Uber says it's not people going back to work fueling its recovery — it's people going out during 'party hours'

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A driver adjusts his face mask as Uber and Lyft drivers with Rideshare Drivers United and the Transport Workers Union of America conduct a ‘caravan protest’ outside the California Labor Commissioner’s office amidst the coronavirus pandemic on April 16, 2020 in Los Angeles, California. The drivers called for California to enforce the AB 5 law so that they may qualify for unemployment insurance as the spread of COVID-19 continues. Drivers also called for receiving back wages they say they are owed.

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Uber said on Wednesday trip requests were gradually picking up, but still remained significantly below prior year levels, as several countries start to lift coronavirus-led restrictions.

Trip requests are now down about 70% from a year earlier, slightly lesser than April's 80% drop, Chief Executive Officer Dara Khosrowshahi said in a conference with Bank of America analysts.

He said the company's rides business is improving on a week-over-week basis, adding that the surge in food-delivery orders at Uber Eats recorded in the first quarter, showed no signs of slowing in May, easing concerns of investors who thought it could be a one-off trend during the pandemic.

Ridership in Hong Kong, which has been one of the most successful cities in the world at containing the novel coronavirus outbreak, has recovered more than 80% from its coronavirus-driven lows, Khosrowshahi said.

However, the riders coming back are not the ones Uber initially expected. 

"Our early hypothesis was that the use case of people going back to work will be the leading use case, and we saw some signal there," Khosrowshahi said. "But actually, the return is pretty broad. Party hours in a lot of these markets. People want to get out again safely, where they want to get out again, they want to socialize again and kind of get as much as they can their prior lives back."

Uber's disclosure -- which was in line with the rebound it said it expected in April -- did little to excited investors, and shares were unchanged through the end of the trading day Thursday. 

Rival Lyft also signaled a rebound in ridership on Tuesday, saying rides on its platform rose 26% in May from the previous month.

(Reporting by Ayanti Bera in Bengaluru; Editing by Amy Caren Daniel)

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