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Uber lost $2.9 billion in the first quarter as the coronavirus hits ridership

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Uber reported a sharp drop in profits as its ridership declined because of the coronavirus. The ride-sharing company said Thursday that it lost $2.9 billion in the first three months of the year, including a $2.1 billion write-down on the value of some of its investments. Revenue was $3.5 billion, up 14% from the year-ago period, but rides were down 3% from the first quarter of 2019. 

"I won't sugarcoat it," CEO Dara Khosrowshahi said in conference call with investors Thursday. "COVID-19 has had a dramatic impact on rides, with the business down globally around 80% in April." 

Uber's profits also slid when the value of its investments in the China ride-hailing service Didi, Singapore-based Grab and others plummeted when demand collapsed in Asia. 

Earnings in Uber's ride-sharing segment fell $161 million during the quarter. Rides revenue grew to $581 million, a 203% increase from the same period last year.

Khosrowshahi said he's somewhat optimistic that profits could rise soon because major U.S. cities have reported an uptick in rides from late April into early May. New York City reported a 14% increase while Chicago, Los Angeles and San Francisco reported a 11%, 10% and 8%, respectively. 

"Growth bookings in large cities across Georgia and Texas – these are two states that have started opening up significantly – are up substantially at 43% and 53% respectively," he said during the call.

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Uber Eats, the company's food delivery segment, made $148 million during the quarter as more Americans sheltering at home ordered out. Khosrowshahi said the company saw surging demand for Uber Eats in mid-March. Part of that growth comes from Uber adding Shake Shack, Dunkin and Chipotle to the list of available restaurants, he said.

Despite the strong quarter, Uber Eats still has $313 million net loss when compared to this same period last year. Uber exited food delivery in eight countries this year, including the Czech Republic, Egypt and Honduras.

Cutting thousands of jobs

Moving to slash costs, Uber said earlier this week that it is laying off 3,700 employees in its customer service and recruiting departments, or 15% od its corporate staff. The company also instituted a hiring freeze and slashed its marketing budget, while Khosrowshahi waived the rest of his 2020 salary.  

Uber, Lyft and other ride-share drivers have seen a decline in customers as many Americans remain indoors under government stay-at-home orders. One analyst believes it could take three years before riders are fully comfortable hiring a car. 

Uber said Monday it will soon require passengers and drivers to wear face coverings in certain markets. Lyft followed suit on Thursday and announced similar requirements for passengers and drivers. 

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The pandemic has pushed Uber even further away from profitability. Uber has racked up three straight years of multibillion-dollar operating losses, according to its annual report, including an $8.6 billion loss for 2019. As of January 1, the company had cumulatively lost more than $16 billion. 

Uber isn't the only "gig economy" company feeling the effects of the coronavirus. Airbnb this week said it plans to cut 1,900 workers, or about 25% of its workforce. Lyft laid off nearly 1,000 employees, or 17% of its workforce, in April. Lyft also furloughed roughly 300 employees and reduced the salaries for its vice presidents and executives by 20% and 30%, respectively. 

— The Associated Press contributed to this report.

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