Shares of Uber (NYSE: UBER) were up during trading on Thursday after CEO Dana Khosrowshahi stated that the company had plenty of cash on hand to weather the Coronavirus pandemic.
Shares of Uber were up 44% during trading on Khosrowshahi's announcement. "We are very fortunate to have a strong cash position with about $10 billion of unrestricted cash as of end of February," Khosrowshahi said. Khosrowshahi was confident that Uber would weather even the most extreme scenario with plenty of cash left; even in a situation where ridership declines 80%, Khosrowshahi would still have at least $4 billion in cash left.
Shares of Lyft (NASDAQ: LYFT) were also up at least 31%, even though there has been little to no news out of the company regarding its efforts to weather the pandemic.
While ridership is down for Uber's primary ride-sharing service, traffic through Uber Eats is up. Efforts to limit the spread of the Coronavirus have resulted in many state and local governments ordering restaurants to shut down dining rooms in favor of takeout and delivery, which has spurred the usage of third-party delivery services such as Uber Eats.
Uber has not yet updated its guidance, citing the rapidly changing situation as the pandemic develops. Before the pandemic swept through the US, Uber seemed poised to beat its promise of profitability by 2021.
The decline in ridership, along with Uber and Lyft's suspension of carpooling options, has severely impacted drivers. Many drivers are finding themselves unable to cover the costs of operating, and while the option to switch to services such as Uber Eats exist, some drivers are reporting that such options will not meet their financial requirements. Lyft has offered similar alternatives through its "LyftUp Driver Task Force", allowing drivers alternative assignments during the pandemic.