Uber is yet to see recovery of its mobility business in India, CEO Dara Khosrowshahi said, adding other markets in the region were seeing a revival. “Mobility recovery is clearly dependent on the public health situation in any given area,” Khosrowshahi said addressing investors on the firm’s Q2 2020 earnings call. Ride-hailing firms like Uber and Ola have seen a sharp dip in bookings as companies have allowed staff to work from home and the lockdown has restricted non-essential movement. Public transportation in India remained suspended during the first phase of the lockdown and was only permitted to operate with partial relaxations beginning May. Recent surveys indicate local consumers are opting for used cars for their daily commute. There is a rise in demand for cars in the `4 lakh-6 lakh price bracket, FE reported in June. A Deloitte analysis showed 70% consumers want to avoid ride-hailing options altogether.
To rein in costs amid a loss of business Uber gave up office space in Mumbai and laid off 600 permanent employees in India as part of the firm’s global downsizing exercise. Globally, Uber has slashed nearly 6,700 jobs but has resumed fresh hiring for select job profiles. Talking about mobility in general, Khosrowshahi said the workday commute is back and markets like Hong Kong, New Zealand and Sweden have seen bookings reach pre-Covid highs and even beyond at certain points. In countries like France, airport travel seems to be bouncing back, he said. “So while the hypothesis of stay-at-home is strong one, it’s especially strong in tech corridors. The reality that we are seeing is that as cities open up then people get back to work,” the CEO said.
Uber said revenues from the mobility segment declined to $790 million in Q2 2020 from $2.37 billion in the year-ago period. However, revenues from the delivery segment shot up to $1.21 billion during the April-June quarter from $595 million in Q2 2019. Net losses narrowed to $1.8 billion from $5.2 billion in Q2 2019. “The bottom line is that we have taken swift action on everything that’s within our control, cutting more than $1 billion in annual fixed cost versus our Q4 plan, rapidly deploying new mobility products to meet changing needs,” Khosrowshahi said. Uber said unit economics in a challenging market like India is improving “as we see through our investment in Zomato.” Earlier this year, Uber sold its India Eats business to Zomato.
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