Uber shares surge after citing signs of rebound from virus slump

The San Francisco-based company was permitted to continue operating in London during the appeal process.

The San Francisco-based company was permitted to continue operating in London during the appeal process.

AFP/Robyn Beck

NEW YORK - Uber shares surged after the ridesharing giant suggested it is seeing the "beginnings of a recovery" in parts of the world following a brutal coronavirus-induced slump.

In midday trade, Uber shares were up nearly 40 percent as it joined a broad rebound in the battered stock market.

Uber chief executive Dara Khosrowshahi told analysts on a conference call he is seeing some signs of improvement in places such as Hong Kong, one of the earliest markets to be hit by coronavirus concerns.

READ: Uber suspends 240 users accounts over possible virus contact

"In some parts of our business, we're already seeing what we believe is a worse impact behind us and the beginnings of a recovery," he said, pointing to Hong Kong in particular where ride traffic dropped some 45 percent.

"Hong Kong was one of our earliest cities that was affected and it's the earliest one that is recovering. And if the world looks like Hong Kong, we will be in great shape."

Khosrowshahi said other cities like Seattle have seen drops as much as 70 percent but that he expects a broad rebound.

READ: Uber shares skid as losses widen

Even in hard-hit cities such as Seattle, he said, "we're assuming two months of absolute lockdown and shutdown based on what we're seeing... we're assuming that things get better because certainly Hong Kong is showing that things get better."

The CEO said Uber is well-positioned to ride out the crisis with $10-billion in "unrestricted" cash and no debt repayments due in the near future.

Even in a worst-case scenario where business declined some 80 percent for the rest of the year, he said Uber would still have about $4-billion in reserve.

"We absolutely don't expect that kind of case to happen," he said. "But we feel responsible to model it even in that case our balance sheet remains strong."

Source
AFP