Uber slips deep into the red due to the corona crisis

In the first quarter of 2020, the loss of agent, Uber, increased 190 percent year over year to $ 2.9 billion.

The travel agent Uber has gone deep into the red due to the Corona crisis. In the first quarter, the loss increased by 190 percent year-on-year to $ 2.9 billion, as the taxi competitor announced on Thursday after the US market closed. “Our service business was hit hard by the pandemic,” said Uber boss Dara Khosrowshahi.

Nevertheless, the company managed to increase revenue 14 percent to $ 3.5 billion. This was mainly due to the strong growth of the food delivery service Uber Eats, which enjoyed great popularity during the lockdown. However, the spread of the virus only really became noticeable at the end of the quarter; in the current quarter, Uber has to cope with significantly greater strains. Khosrowshahi also commented on the current quarter in a conference call after the presentation of the balance sheet.

Transport business slumps by 80 percent

The bus service business dropped 80 percent in April, but has recovered steadily in the past three weeks, said the Uber boss. “We assume that the low point in the USA is behind us”. Recently there has been relatively strong growth again, said Khosrowshahi.

It was already clear that the Corona crisis would tear a huge hole in the balance sheet – Uber had already announced depreciation of up to $ 2.2 billion in mid-April. However, these large value adjustments were due to minority interests that Uber holds in other companies – such as the travel agent, Didi Chuxing in China and Grab in Singapore.

With austerity measures against the burglary

Uber is struggling against the drastic slump in business. Around 3,700 full-time jobs are to be cut. This would affect about 14 percent of the 26,900 employees. CEO Khosrowshahi wants to forego his basic salary by the end of the year. The company expects the layoffs to initially result in approximately $ 20 million in termination and severance payments. Further burdens would still be examined.

The quarterly report was well received by investors, particularly the statement that the core business is already recovering. The share rose strongly after the exchange. Although the loss was higher than expected, Uber’s sales were well above forecast. The group was last on the rollercoaster ride on the stock exchange – last month the share rose by 14 percent, but in the three-month perspective it is down almost 17 percent.

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