San Francisco: Uber said Thursday its losses widened to $2.9 billion (Dh10.7 billion) in the first quarter as the ridesharing giant felt the impact of the global pandemic lockdowns while pointing to signs of a tentative recovery.
The San Francisco-based company said ride bookings were up eight per cent over the first three months of the year despite the lockdowns that began in the final weeks of the quarter.
It saw 53 per cent revenue growth in its Eats restaurant take-away delivery service, as more people ate in to avoid the coronavirus.
Uber chief executive Dara Khosrowshahi said the data from April suggests a massive impact from the COVID-19 outbreak but also some indications of a rebound in some markets.
“I won’t sugarcoat it - COVID-19 has had a dramatic impact on Rides with business down globally around 80 per cent in April... but there’s some green shoots driving restrained optimism,” he told analysts.
Khosrowshahi said Uber was seeing a “fourth consecutive week of growth” with bookings up 12 per cent last week.
The net loss in the quarter was nearly triple the level of a year earlier and included some $2.1 billion in write-downs of the value of some of its assets - which companies are required to count as losses under accounting rules.
Gross bookings were up eight per cent from a year ago to $15.7 billion, with revenues to the company rising 14 per cent to $3.5 billion.
Weathering the crisis
Uber has said it has ample cash on hand to ride out the coronavirus pandemic, which has forced billions of people to remain at home.
“Our ample liquidity provides us with substantial flexibility to navigate the current crisis, but we are being proactive and taking actions to emerge stronger and more focused as a company,” said chief financial officer Nelson Chai.
Uber has taken steps including the layoff of some 14 per cent of its workforce.
It said earlier Thursday it was leading a $170 million investment in Lime as part of a plan to merge its Jump electric bike and scooter operations into the rival service.
The tie-up will free Uber to concentrate on its core rideshare and delivery services while Lime - which operates in some two dozen countries - will manage scooters and bikes including the Uber Jump fleet.
Uber and other “sharing economy” services are expected to feel a massive impact from the coronavirus outbreak which has dampened economic activity and made travelers more cautious.
Rival rideshare platform Lyft this week reported a loss of $398 million, narrower than a year ago, as revenues increased to $956 million.
The two firms listed shares last year with an eye toward long-term profitability, goals which have become more elusive in the current environment.
“On the other side of this dark valley, the Uber business model will likely look a lot different for the next few years (at least) and the company must rationalize costs and a smaller operation to focus on attaining profitability in this ‘new normal’ backdrop,” said Daniel Ives of Wedbush Securities in a research note.
“On the ride sharing front, Uber and Lyft face Herculean-like challenges looking ahead as the new reality will likely change the business models of these companies (and competitors) for the foreseeable future.”