Uber abandons 2020 guidance amid Covid-19 lockdown
Uber has withdrawn its 2020 financial guidance and plans to write down around $2bn in investments amid the Covid-19 lockdown.
The ride-hailing firm had expected to book adjusted net revenue of up to $17bn and an adjusted loss of between $1.45bn and $1.25bn.
But Uber yesterday said Covid-19 made it “impossible” to predict future financial results.
The company added: “Given that much of the world is currently on some form of coronavirus lockdown, we expect to record an impairment charge against the carrying value of some of our minority equity investments.
“We believe these investments will be reduced by an estimated range of $1.9bn to $2.2bn during the three months ended March 31, 2020, due to the impact of the pandemic on the estimated value of these entities.”
A financial assistance programme for drivers and delivery people struggling due to the pandemic has also hit revenue.
The scheme will cost Uber up to $22m in the first quarter and an estimated $60m to $80m in the second quarter.
Uber’s share price actually rose 1.7 per cent today, though, after the stock slumped in early March as coronavirus spread into Europe and later the US.
Uber CEO Dara Khosrowshahi assured analysts on last month that even in an extreme scenario where ride revenue declines by 80 per cent for the rest of the year, Uber will still have $4bn of unrestricted cash.
The company has also pointed to a surge in demand for food delivery, which is expected to make up for some of the shortfall in taxi journeys.
Uber is scheduled to release its quarterly report on 6 May.
The firm said it looked “forward to sharing further details on the steps we are taking to continue to strengthen our financial and operational position, improve our cost structure, and support our communities during this crisis”.
“We will also provide details on how our businesses are performing across the broad geographical footprint where we operate, as well as trends we are seeing across business lines,” Uber added.