Uber Technologies, the multinational ride-hailing and delivery company, has withdrawn its financial forecast for 2020 and said it will be writing down about $2 billion worth of investments after the devastating impact of the coronavirus disease globally.
According to a monitored report from Bloomberg, Uber said that it expects to write down its minority stake of between $1.9 billion and $2.2 billion in some of its investments.
It should be noted that the ride-hailing company has investments in various ride-hailing and food delivery businesses around the world. In fact, its combined stake in China’s Didi Chuxing and Southeast Grab was about $10.3 billion at the end of last year.
Although Uber did not identify the investments that will be affected by this writedown, it however, tried to reduce the impact of the coronavirus disease on its revenue by creating a financial assistance program for its drivers and delivery agents.
Ride-hailing firms have been hard hit by the global lockdowns and restrictions, which were enforced as part of measures to contain the spread of the coronavirus disease. Rides in some of the hardest-hit cities have fallen by as much as 70%.
It could be recalled that about two weeks ago, Uber suspended its operation in Nigeria as a result of the lockdown and restrictions that were announced by both the Federal Government and some State Governments.
A writedown is the accounting term used to describe a reduction in the book value of an asset, due to economic or fundamental changes in the asset.