The purse strings are going to be tightened this year. In an email to employees shared with CNBC, the ride-hailing firm's CEO said the company would cut back on spending. The first thing to go is marketing and incentives, which include sign-up bonuses and ride discounts. In the e-mail, he made it clear that any new hires would be treated as a privilege.
Before we go big, we have to make sure our economics work. The least efficient spend will be pulled back. We will be deliberate about when and where we add headcount. We will be even more focused on costs across the board.
The company's first quarter revenue of $ 6.9 billion was a 136 percent increase over the same period last year. It is clear that demand is returning to pre-pandemic levels. The company lost millions due to its investments, which include overseas ride-sharing apps. Local competitors are often acquired by Uber. Didi was the victim of this strategy, as it did with other firms. The value of Didi dropped by $2 billion in less than a couple of weeks. It is looking to speed up the sale of its stake in Russia's ride-sharing platform.
New driver sign-ups have been boosted by the incentives program, but have also led to significant losses for the company. The company reported a $509 million loss in August of last year, due to its heavy spending on sign-up bonuses.
Businesses can use the new Freight program to ship packages through the rideshare platform. In the first quarter of 2022, the delivery business of the company posted over $2 billion in revenue, with a record number of merchants.
Delivery has performed better than many other winners of the Pandemic and investors are happy about it. It was a bit of a surprise for me because I firmly believe Delivery should be growing even faster.
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