By Tina Bellon
(Reuters) – Uber Technologies Inc’s ride-hailing business will take a small hit due to the outbreak of the coronavirus, the company’s chief executive said on Wednesday, while its food delivery business will likely benefit from the epidemic.
“Certainly our rides business to the extent that people stop leaving their house will take a hit, while our business Eats will probably actually benefit,” Dara Khosrowshahi said at the Morgan Stanley 2020 Technology, Media & Telecom Conference in San Francisco.
He reiterated the company’s profitability target on an adjusted basis by the end of 2020.
Khosrowshahi said that given the diversity of Uber’s business and lack of dependence on supply chains, the company is well-positioned to handle the spread of the virus and should bounce back quickly.
“Our airport business has slowed down a little bit … but nothing that’s alarming and nothing that we can’t adjust to,” Khosrowshahi said. He did not quantify or elaborate on the slowdown.
Airport trips account for roughly 15% of Uber’s gross bookings, the CEO said, with those trips providing higher margins than other rides.
The U.S. Federal Reserve cut interest rates on Tuesday in an emergency move to try to prevent a global recession and the World Bank announced $12 billion to help countries fight the coronavirus, which has taken a heavy toll on air travel, tourism and other industries, threatening global economic growth prospects.
The virus emerged in China late last year and has continued to spread in South Korea, Japan, Europe, Iran and the United States, and several countries recently reported their first confirmed cases, taking the total to some 80 nations hit with the flu-like illness that can lead to pneumonia.
(Reporting by Tina Bellon in New York; Editing by Chris Reese and Matthew Lewis)