Quarterly reports issued this week for Uber, Lyft and Live Nation were all, unsurprisingly, dismal. Airbnb, meanwhile, is laying off a quarter of its 7,500 staff members on projections that its revenue in 2020 would be half as much as the reported $4.8 billion it took in last year.
“In earnings reports this week, Uber and Lyft disclosed the depth of the financial damage. The companies said their ride-hailing businesses all but collapsed in March, the last month of the first quarter, as shelter-in-place orders spread through Europe and the United States,” Kate Conger and Erin Griffith write for The New York Times.
“Since the last global recession, the gig economy has transformed life around the world, shaking up transportation in cities, food delivery and even the way people think about housework. (Why hang a painting yourself when you can use TaskRabbit?),” writes Julia Horowitz for CNN Business.
“But the gig economy startups that captured public attention over the past decade aren’t faring well in their first downturn, as people spend less on non-essential items and travel -- either across town or around the world -- is extremely limited,” Horowitz adds.
“Even when people return to the office and start traveling, the pandemic could change how they behave for years to come. Thirty percent of gig-economy revenue could disappear over the next one to two years, with a portion of it unlikely to return,” Daniel Ives, managing director of equity research at Wedbush Securities, tells the NYT’s Conger and Griffith.
“Based on our analysis of the gig economy and the overall pie of consumers, unfortunately, there’s a slice that -- until there’s a vaccine -- will not get in a ride-sharing vehicle or use an Airbnb,” says Ives.
And if they aren’t going anywhere, they’re not staying anywhere either, as Airbnb’s announcement attests.
“To those leaving Airbnb, I am truly sorry. Please know this is not your fault,” founder and CEO Brian Chesky wrote to employees in an email announcing the layoffs.
“The announcement is a wild reversal of fortune for a company that was expected to be 2020’s leading candidate for an initial public offering. Over the last few weeks, the company secured $2 billion in debt to try to survive the coronavirus pandemic, which has drastically cut back on people’s ability and willingness to travel. Airbnb declined to comment on how this would affect its expected 2020 IPO,” Theodore Schleifer writes for VoxRecode.
Meanwhile, “short-term rental hosts are banding together and launching their own direct-booking websites in an effort to diversify their business after years of mounting frustration with Airbnb and other short-term rental providers,” CNBC’s Salvador Rodriguez writes.
“Some of these websites were already in the works. But many hosts have recently prioritized their own direct-booking websites after a turbulent past two months, as the coronavirus pandemic spurred widespread cancellations and many grew unhappy with Airbnb’s reimbursement policies,” Rodriquez continues.
Live shows have been battered, too, of course.
“With concerts on hold for the past two months due to the ongoing COVID-19 pandemic, Live Nation Entertainment on Thursday reported a 21% drop in revenue for its first quarter, with concert revenue alone dipping 25% and ticket revenue dropping 16% year over year. Shares of Live Nation -- which also owns ticketing company Ticketmaster -- have dropped about 48% since the middle of February,” reports Ethan Millman for Rolling Stone.
“On Thursday the company said 80% of affected shows have been rescheduled, rather than canceled, and that 90% of fans are holding onto tickets for rescheduled dates. On a call with Wall Street analysts, Live Nation executives said 65,000 shows had been impacted through last weekend,” Anne Steele writes for The Wall Street Journal.
“Executives said the company envisions new protocols at concerts including contactless entry, cashless payment at concessions and expanded digital ticketing. A company survey found 85% of fans indicated they want increased cleaning and sanitization at venues, plus access to hand-sanitizing stations,” Steele adds.
But they also want to get out to play.