Uber record huge £2.3billion losses in first quarter resulting from COVID-19 outbreak

Ride-hailing and food delivery firm Uber has announced a loss of £2.3billion ($2.9billion) for the first quarter of this year as a result of the COVID-19 outbreak.

However, Uber remain “encouraged” by early signs showing the markets beginning to open up after lockdown measures across the globe.

Dara Khosrowshahi, Uber CEO, said in a statement: “While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario.

“Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up. Our global footprint and highly variable cost structure remain an important advantage, as our expectation is that the Rides recovery will vary by city and country.”

The majority of the ride-hailing firm's quarterly losses came from a £1.7billion ($2.1billion) writedown on the value of investments overseas, which included Asian ride-hailing platforms Didi and Grab.

Income deriving from its ride-hailing service in the first quarter was up 2% to £1.97billion ($2.47billion), a figure that dropped more than 18% on the October to December period in 2019.

The operator’s losses of £2.1billion ($2.9billion) for the first quarter sits nearly three times more than the £800million ($1billion) loss posted 12 months earlier.

Nelson Chai, Uber CFO, said: “Our ample liquidity provides us with substantial flexibility to navigate the current crisis, but we are being proactive and taking actions to emerge stronger and more focused as a company.

“We have recently exited eight unprofitable Eats markets, significantly reduced the size of our customer support and recruiting teams, and merged our JUMP unit into Lime. Building on the steps we have already taken, we are continuing to look at all levers to ensure our core Rides and Eats businesses emerge from this crisis stronger than ever.”

Earlier this week Uber announced plans to reduce its operating expenses by reducing its customer support and recruiting teams by approximately 3,700 full-time employee roles.