Uber stock price down 3% after closing eight Eats locations

Shares of Uber (NYSE:UBER) are trading 3% lower today after the ride-hailing giant said it is shutting down its 8 Uber Eats locations across the globe.

Fundamental analysis: Eight markets to be closed on June 04

Uber said it will close Uber Eats operations in eight markets across the globe after failing to establish themselves as the number one or number two food delivery operators in these countries. 

The ride-hailing giant that its ride business will not be affected by these changes. In the United Arab Emirates, Uber Eats operations will be transferred to Careem - Uber’s subsididiary focused on the Middle East.

Uber Eats operations in these 8 markets will be closed by June 4 while around 50 full-time staff will be affected by these changes. These markets accounted for 1% of Eats gross bookings and 4% of Eats adjusted core earnings losses in Q1 2020.

Separately, Uber said that it will likely require all of its drivers to wear face masks amid the COVID-19 pandemic. In the meantime, the company is working on a tech solution to detect whether its drivers are wearing face coverings.

Technical analysis: Uber stock price fails at $32

Shares of Uber are trading 3% lower today after the announcement concerning Uber Eats. The price action rebounded strongly from the record lows in March, but the positive momentum quickly evaporated when the buyers faced strong resistance at $32. 

As a result, the failed move higher resulted in a bearish weekly candlestick pattern that is likely to invite more selling pressure in the coming weeks. Looking lower, the zone around $25.50 is likely to provide strong support for the buyers and an opportunity to buy Uber stock looking for a retest of the $32 resistance. 

Summary

Uber stock price is down 3% today after the company announced its Uber Eats is pulling out of eight markets worldwide as it couldn’t establish itself among the most popular food delivery operators.