Uber ride-hailing services in recovery thanks to easing of Covid-19 lockdowns
Uber’s global ride-hailing business is showing signs of improvement, as authorities in many markets in which it operates begin to ease coronavirus-related restrictions, according to the company’s chief executive.
Trip bookings are now down about 70 per cent on 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.
However, business volumea still remain significantly lower than last year.
The company’s core business has taken a massive hit after governments imposed restrictions on people’s movements to stem the spread of the coronavirus outbreak, gutting demand.
Uber said its ride-hailing business slumped more than 80 per cent year-on-year in April.
Last month Uber said it would lay off 6,700 employees and close down about 45 offices, including its San Francisco headquarters.
Mr Khosrowshahi said there has been an incremental recovery in the company’s rides business on a weekly basis. In Hong Kong, the business has improved more than 80 per cent from its coronavirus-driven lows, he added.
The plunge in its rides business has been slightly offset by an uptick in food delivery services.
The Uber Eats business has more than doubled and gains are accelerating, said Mr Khosrowshahi. The company is looking for new opportunities to consolidate the business, he added.
Uber led a $170 million (Dh623.9m) investment into scooter operator Lime last month, divesting its Jump e-bike business as part of the deal.
The company is also reported to have initiated talks with GrubHub to reinforce its food delivery business, but Mr Khosrowshahi declined to comment on the matter.
The company’s food delivery business in recent weeks has been growing by at least 70 per cent compared to last year and its biggest cost – bonuses for drivers – has shrunk considerably as labour becomes cheaper.
Uber, which is still not profitable, lost $2.9 billion in the first quarter of this year, as its overseas investments were hammered by the contagion.
It also withdrew its financial forecast for 2020 and said it would write down about $2bn in investments because of the pandemic.
Mr Khosrowshahi said he will forgo his salary for the remainder of this year to minimise the financial damage.
The company, which went public on the Nasdaq exchange a year ago, said it is also evaluating other costs as it looks to drive down overheads and operating expenses.
Uber is also spending $50m on safety supplies, such as masks and sanitisers, which it will provide to its drivers. The firm is adding new features to its app to ensure the safety of passengers and help stem the spread of the virus.
The company is also reported to have initiated talks with GrubHub to reinforce its food delivery business