Uber, the ride-hailing giant, lost around $2.9 billion in the first quarter of 2020 as its foreign investments hit due to the COVID-19 pandemic, but the company is seeing towards its mounting food delivery business and strict rate-cutting to ease the loss. The company officials announced to offload Jump (its scooter and bike business) to Lime. Lime is a company in which Uber is investing about eighty-five million US dollars. Uber is losing around sixty million dollars in Jump business in the first quarter.
#Uber lost a whopping $2.9 billion in the first quarter as its overseas investments were hammered by the #COVID19Pandemic, but the company is looking to its growing food delivery business and aggressive cost-cutting to ease the pain.https://t.co/YoEazb3oZh
— The New Indian Express (@NewIndianXpress) May 8, 2020
Dara Khosrowshahi, the Chief Executive of Uber, stated that ongoing pandemic hit their ride-hailing business badly due to which they took instant action to preserve the strength of their accounts by focusing extra resources on Uber Eats and preparing for any recovery scenario. Together with the surge in food delivery orders, the company gain encourages the initial signs of the markets that are starting to open back up.
Uber to lay-off 3700 full-time workers
The United States-based Uber announced on Wednesday to cut thirty-seven hundred permanent employees or around fourteen percent of its workforce because people avoiding contamination either by limiting their contact with others or stay at home. Last month, the main United States rival of Uber, Lyft announced to dismiss 982 workers, or seventeen percent of its workforce because of dropping customer demand. Whereas, Careem, the Middle East rival of Uber, lay off its workforce by thirty-one percent.
Earlier this week, Uber said it was cutting 3,700 full-time workers, or about 14 per cent of its workforce, as people avoiding contagion either stay indoors or try to limit contact with others.https://t.co/djgn5xmFjh
— Economic Times (@EconomicTimes) May 9, 2020
Uber’s Eat Business is surging in contrary to Ride Business
The multinational ride-hailing company carried in about $3.54 billion in revenue in the financial year’s first quarter, up about fourteen percent from the same duration last year. Whereas, it’s Eats meal delivery business’ revenue grew positive fifty-three percent as customers stayed at home after the government orders. The firm withdrew markets where its food delivery business was unsuccessful, including Honduras, Czech Republic, and Egypt. However, it added key accounts, including Shake Shack, Chipotle, and Dunkin’, as well as started delivery from the convenience and grocery stores.
On a conference call with investors, Khosrowshahi tells them that at the moment when their ride business is down because of lockdown orders, their Eats business is surging and making a significant profit. Their big opportunity for Eats becomes bigger. The gross bookings raised eight percent to $15.8 billion, with fifty-four percent progress in the food delivery business, while it faced a three percent decline in rides, on a constant currency basis.
The bottom line of Uber badly hurt in the 2020 first quarter when the value of its investments in Didi, the Chinese ride-hailing service, Grab, Singapore-based ride-hailing, and others plunged by around $2.1 billion as demand collapsed in those regions. The company is continuously facing the challenges in the second quarter also. Globally, rides were eighty percent down in April, then the previous year the same month. Although rides are increasing for the last three weeks, the bookings in big cities across Texas and Georgia, two major states that start re-opening, are up around fifty percent and forty-three percent respectively from their lowest points.
Read Also: Uber just sold its Uber Eats in India to Zomato