As the coronavirus outbreak deepened across the country, consumers avoided using ride sharing apps Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT). Spending on both services plummeted in the past week all across the country.
Analyzing anonymized credit and debit card transactions, market research-firm Edison Trends found consumers spending on Uber rides tumbled 21% in the seven-day period ending March 16 compared to the week before, while spending on Lyft dropped 19%.
In comparison, spending on Uber over a two-month period before the crisis took hold rose 3% and was up 4% at Lyft.
Nowhere to go
Cities and states across the country are imposing restrictions on business and industries, limiting either the number of people that may be permitted at an event or closing venues down altogether. Restaurants, bars, and cafes are being ordered closed with exceptions for takeout service or delivery only.
Casinos in numerous states have also closed, as have gyms, movie theaters, and other places where the public typically gather.
Uber saw a particularly harsh drop in California, where spending on rides plunged 27%. The state accounts for 9% of the ride-sharing app's revenue and is a top market for Lyft as well.
Recently, Uber Eats began waiving delivery fees for independent and small business-owned restaurants, saying it wanted "to help restaurants focus on food, not finances." DoorDash similarly eliminated delivery fees while Grubhub said it would only defer collecting them.
Both Uber and Lyft had been expecting to reach profitability soon, but the spread of the COVID-19 virus has likely delayed that outcome.