Uber sees rides recovering from Covid-19 lows, banks on food-delivery biz

Uber reported it had seen encouraging signs in markets hit by the pandemic and posted a 14% rise in revenue for the first quarter, supported by a jump in food-delivery orders at its Uber Eats business.

Uber Technologies Inc's ride service bookings slowly recovered in recent weeks as the company expects a coronavirus-related slowdown will delay the goal of becoming profitable by a matter of quarters, not years, Chief Executive Dara Khosrowshahi said on Thursday.

He spoke after Uber reported it had seen encouraging signs in markets hit by the pandemic and posted a 14% rise in revenue for the first quarter, supported by a jump in food-delivery orders at its Uber Eats business.

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.

The company, which makes the bulk of its revenue through ride-hailing, said trip requests had dropped 80% globally in April, but were slowly recovering. In the United States, Uber's most important market, ride requests were up 12% last week from their lowest point in April.

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.

Global lockdown orders aimed at curbing the spread of the virus were a silver lining for Uber's loss-making food delivery unit, with many new customers and restaurants signing up for the service as eateries were shuttered.

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.

Car ownership is a trap that can be prevented: Uber CEO Dara Khosrowshahi

He says the younger generation doesn't dream of owning a car, but instead wants the freedom of having any service on demand.

Uber Chief Executive Officer Dara Khosrowshahi says the younger generation doesn’t dream of owning a car, but instead wants the freedom of having any service on demand. He also feels that established protocols and industries are the enemies of innovation.

“Car ownership is a trap that can sometimes be prevented. India does not need to be trapped by these establishments. India can actually be the innovator for the developing countries of the world,” Khosrowshahi said here on Tuesday. He was responding to a question seeking comment on Finance Minister Nirmala Sitharaman’s assessment that the slowdown in the domestic auto industry was due to a shift in the millennials’ preference for ride-hailing apps.

On concerns that the company is losing a lot of money in India, Khosrowshahi said, “The profitability characteristics of our business here (in India) are improving. India is a fundamental part of Uber’s growth; it’s among the top 10 markets for us. We continue to lean on and invest in India.”

“We are going to invest the profits from some of our more mature products into your products, such as Auto, Moto, and Transit,” he added.

The Uber CEO was in New Delhi to announce a partnership with Delhi Metro Rail Corporation (DMRC) under which the Uber app will get integrated with the details of metro trains to provide commuters a seamless experience while travelling from one point to another.

Delhi is the second Asia-Pacific city where Uber will provide riders with the ability of planning their transit journey with real-time information and end-to-end directions via its app.

Initially, Uber will only provide an overview of routes on which public transport is available. In the long term, however, there is a plan to integrate payments for different modes of transport within the Uber app.

Khosrowshahi agreed that India was a competitive market, with consumers wanting a great service at low prices. “India has also become the innovation gateway for Uber which it can export to other parts of the world,” he said.

Business Standard