Uber's Ride-Hailing Business Shows Recovery In May, Food Delivery Continues On Pandemic Growth, CEO Says
Uber Technologies Inc. (NYSE: UBER) is seeing its business slowly recovering from lows hit earlier this year due to the novel coronavirus-related (COVID-19) lockdowns, Chief Executive Officer Dara Khosrowshahi said in a conference call with Bank of America analysts, Reuters reported.
What Happened
Khosrowshahi said the total rides in May were down 70% compared to the similar month a year ago, according to Reuters. This is an improvement over April, where the San Francisco-based company reported rides being down 80% year-on-year.
The Uber CEO further told BoA analysts that the ride numbers are improving every week, and in Hong Kong, rides have recovered more than 80% from the lows reached in the previous months due to the coronavirus, Reuters noted.
According to Khosrowshahi, the company's food delivery business, Uber Eats, continued to see growth in business similar to the first quarter, Reuters reported.
Analysts had previously expressed concerns if Uber Eats will continue the growth beyond the pandemic-related lockdowns which had forced people to stay at home and restaurants to halt in-house dining.
Why It Matters
The coronavirus pandemic brought the operations of ride-hailing companies, which have already been struggling to make profits, to a near halt.
As authorities across the United States lifted lockdowns put in place to curb the spread of the virus, the business was expected to see a slow rebound.
Rival Lyft Inc. (NYSE: LYFT) on Tuesday reported rides on its platform increased 26% compared to the previous month but remained 70% lower year-on-year nonetheless.
Both companies have also taken an impact from the widespread protests across the U.S. on their operations, including the need to comply with curfew hours.
Price Action
Uber shares closed 2.6% higher at $36.75 on Wednesday. The shares traded another 0.7% higher in the after-hours session at $37.
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