Another source may be Uber’s expensive and protracted battle with Didi Chuxing in China, where the company was losing billion a year to beat its local rival.
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The losses have been caused by numerous problems, from an unsuccessful attempt to expand in China to the company’s ongoing price war with competitor Lyft. For the curious, Bloomberg’s report puts Uber’s loses in context with the losses of other major tech firms during the 2000s dot-com-boom. And it may be soon be the centerpiece of a revival of downtown Oakland when its new offices, and anticipated 3,000 employees, come to the East Bay in 2017.
Inc.is famous for losing money while increasing its market value, but its biggest loss ever totaled $1.4 billion in 2000.
Uber’s losses were well over $750 million in the second quarter, with $100 million of those coming from the United States, Bloomberg reported, citing unnamed sources. Uber, which is seven years old, has lost at least $4 billion in the history of the company.
Uber, whose $62.5 billion valuation makes it the world’s most valuable private company, has plenty of cash to burn. “The interesting challenge is for them to turn the corner to become profitable, cash-flow-positive entities”.
Both Uber and Lyft have ramped up spending and offered subsidies in recent months in an attempt to win over more riders and drivers.
According to Bloomberg’s Eric Newcomer, Uber told investors in a call on Friday that it has between 84% and 87% of the USA market share. Lyft, which only operates in the USA, posted an operating loss of $360 million in 2015.
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“I think what Uber is trying to do is, ‘Hey, look, we’re going to take the losses up front in order to get to disproportionate scale, ‘” said Robert Siegel, lecturer in management at Stanford’s business school.
