Uber (NYSE:UBER) saw its share price jump by a whopping 40 percent on Thursday as the company pronounced during an impromptu investor call that it has sufficient cash-on-hand to pull through the marked decline in its core ridesharing business amid the expanding lockdowns and quarantines instituted to combat the coronavirus (COVID-19) epidemic.
Uber CEO Dara Khosrowshahi conceded that the company’s ride-hailing segment has witnessed a 60 to 70 percent decline in business activity in areas that have been hit particularly hard by the ongoing coronavirus pandemic. He went on to note that:
“We believe we’re already seeing worst of the impact and the recovery in some places. Once things start moving, Uber will too.”
Nonetheless, the company was quick to point out that the impact of this precipitous decline in core business activity was being somewhat counterbalanced by growth in the company’s food delivery unit – UberEats. Bear in mind that officials in various jurisdictions have shuttered restaurants and bars to the general public, allowing only food pick-up or delivery so as to enforce social distancing. This development has induced a dramatic surge in the business activity of Uber’s food delivery segment.
Dara Khosrowshahi stated that:
“Our Eats business is an important resource right now. Even in Seattle, our Eats business is still growing.”
Uber did not provide updated guidance during the investor call as the situation remains fluid, as per the company’s CEO. As a refresher, during its earnings call for the fourth quarter of 2019, Uber had moved ahead its target for attaining profitability – on an EBITDA basis – to the fourth quarter of 2020 from the previous guidance that fell in 2021.
In a crucial announcement, Mr. Khosrowshahi stated that Uber maintained ample liquidity – in the form of $10 billion in unrestricted cash – to sail through the coronavirus pandemic.
This declaration of ample liquidity has gone a long way in soothing the frayed nerves of Uber’s investors. Uber had warned on the 2nd of March 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.” Since that time, the company has suspended its carpool service and waived delivery fees for small businesses in some of its markets. All of these developments pummeled the company’s stock. As an illustration, Uber’s share price had tumbled to $14.82 on Wednesday, marking a whopping 68 percent decline from its all-time high of $47.08 hit back in June 2019.
Following today’s investor call, however, Uber’s stock jumped higher by as much as 41 percent. As of 11:15 a.m. ET, the stock is trading at $20.86, substantially above the previous intraday high of $19.84 recorded earlier this morning.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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