Forget about Uber Eats in Bangladesh from June 2
In a rather surprising move, Uber Technologies yesterday announced that it is closing down the operations of its food delivery platform Uber Eats in Bangladesh from June 2 as LEADER Dara Khosrowshahi attempts to steer the ride-hailing giant through the coronavirus pandemic.
Uber Eats found its way to Bangladesh in April last year and soon gained popularity using its solid service. The meals delivery platform was mostly of the to be offering its services through the countrywide general shutdown since March 26 to flatten the curve on coronavirus.
"After a year of partnering with local restaurants to offer convenient and reliable food delivery, we've made the difficult decision to discontinue Uber Eats in Bangladesh, on June 2nd 2020," read a notice on the Uber Newsroom yesterday.
The notice did not articulate the reason why for leaving Bangladesh.
But according to global media, Bangladesh is not the only market in which Uber Eats is shutting shop; it is doing so in other markets where it saw no clear path to becoming the main or number two online food delivery operator.
On Monday, within an email to staff, Khosrowshahi said Uber was closing 45 offices and laying off some 3,000 more persons and re-evaluating big bets in areas which range from freight to self-driving technology.
Khosrowshahi's latest restructuring plan comes significantly less than two weeks following the company said it could eradicate about 3,700 jobs and planned to save a lot more than $1 billion in fixed costs. Monday's decision means Uber is shedding roughly 25 % of its workforce within a month.
Stay-at-home orders have ravaged Uber's core ride-hailing business, which accounted for three-quarters of the company's revenue prior to the pandemic struck. Uber's rides business in April was down 80% from a year earlier.
However, Uber will continue its ride services in Bangladesh, which has been going from strength to strength since entering the country in 2016.
"Our number 1 priority now is to do everything possible to minimise the impact on our valued employees, restaurant partners, delivery partners and consumers who've supported us," adds the notice.
The notice though took the local startup industry by surprise.
About the Uber Eats exit declaration from the market, AD Ahmad, chief executive and co-founder of HungryNaki, Bangladesh's first food delivery platform, said the San Francisco-based company had burnt a huge amount of cash and already created a handsome customer base in the country.
"It really is true they have brought a great number of customers who weren't using the meals delivery service before."
This was best for the entire food delivery industry in Bangladesh.
"But in my own view, burning a huge amount of cash to get customers is not a decent business design to continue."
A few days ago they also announced the closure of operations in some other markets because they cannot create much impact there despite shelling out a pretty sum.
"Burning money is not an acceptable model any more and that's the reason they have been criticised in various markets," Ahmad added.
Soon after launching the service in Bangladesh, Uber Eats have already been offering huge discounts like Tk 300 to Tk 600 per order.
According to a written report of Reuters, Uber Eats can be closing down businesses in eight markets including the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Ukraine and Uruguay.
In the UAE, it'll wind down the Eats app and transition businesses to Careem. About 50 full-time roles will be affected, Reuters reads.
Uber said the discontinued and transferred markets represented 1 % of Eats gross bookings and 4 % of Eats adjusted core earnings losses in Q1 2020.
However, in america, Uber is in talks to acquire its rival food delivery platform GrubHub, a deal that could help stem losses from the cost-intensive business of building out delivery operations and present Uber an advantage in competing with industry leader DoorDash Inc.
After its founding in '09 2009, Uber quickly became among the world's hottest start-ups, transforming how millions of men and women bypass. Co-founder Travis Kalanick envisioned a future where robotaxis roam streets and delivery drones fly overhead -- with Uber at the centre of everything.
As the business grew, it spent big to expand into areas beyond ride-hailing, amassing billions in losses on the way.
Investor enthusiasm began to wane even prior to the pandemic. Uber had one of last year's most anticipated currency markets debuts. The result disappointed, with Wall Street increasingly attempting to see a path to profitability for Uber and other high-profile tech companies.
