Dara Khosrowshahi, chief executive officer of Uber Technologies Inc., listens during a panel discussion at the Bloomberg Global Business Forum in New York, U.S., on Wednesday, Sept. 26, 2018.Mark Kauzlarich | Bloomberg | Getty Images
Shares of Uber and Lyft skyrocketed Thursday after Uber said in an investor call that it has plenty of cash to get through the coronavirus crisis and is seeing growth in other areas of the business as rides fall dramatically as people stay home.
Uber stock was up as much as 40% Thursday following the call. The company's stock closed up 38.26% at $20.49 per share. Shares of competitor Lyft were also up as much as 31%, even though the company offered no new additional information about how it is handling the coronavirus crisis. Shares of Lyft closed up 28.97% at $20.70 per share.
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Uber CEO Dara Khosrowshahi said the rides segment is seeing a 60% to 70% decline in areas hit hardest by the coronavirus pandemic, but has also seen growth in its food delivery business Uber Eats.
"We believe we're already seeing the worst of the impact and the recovery in some places," Khosrowshahi said on a call with analysts. "Once things start moving, Uber will, too."
Shares of Uber saw all-time lows this week as investors likely viewed Uber more as a travel company than tech business.Uber stock on Wednesday closed at $14.82 per share, down more than 68% from its all-time high of $47.08.
Several health and government officials have asked the public to avoid nonessential travel and stay home in a bid to slow the spread of the coronavirus. Some officials have also closed restaurants and bars to the public, only allowing pick up or delivery. Because of that, Uber has seen an increase Uber Eats.
"Our Eats business is an important resource right now," Khosrowshahi said. "Even in Seattle, our Eats business is still growing."
Uber did not update its guidance on Thursday because the situation is so fluid, but Khosrowshahi said it could do so in the future. While reporting fiscal fourth-quarter earnings in February, Uber moved its target for earnings before interest, taxes, depreciation and amortization to Q4 2020, ahead of its original promise of profitability in 2021. It also said it is forecasting a $1.35 billion loss EBITDA at the middle of the range for 2020.
Khosrowshahi said the company has ample liquidity to get through the pandemic. As of the end of February, he said Uber has $10 billion in unrestricted cash.
"In any crisis, liquidity is key," he said.
Several companies have shut down or limited operations in an effort to slow the virus and have warned of the financial impact.
In an annual financial filing on March 2, Uber warned that "a pandemic or an outbreak of disease or similar public health concern, such as the recent coronavirus outbreak, or fear of such an event" could post a material risk to its business. The company has since suspended its carpool service and started to waive delivery fees for small businesses in some of its markets.
Correction: An earlier headline overstated Uber's statement about the effects of the coronavirus crisis on its operations. CEO Dara Khosrowshahi said he believes "the worst of the impact and the recovery" is happening "in some places."