Uber expects up to $2.2 billion charge, drop in quarterly revenue due to COVID-19

Uber CEO

Uber Technologies has said that it expects an impairment charge of up to $2.2 billion in the first quarter due to the COVID-19 pandemic and its revenue to decline by $17 million to $22 million in the quarter. 

Last month, the ride-hailing company promised 10 million free rides and food deliveries to healthcare workers, senior citizens, and people in need, during the lockdowns put in place to stem the spread of the coronavirus.

The company withdrew its 2020 forecast for gross bookings, adjusted net revenue and adjusted its EBITDA. The company also said the initiatives taken in response to the outbreak, including financial assistance for drivers and delivery people, would be accounted into its first- and second-quarter revenue.

It expects GAAP revenue to fall by about $17 million to $22 million in the first quarter, and by about $60 million to $80 million in the second quarter.

Uber said the impairment charge would be against the carrying value of some of the company’s minority equity investments, due to the impact of the pandemic on the estimated value of those entities.

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The investments will be reduced by an estimated range of $1.9 billion to $2.2 billion during the first quarter ended on the 31st of March, the company said.

Shares of Uber were up about 6.6% in extended trading.

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