Uber CEO Reveals Pickup In May Rides As Covid-19 Restrictions Ease

Uber (UBER) CEO Dara Khosrowshahi has revealed a gradual pick up in trip requests during May as lockdown restrictions ease, reports Reuters.

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The CEO disclosed that trip requests are now down about 70% from the previous year, which, while significant, does mark a slight improvement on April’s 80% drop.

He also revealed that Hong Kong has already recovered over 80% since its ‘coronavirus-driven lows’ while the company’s ride business is recovering week-over-week. Encouragingly, Khosrowshahi added that Uber Eats first quarter surge continued during the month of May.

Similarly, on June 2, Lyft (LYFT) disclosed that rides on its rideshare platform increased 26% in May versus April, although they were still down 70% year-over-year. Rideshare rides have increased week-over-week for 7 consecutive weeks since the week ended April 12, 2020, Lyft also revealed.

“While it still looks like it’s going to be a long and steady road back to ‘normal’, we continue to like both ride-hailing names and expect further widely visible datapoints (like this) to continue pushing these stocks higher” commented Needham analyst Brad Erickson on June 3.

“Our UBER PT remains $42 and our LYFT PT remains $41 and we remain buyers of both” the analyst added.

KeyBanc analyst Edward Yruma also gave an upbeat outlook for both stocks, writing: “While recovery will take time, we think that trends are likely to have bottomed sometime in April. Finally, both LYFT and UBER have moved to aggressively reduce costs, which we think will result in more profitable businesses long term. Within our internet/e-commerce coverage, we think rideshare presents the best near-term opportunity for outperformance”.

Overall, Uber scores a bullish Strong Buy Street consensus with 28 recent buy ratings, vs just 3 hold ratings and 1 sell rating. Meanwhile the average analyst price target of $40 translates into 8% upside potential from current levels. Shares are now trading up 24% year-to-date. (See Uber stock analysis on TipRanks).