FILE PHOTO: Uber’s logo is pictured at its office in Bogota, Colombia, December 12, 2019. Picture taken December 12, 2019. REUTERS/Luisa Gonzalez
(Reuters) – Shares of Uber Technologies Inc rose as much as 35% after CNBC reported that the company has plenty of cash on hand to get through the coronavirus crisis and is seeing growth in areas of businesses other than ride-hailing.
The company’s rides segment is seeing a 60% to 70% decline in areas hit hardest by the pandemic, but has also seen growth in its food delivery business Uber Eats, CNBC reported on Thursday, citing a conference call by Chief Executive Officer Dara Khosrowshahi. (cnb.cx/2U20HMm)
On Thursday, Khosrowshahi said Uber has $10 billion in unrestricted cash as of the end of February. “In any crisis, liquidity is key.”
Shares of its U.S.-based rival Lyft Inc also rose 19%.
Uber and Lyft were hit hard by a drop in riders as the virus spread across the world. Both the companies have started suspending shared rides on their platforms in the United States and Canada.
Their shares also took a nosedive. Uber shares fell about 50% this year, while those of Lyft were down 65%.
“We believe we’re already seeing worst of the impact and the recovery in some places,” Khosrowshahi said. “Once things start moving, Uber will too.”
Uber did not immediately respond to a Reuters request for comment.
Reporting by Supantha Mukherjee in Bengaluru; Editing by Shounak Dasgupta