Uber said in a call to its investors that it has enough money in hand to combat the current coronavirus crisis. The company said that it saw a massive 60-70 percent declines in the rides in the worst-hit areas; however, the food delivery business line is doing good. The Uber stock rallied by 40 percent on Thursday morning, which also led to a rise in the share of Lyft by 31 percent.
Uber has enough Cash to Combat Virus crisis
The stock prices of Uber and Lyft went up last Thursday after Uber said that it has plenty of cash to sail smoothly through the coronavirus pandemic slowdown. Even though there is a massive decline in the ride-sharing and rides business, the other areas like food delivery are picking up. With a lockdown in most of the big cities of the world, people are confined home; thus, there is no demand for rides.
Lyft and Uber Shares Surged
The shares of the company went up by as much as 40 percent after the investor call, the stocks of Uber closed at 38.26 percent at the rate of 20.49 dollars per share. The shares of Lyft also surged after the announcement of Uber. The company did not announce any measures to deal with the coronavirus pandemic.
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CEO Detailed the Situation
The CEO of Uber, Dara Khosrowshahi, said that the rides segment is declining; however, Uber Eats business has seen a rise in demand. He further added that “We believe we already see the worst of the impact and the recovery in some places,” Khosrowshahi said on a call with analysts”.
Uber Eats is in demand right now
“Once things start moving, Uber will, too. Our Eats business is an important resource right now”. “Even in Seattle, our Eats business is still growing”.
There has been a complete lockdown in most of the cities in the US due to which there is a lack in demand for uber rides, however since the restaurants are closed for dine-in and pickup, the need for uber eats food delivery services has spiked.
Company has enough liquidity
As per the Uber CEO, the company has enough liquidity to get through the coronavirus crisis until the situation gets normal. He said that” In any crisis, liquidity is the key,” and the company has enough cash at hand. He added that the company has 10 Billion dollars in unrestricted cash, which is enough to combat the pandemic crisis.
Uber closed Carpool due to coronavirus outbreak
Earlier in March, the company said 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,” can create a tumultuous situation for the business. Uber has closed its carpool and ride service right now and has also given a delivery fee waiver to many small businesses.