Uber, Lyft Revenues Drop By Staggering 50% Due To Coronavirus Outbreak

Lowering estimates for growing impact on Rides business:

We are lowering 1Q'20 Rides bookings by 10%, 2Q by 40%, and 3Q by 25%. Our changes imply a trough in 2Q (rolling 4-6 week quarantines in major cities) & gradual recovery thereafter, mirroring trends in Hong Kong. We decrease our 2020 Rides Bookings Estimate by 21%, from $56.5bn to $44.7bn. We roughly maintain our Eats bookings estimate, but decrease take rates due to the Free Delivery offering ('20 ANR down 5%). For 2020, we decrease Total ANR from $16.7bn to $13.6bn, and increase the EBITDA loss from $1.3bn to $2.3bn. For 2021, we lower bookings by 6% and continue to model positive EBITDA. Importantly, after including over $2bn in cash payments for Careem we estimate that Uber will exit 2020 with over $5.6bn in cash on balance sheet. We expect modest FCF loss in 2021 of $700mn, before Uber turns FCF positive in 2022.

As legendary hedge fund investor Jim Chanos said earlier during an interview with CNBC's "Halftime Report" Thursday, "are going to come out of this 'harmed', not 'enhanced'."

While he acknowledged that there's a "school of thought" believing it will be an unprecedented boon for the industry since people aren't going to go back to restaurants or take public transit, there are a lot of issues that the market hasn't really thought through, Chanos said. 

For example, while lawmakers were hammering out the $2 trillion stimulus bill, Uber CEO Dara Khosrowshahi had to appeal directly to lawmakers to find a workaround that would extend unemployment benefits to full-time Uber drivers and other gig economy workers. The problem is that since these workers aren't classified as regular employees, those payments will fall directly on taxpayers shoulders. This could bring on more policy scrutiny: Uber is already fighting a California law forcing it to treat drivers like regular employees. Pretty soon, that could become the law of the land.

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Andrew Armstrong 3 months ago Member's comment

It’s never about how much money they make NOW, especially when a company has a huge cash pile. It’s about increasing their customer base, and establishing their hegemony, which they’re doing by exploiting this situation.

Backyard Hiker 3 months ago Member's comment

That's from last month Anne. #Uber is operating with rideshares down 94% in the US last week. also uber eats loses money on every single delivery so any increase in that is irrelevant actually hurts them more

Anne Barry 3 months ago Member's comment

Bruce, I read that UBER Eats delivery is currently free in NYC. So not sure how that helps, though I'm not sure about the rest of the country.

Bruce Powers 3 months ago Member's comment

Considering that many companies are now at 0%, this is actually surprisingly good news for $UBER and $LYFT. Plus that 50% decrease does not include the additional 50% increase in Uber’s food delivery segment.