- Uber’s business has been impacted significantly by the coronavirus, with the ride sharing giant noting that ride volume is down by nearly 70% in some areas.
- The company has enough cash on hand to survive the current coronavirus crisis, according to CEO Dara Khosrowshahi.
- Uber has temporarily suspended Uber Pool rides to help stop the virus from spreading.
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In a call with investors today, Uber had some good news and bad news to share. The bad news is that the volume of people taking Ubers has fallen drastically, with CEO Dara Khosrowshahi noting that ride volume is down nearly 70% in some cities. This, of course, shouldn’t come as much of a surprise given that many people are quarantined and, if we’re being honest, there’s not really anywhere to go given that restaurants, bars, gyms, and movie theaters are all closed for the time being.
The good news, though, is that the sky isn’t falling for Uber. According to Khosrowshahi, Uber has more than enough cash to help the company withstand and get through the current coronavirus crisis. Even in a worst-case scenario that would see ride volume drop by as much as 80%, Uber maintains that it will be able to persevere.
In remarks picked up by TechCrunch, Khosrowshahi articulated that the company has upwards of $10 billion in cash on hand. What’s more, even if ride volume continues to drop and eats into Uber’s somewhat massive cash pile, the company also has a $2 billion line of credit.
“The most important thing to know is that we’re well positioned to weather this crisis and emerge even stronger,” he said on the call. “We have ample liquidity. We have a highly variable cost structure, a global footprint, multiple business lines that give us some diversity and case studies for how quickly our businesses likely to rebound after a shock like this. All of this gives us confidence…. As soon as businesses start moving, Uber will, too.”
Interestingly, Khosrowshahi added that Uber is also looking for ways to leverage its fleet of drivers to help combat the virus and help people who are self-quarantining.
“We already have contact in the health sector, we’ve got all of the processes that we need,” Khosrowshahi explained.
In the wake of the investor call, shares of Uber shot up immediately. At the time of this writing, Uber’s share price is up more than 37% for the day. That’s an astounding figure given that nearly every other company on the planet continues to see huge losses in the market.
Incidentally, seasoned Uber riders may have noticed that the company suspended its popular Uber Pool service to help prevent scenarios where the coronavirus can continue to spread.