Angela Lang / CNET
It wasn’t easy for Uber as a public company. the novel Corona virusdidn’t help, which brought much of the hail fighting business to a standstill. On Thursday, Uber’s first quarter results showed the company’s financial problems and significant losses.
Uber said its sales grew 14% year over year to $ 3.54 billion and slightly exceeded sales average analyst forecast of $ 3.51 billion. However, the company recorded a net loss of $ 2.9 billion in the first quarter, which was higher than analysts expected. It’s the biggest loss Uber has seen in the past three quarters.
“While our ride was hit hard by the ongoing pandemic, we quickly took steps to maintain the strength of our balance sheet, focus additional resources on Uber Eats, and prepare for any recovery scenario,” said Dara Khosrowshahi, Uber CEO, a statement . “Our global presence and very variable cost structure remain an important advantage as we expect the recovery of trips to vary by city and country.”
As the CEO indicated, Uber saw its core business with hail ships significantly affected by the pandemicEven if the company tried to expand the offer. In recent months, the company has fired employees, closed offices around the world, and reduced its share price by 68% from $ 41 in mid-February to $ 13 in mid-March.
Uber is not alone. The entire economy came to a standstill during the pandemic, and travel-related companies have been severely affected. Airbnb said it was Layoff of 25% of his employees Earlier this week, and Lyft said last week that it was Let go of 17% of the workforce.
On Tuesday, Uber said it was Layoff of 14% of his full-time employeesabout 3,700 people. The company said the layoffs are part of a plan to reduce operating costs due to the “economic challenges and uncertainties that the COVID-19 pandemic will bring.” Khosrowshahi also agreed to waive his basic salary for the rest of the year. Last fall, Uber fired more than 1,000 employees in three rounds of cuts.
During the first quarter, Uber stuck to its “Uber for everything” mantra, focused on Uber Eats’ grocery delivery service, and launched new initiatives such as: B. Free rides and meals for healthcare workers at the forefront. The company has also used its Uber Freight truck service to deliver goods across the country.
On Thursday, Uber said it was Managing an investment of $ 170 million in the scooter company Lime. Other supporters are Alphabet, Bain Capital Ventures and GV. With the investment, Lime Ubers acquired bike and scooter rentals, known as Jump. Uber said Lime will now continue to be integrated into his app.
Uber also has hurdles on other fronts. Together with Lyft, the company faces a lawsuit from the State of California that could cost hundreds of millions of dollars in civil sanctions. Prosecutor General Xavier Becerra, filed the lawsuit against the two hail fighting companies on Tuesday, allegedly You have violated state law AB 5. The law, which came into force in January, aims to ensure that workers have adequate occupational safety by being classified as workers.
And as long as much of the world provides protection with the outbreak of the corona virus, Uber’s business will likely stay in the flow.
“On the other side of this dark valley, Uber’s business model is likely to be (at least) very different in the next few years,” Wedbush analysts wrote in one Note On Wednesday. “The company needs to streamline costs and smaller operations to focus on achieving profitability in this ‘new normal’ environment.”