You made it to the weekend! Before you close that browser and boot up Netflix, let’s cover some of the biggest tech stories of the week that we haven’t already touched on, including layoffs at Lyft and Lime, and an unusual uptick in VR sales.
Remember when rent-a-scooters were going to change the face of urban transportation? For a year or two in there, you couldn’t walk down a street in San Jose without having to step around (or trip over) a scooter or three.
In theory, these scooters fulfilled a demand for “last mile” transportation. People could activate the corresponding app, jump onto a nearby scooter, and travel the ten blocks to their destination much faster than on foot. That promise—along with the hype surrounding rideshare and tech-infused transportation services—led to massive investment; for example, Uber sniffed around acquiring either Bird or Lime as a quick way to enter the “micro-mobility market.”
But now that promise could be fading. Lime is reportedly laying off anywhere from 80 to 190 workers, according to a variety of sources including Axios and Bloomberg. “While Lime made some job cuts in January to chase profitability, pandemic-related lockdown orders have changed the company's math,” Axios added. Its arch-rival, Bird, has already laid off roughly a third of its staff due to COVID-19 worries.
The big question is whether interest in micro-mobility will revive once the COVID-19 pandemic is behind us, or whether the idea of ubiquitous scooters-on-demand was doomed from the very beginning. Whatever the case, Lime and its ilk face some hard quarters ahead.
For more COVID-19 content, check out the COVID-19 Jobs Resource Center.
Lyft Faces Reductions
Uber isn’t the only ridesharing firm that’s wrestling with the impact of the COVID-19 pandemic: Lyft has announced that it will lay off 17 percent of its workforce and furlough hundreds more. Members of the executive team will take 20-30 percent pay-cuts.
“It is now clear that the COVID-19 crisis is going to have broad-reaching implications for the economy, which impacts our business,” a Lyft spokesperson wrote in a statement to The Verge. “We have therefore made the difficult decision to reduce the size of our team. Our guiding principle for decision-making right now is to ensure we emerge from the crisis in the strongest possible position to achieve the company’s mission.”
Unlike Uber, which may also cut a significant portion of its staff, Lyft doesn’t have a built-out delivery business to blunt at least some of the impact from fewer daily riders. Lyft is currently testing a service that would deliver “essential items” (such as medical supplies and groceries), but it faces strong competition in that arena from Amazon, DoorDash, and other firms.
Due to COVID-19, Lyft’s ridership has dropped roughly 75 percent. Once the pandemic is behind us, how long will it take that business to revive?
Oculus Sales Spike
In a bit of lighter news, Facebook’s Oculus VR headsets might actually become a success, at least if sales stay on the current trajectory. The company reported that it had earned $297 million in “non-advertising” revenue during the first quarter of the year, largely driven by Oculus sales.
Although Facebook has long pushed Oculus (and virtual reality) as mainstream technology, it’s had trouble breaking out from a small niche of hardcore, well-monetized gamers. Even pricing the Oculus Quest at $399 didn’t seem to help matters, at least at first. So what’s behind this solid financial performance?
Facebook CEO Mark Zuckerberg pinned it on the COVID-19 pandemic. “As people can’t go out and into the world as much, the ability to have technology that allows us to be physically present or feels present,” he said during the company’s investor call this week. “Whether that’s Quest or Portal or any of the software that we’re building around video presence, that stuff has certainly seen especially large spikes in usage. It’s possible that this accelerates some of the trends around things like virtual and augmented reality.”
The Verge, meanwhile, thinks that the spike in Oculus sales is due to gamers rushing out to buy a headset in order to play Valve’s “Half-Life: Alyx,” a new, VR-centric chapter in the long-running “Half-Life” series. And sure, that could be it; after all, “Half-Life” is enormously popular, and it often takes a game in an enormously popular series to drive adoption of a new gaming platform.
But even if “Half-Life” is driving those sales, does that mean Oculus (and VR) are approaching the mainstream? That’s a question only the next few quarters will answer. Perhaps the pandemic will really make homebound people more interested in virtual worlds.
Have a great weekend, everyone! Keep washing those hands!