Market Overview

Uber CEO Confident Company Will Survive Coronavirus Pandemic, Reveals It Has $10B In Liquidity

Share:
Uber CEO Confident Company Will Survive Coronavirus Pandemic, Reveals It Has $10B In Liquidity

Uber Technologies Inc.’s (NYSE: UBER) CEO Dara Khosrowshahi assured investors that the company would survive the coronavirus pandemic even as its customer base stays home.

Uber Is Sitting On Piles Of Cash

Khosrowshahi is taking steps to survive the worldwide spread of COVID-19. He briefed analysts on Thursday, saying, “Our balance sheet is incredibly strong.” The CEO remarked, “We have plenty of liquidity on the books, which we think positions us to come out of this crisis—and we will come out of this crisis—strong, capable, and important,” reported Fortune.

The company also has a $2 billion revolving line of credit. To save cash, Uber has frozen hiring and cut back on $150 million in incentives and marketing.

Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.

Stress Testing Business Models

Uber is “extensively” stress-testing the company’s business models across a few scenarios, and according to Khosrowshahi, signs point to the company surviving the slowdown. He revealed that Uber has $10 billion in liquidity, and if the rides business falls 80% for the year without any recovery, it would still leave Uber with $4 billion in cash. 

Ride-Sharing Picking Up In Affected Cities

Khosrowshahi expressed optimism on the future of Uber, citing the company’s experience in Hong Kong, where demand for rides picked up after two months of the COVID-19 outbreak. He cited similar progress in Seattle. 

Talking about the resurgence in demand for rides, he remarked, “When the demand is there, the supply is going to be there instantly, because our driver partners need to work. When work turns on, Uber turns on.”

Uber Eats Proves To Be An Alternative

Drivers who cannot work in the rides segment are turning to Uber Eats, the company’s food delivery service. Khosrowshahi cited the example of Seattle, where restaurant sign-ups rose 10x on Uber’s self-service web portal. 

The move of Uber riders to food delivery service, as a result of the company’s promotions, has led to “huge spikes” in that business over the last couple of days, revealed the Uber chief executive. 

Price Action

Uber shares traded 2.29% lower at $20.02 in the after-hours session and 38.26% higher at $20.49 in the regular session on Thursday.

Photo Credit: Public domain photo via Wikimedia.

 

Related Articles (UBER)

View Comments and Join the Discussion!

Posted-In: Coronavirus Dara Khosrowshahi UberNews Tech General Best of Benzinga