“Short-form video is the hottest thing on the internet right now, and the market leader in monetizing the format is TikTok. The platform, owned by Beijing-based Byte Dance Ltd., has more than 1 billion active users of its AI-curated content. Its success is compelling competitors to copy its formula.

But imitation is proving hard, Parmy Olson discovered in a conversation with social-media consultant and industry analyst Matt Navarra. Facebook-owned Meta Platforms Inc., for example, has spent years delivering content to its users based on their social networks, and is now shifting to letting algorithms decide what people might like. Parmy argues that the pivot to video will make content moderation much more difficult, because it’s harder for computers to scan moving images for nasty content than text. Matt reckons that users will remain stuck in their silos and resistant to alternative viewpoints. “It’s one of those problems that social media is never really going to solve,” he says.”

Source: Bloomberg

Read the email CEO Dara Khosrowshahi recently sent to employees

Team Uber —

After earnings, I spent several days meeting investors in New York and Boston. It’s clear that the market is experiencing a seismic shift and we need to react accordingly. My meetings were super clarifying and I wanted to share some thoughts with all of you. As you read them, please bear in mind that while investors don’t run the company, they do own the company—and they’ve entrusted us with running it well. We get to set the strategy and make the decisions, but we need to do so in a way that ultimately serves our shareholders and their long term interests.

1. In times of uncertainty, investors look for safety. They recognize that we are the scaled leader in our categories, but they don’t know how much that’s worth. Channeling Jerry Maguire, we need to show them the money. We have made a ton of progress in terms of profitability, setting a target for $5 billion in Adjusted EBITDA in 2024, but the goalposts have changed. Now it’s about free cash flow. We can (and should) get there fast. There will be companies that put their heads in the sand and are slow to pivot. The tough truth is that many of them will not survive. The average employee at Uber is barely over 30, which means you’ve spent your career in a long and unprecedented bull run. This next period will be different, and it will require a different approach. Rest assured, we are not going to put our heads in the sand. We will meet the moment.

“Investors finally understand that we are a completely different animal than Lyft and other ridesharing-only platforms”

2. Investors finally understand that we are a completely different animal than Lyft and other ridesharing-only platforms. They are incredibly excited about the pace of our innovation, how quickly we are rebounding, and huge growth opportunities like Hailables and Taxi. While they acknowledge that we are winning, they don’t yet know the “size of the prize.” Their questions run the gamut from, “Has anyone other than you made money in on-demand transport?” to “Ridesharing has been around for awhile, why isn’t anyone else profitable?” They see how big the TAM is, they just don’t understand how that translates into significant profits and free cash flow. We have to show them.

3. Investors are happy with Delivery’s growth coming out of the pandemic and see that we have performed better than many other pandemic winners. I must admit that was a bit of a surprise for me because I firmly believe Delivery should be growing even faster. The primary questions were: “Is Delivery a good business and why?” and “What happens if we enter a recession?” We need to answer both of these questions with undeniably strong results.

4. Investors who asked about Freight love Freight. However, less than 10% of them asked about it. Freight needs to get even bigger so that investors recognize its value and love it as much as I do.

5. Meeting the moment means making trade-offs. The hurdle rate for our investments has gotten higher, and that means that some initiatives that require substantial capital will be slowed. We have to make sure our unit economics work before we go big. The least efficient marketing and incentive spend will be pulled back. We will treat hiring as a privilege and be deliberate about when and where we add headcount. We will be even more hardcore about costs across the board.

“The market is experiencing a seismic shift and we need to react accordingly.”

6. We have started to demonstrate the Power of the Platform, which is a structural advantage that sets us apart. As you know, our strategy here is simple: bring in consumers on either Mobility or Delivery, encourage them to try the other, and tie everything together with a compelling membership program. The advantage here is obvious, but we have to show the value of the platform in real dollar terms. We are serving multi-trillion dollar markets, but market size is irrelevant if it doesn’t translate into profit.

7. We have to do all of the above while continuing to deliver an outstanding and differentiated experience for consumers and earners. Whether someone is booking rides for a summer trip with friends, or a new parent relying on Uber Eats for everything from groceries to dinner and diapers, it’s on us to make every interaction excellent. The same goes for anyone who comes to Uber to earn. We responded to the pandemic by becoming earner-centric in a way we’d never been before. We are innovating for earners, thinking deeply about their experience, and putting ourselves in their shoes—literally—by driving, delivering and shopping ourselves. Because of hundreds of improvements in this area, people who want to earn flexibly are now coming to Uber first, where they benefit from our scale, diversification, and commitment to treating them with respect.

I’ve never been more certain that we will win. But it’s going to demand the best of our DNA: hustle, grit, and category-defining innovation. In some places we’ll have to pull back to sprint ahead. We will absolutely have to do more with less. This will not be easy, but it will be epic. Remember who we are. We are Uber, a once-in-a-generation company that became a verb and changed the world forever. Let’s write the next chapter of our story, working together as #OneUber, and let’s make it legendary.

GO GET IT!

Dara

Supermarket Tesco has teamed up with ride-hailing company Uber to expand its grocery delivery service.

Deliveries will come from 20 stores across the UK, including Edinburgh, Bradford, Portsmouth, Norwich, St Albans and Letchworth.

Uber Eats couriers will deliver products ordered via the supermarket’s Whoosh service.

The retail giant has been keen to cash in on the demand for rapid delivery which grew during the pandemic.

Tesco launched its Whoosh service, which aims to deliver food and drinks in under 60 minutes, in May 2021 and now covers 200 Express Stores across the UK.

Many supermarkets have signed up to food delivery platforms, including Uber Eats and Deliveroo, and Tesco hopes the partnership will help reach its target of offering the service from 600 stores by the end of the year.

 “It’s clear that the needs of businesses and consumers have been rapidly evolving in recent years and that trend is accelerating. This exciting new partnership will harness the best of Uber’s technology to power superfast Tesco deliveries across the UK.” Alex Troughton, Uber Eats UK

Fees for deliveries will be higher than those made via Tesco’s traditional online grocery service.

Source: BBC

The latest earnings season was a mixed bag for major global tech companies, and many of them took a beating on Wall Street last week. But there was one consistent bright spot in the results: Demand for cloud services and chipmaking. In a quarter blighted by Russia’s invasion of Ukraine, spiking inflation and China’s Covid Zero lockdowns, businesses kept buying internet infrastructure, whether as a service or as physical memory to fill up their own server farms.

Microsoft Corp.’s Azure revenue rose 46%, Alphabet Inc.’s cloud unit sales increased 44% and Amazon.com Inc.’s AWS scored a 37% increase plus, importantly, a 68% jump in future AWS purchase commitments to $88.9 billion. Contrast that with Amazon’s worries in e-commerce around oversupply and inflating fuel and labor costs or YouTube reeling from the war that’s taken an “outsized” toll on its European business, in the words of its chief financial officer.

Source; Bloomberg