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Uber rides are down 70 percent in some markets amid coronavirus pandemic

The ride-hailing company rushed to assure investors Thursday it will be able to withstand the crisis

Uber has encouraged drivers who ferry passengers to transition to meals, as the company has experienced a rapid demand increase in its Uber Eats food delivery service. (Akio Kon/Bloomberg)

Uber executives rushed to assure investors Thursday that it could weather the coronavirus storm, even as they discussed a worst-case projection of ridership dropping as much as 80 percent for the rest of the year.

Already, passenger trips have declined by 60 percent to 70 percent in cities worst hit by the spread of the novel coronavirus, including Seattle, Uber chief executive Dara Khosrowshahi said in a call with analysts. Trips declined in Hong Kong by 45 percent but are on the rebound.

The ride hailing giant, which went public last year, has lost billions of dollars and laid off hundreds of workers in recent months, even before the coronavirus outbreak. This week, the company canceled its pool option and some investors have questioned how the company will make it through the pandemic.

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Khosrowshahi said Thursday it was too early to update its guidance for the coming quarter, which ends in June. But Uber has $10 billion of cash on hand, something the CEO said will give the company flexibility to withstand significant drops in demand.

“We’ve certainly got the balance sheet to stay the course,” he said.

He added that Uber has already taken aggressive measures to cut costs internally, including freezing its head count and clawing back recruiting and marketing efforts, saving the company $150 million.

The company’s stock rose 30 percent after the call in early trading to sell at around $19 per share, a $4 increase from the opening bell. That’s down from the company’s opening trading price of $42 per share last year.

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The company’s more realistic projection, Khosrowshahi said, was that cities that suffered outbreaks would recover in two-month cycles, the low point of which would hit in the coming quarter.

“As soon as cities start moving, Uber will too,” Khosrowshahi told investors. “ … The first use case that we see coming back is the commute use case, it’s getting to work. People want to get back to work, they want to get back to living.”

In the meantime, he said, the company has experienced a rapid demand increase in its Uber Eats food delivery service, as customers remain cloistered in their homes in the name of social isolation. Bars and restaurants around the country have shuttered by public order, though officials in many cases have allowed restaurants to continue a carryout-only business.

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Uber has encouraged drivers who ferry passengers to transition to meals. “Our Eats business has an instant inflow of people who are ready to work,” Khosrowshahi said. He said the company has used the crisis to cross-promote its Eats platform to passengers who typically just used the ride-hailing feature.

The majority of Uber rides customers don’t use Eats, but they do use other food delivery services. The company is being “aggressive,” he said, in trying to move customers over to both business lines.

Coronavirus: What you need to know

Vaccines: The CDC recommends that everyone age 5 and older get an updated covid booster shot designed to target both the original virus and the omicron variant. Here’s some guidance on when you should get the omicron booster and how vaccine efficacy could be affected by your prior infections.

Variants: Instead of a single new Greek letter variant, a group of immune-evading omicron spinoffs are popping up all over the world. Any dominant variant will likely knock out monoclonal antibodies, targeted drugs that can be used as a treatment or to protect immunocompromised people.

Tripledemic: Hospitals are overwhelmed by a combination of respiratory illnesses, staffing shortages and nursing home closures. And experts believe the problem will deteriorate further in coming months. Here’s how to tell the difference between RSV, the flu and covid-19.

Guidance: CDC guidelines have been confusing — if you get covid, here’s how to tell when you’re no longer contagious. We’ve also created a guide to help you decide when to keep wearing face coverings.

Where do things stand? See the latest coronavirus numbers in the U.S. and across the world. In the U.S., pandemic trends have shifted and now White people are more likely to die from covid than Black people. Nearly nine out of 10 covid deaths are people over the age 65.

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