Uber Sees Rides Recovering From Covid-19 Lows, Banks On Food-delivery Biz

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Khosrowshahi said stringent cost cutting, to the tune of more than $1 billion (808 million pounds) in 2020, would ensure the company stayed on track. Uber on Wednesday said it would lay off 3,700 full-time employees, or roughly 17% of its headcount.

In large cities in Georgia and Texas, U.S. states that have reopened parts of their economy in recent weeks, trips were up around 45% from their low point in April, Uber said.

Uber recorded $3.54 billion in total revenue for the first three months of the year, roughly in line with analyst estimates, but still posted a $2.9 billion loss in the period. That included a $2.1 billion pretax writedown of the value of some of Uber's minority investments.

Uber had originally promised to be profitable on an adjusted basis before interest, taxes, depreciation and amortization by the end of this year, but withdrew its full-year guidance on April 16, citing the uncertainty surrounding the global virus outbreak.

The company on Thursday reported a $612 million adjusted EBITDA loss for the first quarter.

Excluding the $2.1 billion of writedowns, Uber reported a loss of 64 cents per share, compared with Wall Street analysts' expectations of an 88-cent loss, according to IBES data from Refinitiv.

Revenue at Uber's ride-hailing business increased 2% on a yearly basis, but dropped more than 18% from the prior quarter.

One-off trend?

Uber's food delivery business has traditionally been a drag on the company's bottom line due to heavy spending on customer promotions and driver incentives.

Uber Eats recorded a $313 million loss in adjusted EBITDA in the first quarter, reducing losses by 32% from the previous quarter. The company said it expected a similar loss in the second quarter.

Analysts welcomed the jump in delivery orders but cautioned it could be a one-off trend during the pandemic.

"The big unknown is whether Uber will be able to retain these Uber Eats customers when the economy opens back up," Haris Anwar, analyst at investing.com, said.

Khosrowshahi said the company was now working on entering the grocery delivery market, both through acquisitions and expansions and even considering package delivery through its ride-hail drivers.

Nearly two-thirds of Uber's revenue is generated in the United States and Canada, where authorities began ordering people to stay indoors in the middle of March.

Uber's competitor, Lyft, on Wednesday reported a surprise 23% jump in revenue and said strict cost-cutting measures ensured it remained on a "path to profitability."

Lyft shares surged more than 20% on Thursday.

Unlike Lyft, whose sole focus is transporting people and which operates only in the United States and parts of Canada, Uber's business is global. Some European and Asian countries enacted virus-related curbs earlier in the quarter.