Uber Cuts 25% Of Workforce In India, As Ride Hailing Services Slowly Resume

Uber Technologies (UBER) said on Tuesday that it will cut 600 jobs in India as the coronavirus pandemic and related lockdown continues to hurt demand for the ride-hailing service.

However, the layoffs will only impact full-time employees engaged in driver and rider support, as well as other functions, but not the drivers themselves.

Reuters reported that Uber India had about 2,400-2,500 workers (excluding drivers) prior to the layoffs – meaning the job cuts involve 25% of its workforce.

Pradeep Parameswaran, Uber's president for India and South Asia, said the company will provide 10 weeks of pay and six months of medical insurance for laid off workers.

“The impact of Covid-19 and the unpredictable nature of the recovery has left Uber India with no choice but to reduce the size of its workforce,” said Parameswaran. “We made the decision now so that we can look to the future with confidence.”

Last week, Uber said it would cut a total of 6,700 jobs globally in order to focus on its core ride-hailing and food delivery businesses.

Uber’s principal competitor in India, Ola, laid off 1,400 workers last week.

In early May, Uber resumed ride hailing services in 50 Indian cities, but business has not been restored to levels that would support all staffing.

The ride-hailing taxi business in India came to a screeching halt in late March when the government imposed a nationwide lockdown.

But India remains an important market for Uber – the company has already sold of most of its ride hailing assets in Asia to DiDi of China and Grab of Singapore.

Uber continues to operate in Australia, New Zealand, Bangladesh, Sri Lanka, Japan, South Korea, Taiwan and Hong Kong.

Last week, Uber expanded its 'Connect' package delivery service to five more Indian cities: New Delhi, Noida, Hyderabad, Chennai and Chandigarh.

Packages sent through Uber Connect must be under 5 kilograms (11 pounds) in weight. Alcohol, recreational drugs, or dangerous and illegal items cannot be sent through the service.

The ‘Connect’ program has already been launched in Kolkata, Jaipur, Guwahati and Gurgaon.

"The positive response to our pilot program last week has encouraged us to expand the availability of Uber Connect,” said Uber India and South Asia Director-Operations and Head of Cities Prabhjeet Singh.

In early April, Uber formed a partnership with local online grocery company Bigbasket to deliver essential products to customers during the lockdown.

The deal allowed Bigbasket to serve customers in Bengaluru, Hyderabad, Chandigarh and Noida.

“This last-mile delivery service provides multiple wins. It supports authorities in containing covid-19, delivers essential supplies in a timely manner to customers and creates earning opportunities for drivers. We will not charge any commissions for our efforts," said Singh.

"The ongoing pan-India lockdown has led to a disruption in the supply of essential goods, primarily led by a shortage of personnel and delivery vehicles,” said Lalita Aggarwal, National Process Head-Last Mile, Bigbasket. “We are very happy to partner with Uber India for this initiative and we will be utilizing a portion of their huge fleet of cars, bikes as well as personnel to help with our deliveries to fulfill customer orders,"

In January, Uber unloaded its Eats business in India to Zomato. Backed by Japanese conglomerate Softbank, Uber has vowed to get rid of money-losing operations. The San Francisco-based company will also close or consolidate 45 offices globally, as its ride business plunged 80% in April.

Uber posted a net loss of about $2.9 billion in the first quarter.