Uber sees ride rebound as states reopen

Uber investors have a renewed appetitive for the stock thanks to the Eats business.

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After a rocky, money-losing quarter, Uber CEO Dara Khosrowshahi sees a smoother road ahead.

“Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up. Our global footprint and highly variable cost structure remain an important advantage, as our expectation is that the Rides recovery will vary by city and country" he said in the company's quarterly earnings report.

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UBERUBER TECHNOLOGIES INC.34.46+1.11+3.33%

Shares of the ride-sharing company jumped in the extended session on Thursday as investors focused on future demand after the company posted a $2.9 billion net loss in the quarter or $1.70 per share hampered by the coronavirus global pandemic. Revenues rose 14 percent o $3.5 billion, according to the company's financials.

In terms of segment performance, rides bookings dipped 3 percent, while Eats surged 54 percent year-over-year.

"At a time when our rides business is down significantly due to shelter-in-place, our Eats business is surging," Khosrowshahi said on a conference call with investors. "The big opportunity we thought Eats was just got bigger."

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The pandemic has taken a toll on the ride-sharing companies.

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LYFTLYFT INC.27.53+0.76+2.84%

On Wednesday, Uber said it was cutting 3,700 full-time workers, or about 14% of its workforce, as people avoiding contagion either stay indoors or try to limit contact with others. Its main U.S. rival Lyft announced last month it would lay off 982 people, or 17% of its workforce because of plummeting demand. Careem, Uber's subsidiary in the Middle East, cut its workforce by 31%.

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In separate news, the ride-hailing giant said Thursday it is offloading Jump, its bike and scooter business, to Lime, a company in which it is investing $85 million. Jump had been losing about $60 million a quarter.

To help keep drivers and riders protected during the pandemic, Uber says it will require drivers and riders to wear a mask beginning sometime in the coming weeks. Lyft made a similar announcement Thursday.

The Associated Press contributed to this report.