value expectations. She pointed to the layoffs at all three companies as evidence of poor spending and management hygiene in what have become low growth sectors with dubious prospects.

I have a far bigger beef – with both Uber and Lyft. Following the earnings reports of Lyft (Wednesday) and Uber both companies notified drivers that they would be required to wear protective face masks with Uber expected to require drivers to take pre-drive selfies to confirm the presence of a mask. Lyft might do the same.

Given the fact that both companies concluded their financial quarters with billions of dollars in the bank, the failure to address the reality of the COVID-19 crisis remains a massive barrier to any significant growth or recovery prospects for either company. Uber and Lyft are coronavirus vectors that ought to be shut down, given their limited COVID-19 response.

At a time when COVID-19 patients are infecting nurses and doctors, and doctors and nurses are infecting other patients, it stands to reason that Uber and Lyft drivers must be required to take far more rigorous steps to protect themselves and their passengers. I can’t imagine using Uber Eats – and not knowing by whom or how my food is being handled – if the delivery person arrives at my door WITHOUT gloves, N95 mask, and a facial guard. Anything less is simply too dangerous.

And, in the car, giving rides to members of the general public or, heaven forbid, essential personnel, Uber and Lyft drivers MUST sanitize their vehicles and wear gloves, N95 masks, and a facial guard. I know a facial guard seems like a bit much – and I don’t expect to see Vice President Mike Pence wearing one – but we all tend to forget that our eyes are exceptionally vulnerable to the same things that threaten us via our noses and mouths.

So when I look at Lyft’s and Uber’s earnings reports of last week and I see $2B and $9B, respectively, on the balance sheets, I think to myself that it’s time these companies stepped up and required their drivers to properly protect themselves and their passengers – in fact, Lyft and Uber should provide the necessary gear. I’ve given up on ever expecting to see Uber and Lyft require or provide in-vehicle partitions – of the sort that DiDi Chuxing installed in hundreds of thousands of its ride hailing vehicles in China. That’s too good for Uber and Lyft drivers.

How about it, Dara? Logan? Time to step up. Ask yourselves whether, when two years from now the COVID-19 pandemic has passed, do want to be remembered for being a coronavirus vector or victor? It’s not too late to flip the script.

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