Uber sees recovery in ride-hailing business as Covid-19 lockdowns are eased

04 Jun 2020 8:45 PM
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Uber’s global ride-hailing business is showing signs of improvement, as authorities in lots of markets it operates in begin to help ease coronavirus-related restrictions, the company’s leader said.

Trip bookings are actually down about 70 per cent from last year, a slight improvement from April's 80 per cent drop, Dara Khosrowshahi said in a virtual technology conference hosted by Bank of America on Wednesday.

However, the business volume still remains drastically lower than the particular level seen last year.

The San Francisco-based company’s core business has taken an enormous hit after governments imposed restrictions on peoples' movements to stem the spread of the coronavirus outbreak, gutting demand for ride-hailing services. Uber last month said its ride-hailing business has slumped more than 80 % year-on-year in April.

Last month the ride-hailing giant said it'll lay off 6,700 employees and close down about 45 offices, including the one in SAN FRANCISCO BAY AREA.

Mr Khosrowshahi said the business's rides business is seeing an incremental recovery on a weekly basis. In Hong Kong, the business has improved more than 80 % from its coronavirus-driven lows, he added.

The plunge in rides business is slightly offset by an uptick in the meals delivery industry.

Uber Eats business has a lot more than doubled and the gains are accelerating, said Mr Khosrowshahi, adding that the business is looking for new opportunities to consolidate the business enterprise further.

Uber led a $170 million (Dh623.9m) investment into scooter firm Lime last month, divesting its Jump e-bike business within the deal. The company is also reported to have initiated talks with GrubHub to bolster its food delivery business, but Mr Khosrowshahi declined to comment on the subject.

The company’s food delivery business in recent weeks has been growing by at least 70 % compared to last year and its own biggest cost - bonuses for drivers - has shrunk considerably as labour becomes cheaper.

Uber, which continues to be not profitable, lost $2.9 billion in the first quarter of the year, as its overseas investments were hammered by the contagion. It also withdrew its financial forecast for 2020 and said it could jot down about $2bn in investments due to the pandemic.

Mr Khosrowshahi said he'll forgo his salary for the remainder of the year to minimise the financial damage.

The business, which went public on the Nasdaq this past year, said additionally it is evaluating other costs since it looks to operate a vehicle down operating expenses.

Uber can be spending $50m on safety supplies, such as masks and sanitisers, which it'll provide to its drivers. The firm is adding new features to its iphone app to guarantee the safety of passengers and help stem the spread of the virus.

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