Uber Says Business Is Starting To Pick Up Again, Lost $2.9B In Q1
People stayed home in droves during the first three months of 2020 to avoid being infected by the coronavirus. Ride-hailing service Uber was one of the many companies that bore the brunt, its trip volume dropping as much as 80 percent in April, which the company $2.9 billion.
Uber’s quarterly losses were more than most investors expected, but revenue — $3.54 billion in Q1 versus an expected $3.02 billion — exceeded projections, Business Insider reported.
However, four consecutive weeks of growth are providing some “restrained optimism” Uber CEO Dara Khosrowshahi said during a call with investors. “I won’t sugarcoat it,” he said. “Covid-19 has had a dramatic impact on (Uber) rides.”
But trip volume is slowly coming back, Khosrowshahi said. “There are some green shoots driving restrained optimism,” he said. “We’ve seen week-on-week growth globally for the past three weeks. This week is tracking to be our fourth consecutive week of growth.”
Uber said its overseas investments were hurt by the coronavirus pandemic, but the company is growing its Uber Eats food delivery business and aggressively cutting costs to ease the pain.
“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” Khosrowshahi said Thursday in a statement. “Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up.”
Uber shares rose as much as 8 percent in after-hours trading after the company said that ride volumes are starting to pick up after being down as much as 80 percent in April.
Uber relied heavily on Uber Eats to make up for the losses, and the company said it saw a 52-percent increase in gross bookings for the delivery segment, bringing it to $4.68 billion.ut cos
The ride-hailing giant said Thursday it is offloading its bike and scooter business, Jump, onto Lime, a company in which Uber invested $85 million. Jump had been losing about $60 million a quarter.
To cut costs, Uber announced on Monday that it would lay off about 14 percent of its total workforce — 3,700 employees.
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Number one Uber competitor, Lyft, has also reported a slow return of business the last few weeks.
The food delivery business has given Uber an advantage over competitors like Lyft which only do ride-hailing and no delivery, Khosrowshahi said.
“Rides-only players have been disproportionately affected,” he said. “Eats has allowed us to retain higher engagement with customers and we expect a faster recovery than rides-only players.”
Still, the pandemic threw a wrench in Uber’s plan to be profitable by the end of 2020, The Verge reported.