Uber’s share price has plummeted almost 10%, as the ride-hail company scrambles for solutions amid the Coronavirus outbreak. Uber is one of a number of firms—including rival Lyft, whose price dropped 11.8%—whose values have dropped owing to the virus, which the World Health Organisation (WHO) yesterday declared a pandemic.
Claims by Uber that it will become profitable by year’s end have been hit by customer fears of contagion. The company has responded by saying it may suspend the accounts of drivers exposed to Coronavirus, with drivers in line for up to 14 days’ sick pay.
But with many drivers already struggling financially, their accuracy in self-reporting may skew. And as more nations enforce travel bans, and companies force staff to work from home, demand for ride-hailing services will surely be hit hard in the coming weeks, or months.
Uber has itself “encouraged” office workers in the US, Canada, Europe, South Korea and Japan to stay home during the pandemic, according to New York Times reporter Mike Isaac. The company, which went public last year, has almost 27,000 employees worldwide. The suggestion does not apply to Uber drivers, or UberEats couriers.
Uber and Lyft’s Coronavirus problems have pushed equity below their respective IPO prices, further denting ambitions to get out of the red and prove that their business models are sustainable. Tech’s premier stock exchange, the NASDAQ, has not been hit as hard as other exchanges, as the COVID-19 outbreak wipes billions off company values worldwide. But it has still suffered serious blows, as as of March 12 is down 5.53%.
The volatility is set to continue, with US President Donald Trump announcing a travel ban from all European countries bar the UK. Some cities are already on lockdown, and transport in major global cities could grind to a halt in the coming days.