Uber sees recovery in ride-hailing business as Covid-19 lockdowns are eased

Trip bookings are now down 70% from last year, an improvement from April's 80% drop

Uber chief executive, Dara Khosrowshahi, said the company is looking for new opportunities to consolidate its food delivery business. AP

Uber’s global ride-hailing business is showing signs of improvement, as authorities in many markets it operates in begin to ease coronavirus-related restrictions, the company’s chief executive said.

Trip bookings are now down about 70 per cent from last year, a slight improvement from April's 80 per cent drop, Dara Khosrowshahi said in a virtual technology conference hosted by Bank of America on Wednesday.

However, the business volume still remains significantly lower than the level seen last year.

The San Francisco-based company’s core business has taken a massive hit after governments imposed restrictions on peoples' movements to stem the spread of the coronavirus outbreak, gutting demand for ride-hailing services. Uber last month said its ride-hailing business has slumped more than 80 per cent year-on-year in April.

Last month the ride-hailing giant said it will lay off 6,700 employees and close down about 45 offices, including the one in San Francisco.

Mr Khosrowshahi said the company's rides business is seeing an incremental recovery on a weekly basis. In Hong Kong, the business has improved more than 80 per cent from its coronavirus-driven lows, he added.

The plunge in rides business is slightly offset by an uptick in the food delivery industry.

Uber Eats business has more than doubled and the gains are accelerating, said Mr Khosrowshahi, adding that the company is looking for new opportunities to consolidate the business further.

Uber led a $170 million (Dh623.9m) investment into scooter firm Lime last month, divesting its Jump e-bike business as part of the deal. The company is also reported to have initiated talks with GrubHub to reinforce its food delivery business, but Mr Khosrowshahi declined to comment on the subject.

The company’s food delivery business in recent weeks has been growing by at least 70 per cent compared to last year and its biggest cost – bonuses for drivers – has shrunk considerably as labour becomes cheaper.

Uber, which is still not profitable, lost $2.9 billion in the first quarter of this year, as its overseas investments were hammered by the contagion. It also withdrew its financial forecast for 2020 and said it would write down about $2bn in investments due to the pandemic.

Mr Khosrowshahi said he will forgo his salary for the remainder of this year to minimise the financial damage.

The company, which went public on the Nasdaq a year ago, said it is also evaluating other costs as it looks to drive down operating expenses.

Uber is also spending $50m on safety supplies, such as masks and sanitisers, which it will provide to its drivers. The firm is adding new features to its app to ensure the safety of passengers and help stem the spread of the virus.