Uber, Lyft first quarter earnings show impact of pandemic

Uber, Lyft first quarter earnings show impact of pandemic
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Ride sharing companies Uber and Lyft reported major first quarter losses this week driven by the fallout from the coronavirus pandemic.

Both companies revealed that their ride sharing business revenues fell drastically in March as countries and states worldwide began issuing stay-at-home orders.

Uber said Thursday that while first quarter revenue grew 14 percent compared to last year, losses jumped 190 percent. 

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“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.

The announcement of the losses comes a day after Uber laid off 3,700 employees in its customer support and recruiting teams.

Khosrowshahi has waived his base salary for the remainder of 2020.

Lyft's first-quarter earnings did not reflect the damage done to the ride sharing industry as fully.

The company's revenue rose 23 percent versus the same period in 2019, while losses were also narrower.

However, Lyft said in an earnings call Wednesday that rides dropped almost 80 percent in late March and are still down 70 percent in May.

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If usage remains at similar levels, Lyft predicts second quarter losses could far outpace the first quarter.

“These are the hard truths we’re facing,” CEO Logan Green said Wednesday.

Lyft also laid off roughly 17 percent of its corporate workforce late last month.

The ride sharing companies have also faced increased regulatory pressure.

California Attorney General Xavier BecerraXavier BecerraNewsom says he has already received a number of pitches for Harris's open Senate seat Uber CEO says app will temporarily shut down in California if new ruling upheld Here's who could fill Kamala Harris's Senate seat if she becomes VP MORE sued Uber and Lyft on Tuesday, claiming that their drivers should be classified as full-time employees rather than independent contractors under state law.

The lawsuit filed in San Francisco County Superior Court seeks to compel the ride-hailing giants to classify drivers as full employees, demanding civil penalties and restitution for drivers.

The back wages and penalties could add up to hundreds of millions of dollars for the companies that have already cut back their corporate workforces.