A collapse in global ride-sharing demand was offset by a surge in food delivery, Uber said, as the company reported stronger-than-anticipated revenues for its first quarter even while its losses ballooned to almost $3bn.
The company’s loss of $2.9bn for the quarter is an almost 200 per cent increase year-on-year. It attributed the loss to a previously-announced $2.1bn writedown on the value of its investments, which it blamed on the impact of the coronavirus pandemic. Uber’s portfolio includes minority stakes in China’s Didi Chuxing and Grab, an app popular in south-east Asia.
Without the charge, Uber said its net losses would have been $1.1bn.
Although gross bookings for rides dropped 5 per cent from the same period last year, overall revenues increased to $3.5bn, up 14 per cent on 2019, and slightly above Wall Street’s expectations.
As customers began entering lock down, use of Eats surged, Uber said. Gross bookings increased 52 per cent year-on-year — though the division still operated at a loss of $313m, discounting interest, tax, depreciation and amortisation costs.
The company did not offer guidance for the second quarter.
“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,” said Dara Khosrowshahi, Uber’s chief executive.
“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. Our global footprint and highly variable cost structure remain an important advantage, as our expectation is that the Rides recovery will vary by city and country.”
Financial assistance for drivers, plus free rides and deliveries for vulnerable citizens and medical workers, cost the company $19m in revenue, it said. A further $5m was spent on other Covid-19-related measures, mostly the procurement and distribution of personal protective equipment.
On Wednesday the company announced it would dismiss 3,700 employees, about 14 per cent of its workforce, signalling more job cuts may be on the way.
The company also recently abandoned its Eats business in seven countries, and shifted its Middle East food delivery efforts into Careem, a subsidiary. On Thursday Uber announced it had led a $170m investment round in the scooter rental service Lime, a move that enables the company to shift its lossmaking Jump bikes division on to its rival’s balance sheet.
Investors had been bullish ahead of Uber’s earnings after encouraging signs from rival Lyft on Wednesday, which reported a better than expected first quarter and signs of a recovery across the US and Canada, despite a sharp drop in business due to coronavirus. For the month of April, rides were down 75 per cent year-on-year, Lyft chief executive Logan Green said, although it showed signs of a slow rebound.
Uber shares fell more than 3 per cent in after-hours trading on Thursday.