The Implications Of COVID-19 On Uber And Lyft

Ride-hailing services Uber Technologies Inc UBER and Lyft Inc LYFT entered 2020 gunning for profits, but the spread of coronavirus in the U.S. is going to threaten those plans as companies throughout the globe are facing unforeseen challenges.

As recently as a few weeks ago, both CEOs expressed confidence in their business. On March 4, Uber CEO Dara Khosrowshahi told analysts that he was confident the company would hit its revenue targets for the year, despite the spread of COVID-19. That same day, Lyft CFO Brian Roberts revealed the prior week had been the single biggest week in Lyft's history, both when it comes to revenue and rides. Both executives made it clear they were focused on growing top-line results and fortifying their bottom lines to reach profitability in the near future.

COVID-19 will only further emphasize the different business models of each company. While Lyft sells personal mobility services and that includes offering car, scooter and bike trips in the U.S. only, Uber has a food delivery business and a freight logistics division, Uber Eats and Uber Freight respectively. And it is this segment that could only amortize its coronavirus-related EBIDTA losses.

But an immense material hit to both businesses is certain, likely pushing back profitability timelines.

Both companies acknowledged in their annual reports that a "pandemic or an outbreak of disease or similar public health concern, such as the recent coronavirus outbreak" could materially affect their results. The coronavirus had also led to production delays with bikes, scooters, and automobiles that are crucial to their business. And unfortunately, we already know with certainty there are few industries that will be unharmed as the global economy falls into a recession.

Perhaps the most dangerous thing is that both companies were invented to support a lifestyle that won't be possible for quite some time as the world is forced to adapt to social distancing. Considering human psychology, who knows how consumer behavior will change after spending weeks, or even months, in isolation.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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