Uber stock pops after saying worst of coronavirus fallout is behind it

Dara Khosrowshahi, chief executive officer of Uber Technologies Inc., listens during a panel discussion at the Bloomberg Global Business Forum in New York, U.S., on Wednesday, Sept. 26, 2018.

Mark Kauzlarich | Bloomberg | Getty Images

Uber CEO Dara Khosrowshai said the company’s rides segment is seeing a 60% to 70% decline in areas hit hardest by the coronavirus pandemic, but believes the worst is behind it. 

“We believe we’re already seeing worst of the impact and the recovery in some places,” Khosrowshahi said on a call with analysts. “Once things start moving, Uber will too.” 

Uber stock rallied as much as 20% Thursday morning following the call. Shares of Uber had seen all-time lows this week as investors likely view Uber more as a travel company than tech business. Several health and government officials have asked the public to avoid non-essential travel and stay home in a bid to slow the spread of the coronavirus, which has caused fewer people to request Uber rides. Some officials have also closed restaurants and bars to the public, only allowing pick up or delivery. 

Because of that, Uber has seen an increase in its food delivery segment, Uber Eats. 

“Our Eats business is an important resource right now,” Khosrowshahi said. “Even in Seattle, our Eats business is still growing.” 

Uber did not update its guidance on Thursday because the situation is so fluid, but Khosrowshahi said it could do so in the future. While reporting fiscal fourth-quarter earnings in February, Uber moved its EBITDA profitability target to Q4 2020, ahead of its original promise of profitability in 2021.It also said it is forecasting a $1.35 billion loss at the middle of the range in terms of in earnings before interest, taxes, depreciation and amortization (EBITDA) for 2020.

Several companies have shut down or limited operations in an effort to slow the virus and warned of that financial impact. At least 9,159 coronavirus cases have been confirmed in the United States and at least 150 people have died, according to Johns Hopkins University.

Uber warned March 2 in an annual financial filing that “a pandemic or an outbreak of disease or similar public health concern, such as the recent coronavirus outbreak, or fear of such an event” could post a material risk to its business. The company has since suspended its carpool service and started to waive delivery fees for small businesses in some of its markets. 

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