Ride-hailing company Uber Technologies Inc (NYSE: UBER) experienced a strong January and February, followed by a "difficult" March and then a "shock to the system" in April as Rides experienced an 80% year-over-year decline, CEO Dara Khosrowshahi said on CNBC's "Squawk Box."
Uber's Q1 Update
Uber's top priority in the face of the coronavirus was to maintain the health and safety of the drivers on the platform and riders, the CEO said.
Now that this stage is complete, management can shift its focus to making "significant" adjustments to the business, he said.
Uber is seeing early signs of a recovery in the Rides business: bookings rose 12% last week, Khosrowshahi said.
Nevertheless, the business is still far removed from the usual activity, which resulted in first-quarter earnings falling short of the Street's estimates on Thursday, the CEO said, adding that the company is still working on how best to react to the health crisis.
Uber Eats Update
On the other hand, the Eats business grew nearly 90% in April as more restaurants signed up for the service and more consumers embraced food delivery, Khosrowshahi said.
Encouragingly, the company's large influx of new customers trying the service is expected to translate to repeat sales in the future,
"Eats is becoming more and more of an important lifeline for many restaurants out there," the CEO said.
The unit lost around $350 million in EBITDA in the quarter, and the same should be expected in the second quarter before there's improvement, he said.
Uber is still focused on creating "the most efficient delivery mechanism," and the "best way" to spur growth is through lower delivery fees, which also lets restaurants more easily rebuild their business in the difficult environment, he said.
Uber's prior goal of achieving a profit in the fourth quarter will now be delayed until next year, its CEO said.
But an extended timeline by itself isn't enough, as management needs a shift in costs, including laying off a lot of "really great people," he said.
"Everything is on the table now," he said. "This is a deep crisis and while we are very well suited to weather the crisis, we still need to make adjustments and that absolutely does include costs."
Nevertheless, Uber's strong balance sheet and diversified business give it an advantage in a difficult time, Khosrowshahi said.
Uber shares were trading 5.78% higher at $32.65 at the time of publication Friday.
Photo courtesy of Uber.