A misconception that digital business are not affected by the Covid 19 pandemic is not true as evidenced by Uber, a digital company that pioneered ride hailing will be laying off 3700 full time employees.
Uber sparked the ride hailing trend across the world with its massive solution in making everyone with a car become taxi drivers using its innovative mobile app. The model gave birth to Asian giant like Grab, Didi and GoJek who all used the same playbook to become tech giants here.
Covid 19 has disrupted economy and businesses in unimaginable ways, traditional operations and modern state of the art digital innovators are not spared. Uber reports that the company plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company’s business.
Coupled by lower trip volumes in its rides segment and the company’s current hiring freeze, the company is reducing its customer support.
According to reports the company plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company’s business. The reason cited was due to lower trip volumes in its rides segment and the company’s current hiring freeze, Uber reduced its customer support and recruited teams by approximately 3,700 full-time employee roles.
The position isn’t much different here in Malaysia, Grab the leading ride hailing provider is also facing though challenges. Drivers are not getting enough passengers and ride volume is extremely low, which in turn trickles upward to Grab leaving less revenue to receive for a company that is losing money every month. Even though these tech startups are born with digital thinking they are circumstances where technology alone will not be able to save the day.
While we attest that going digital or changing business model to adapt to current trends in necessary, company’s should transition at their own pace and not get rushed into a false sense of security that digital will save their business.