Uber Technologies Inc. (NYSE:UBER) Deprioritizes Financial Services Projects And California Wants Its To Reclassify Drivers


Uber Technologies Inc. (NYSE:UBER) CEO Dara Khosrowshahi indicated on Thursday that the ride-hailing company plans to deprioritize some of its financial projects like the digital wallet, credit cards, and instant payments.

Uber financial services head resigns as the company shelves digital wallet plans

The company has shelved plans for becoming a financial services firm and will now focus on food delivery and ride-sharing segments. Peter Hazlehurst, the company’s financial services head, is also stepping down, which comes after the company announced a 23% cut to its workforce last month. The company CEO indicated that the measures of reducing the workforce and reduction in investment in non-core projects will help the company weather the impact of COVID-19 pandemic on the business.

Hazlehurst announced his resignation on Thursday, having led the company’s financial services team since 2018. He indicated that his ambitious plan about the digital wallet that he presented last year at the Money 20/20 conference as the highlight of his career. Hazelhurst confirmed in an interview that if Uber was not going to pursue the products, then it was appropriate for him to get out of the way. He added that the Uber Money tea is currently working on Uber Eats projects.

California to force Uber and Lyft to reclassify their drivers

The ride-sharing company and its competitor Lyft Inc. (NYSE:LYFT) are facing off with Californian authorities regarding the classification of drivers as employees. In a dramatic escalation of the protracted war with the companies following the passing of the gig economy law, the state seeks to force the companies to reclassify the drivers.

Last month Xavier Becerra, the Attorney general of California and the attorneys of San Diego, San Francisco, and Los Angeles sued the companies stating that they had misclassified drivers as independent contractors. The state argues that under the AB5 law, drivers should be categorized as employees. The Attorney General now wants to file a preliminary injunction motion compelling the companies to reclassify their drivers.

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