Uber lost $2.9 billion in the first quarter

Uber reported a sharp drop in profits as its ridership declined because of the coronavirus.

The ride-sharing company said Thursday that it lost $2.9 billion in the first quarter. The earnings hit included a $2.1 billion pre-tax impairment write-down on some of its investments and a $277 million charge for stock-based compensation. Revenue was $3.5 billion, up 14% from the year-ago period. Rides were 3% than a year ago. 

“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,” CEO Dara Khosrowshahi said in a statement. 

Uber’s profits slid when the value of its investments in Chinese ride-hailing service Didi, Singapore-based Grab and others plummeted as demand collapsed in Asia. 

Uber Eats, the company’s food delivery segment, made $148 million during the quarter as more Americans sheltering at home ordered out. Total revenue for Uber Eats was $313 million, a $4 million decrease from this same period last year. 

Cutting thousands of jobs

Moving to slash costs, Uber said earlier this week that it is laying off 3,700 employees in its customer service and recruiting departments. The company also instituted a hiring freeze and slashed its marketing budget, while CEO Dara Khosrowshahi waived the rest of his 2020 salary.  

Uber, Lyft and other ride-share drivers have seen a decline in customers as many Americans remain indoors under government stay-at-home orders. One analyst believes it could take three years before riders are fully comfortable hiring a car. The company said Monday it will soon require passengers and drivers to wear face coverings in certain markets.  

The pandemic has pushed Uber even further away from profitability. Uber has racked up three straight years of multibillion-dollar operating losses, according to its annual report, including $8.6 billion for 2019. As of January 1, the company had lost more than $16 billion. 

Uber isn’t the only “gig economy” company feeling the effects of the virus. Airbnb this week said it plans to cut 1,900 workers, or about 25% of its workforce. Lyft laid off nearly 1,000 employees, or 17% of its workforce, in April. Lyft also furloughed roughly 300 employees and reduced the salaries for its vice presidents and executives by 20% and 30%, respectively. 

— The Associated Press contributed to this report.