Uber is burning through $1 billion a year as it battles with Didi Kuaidi, its Chinese rival, to control the world’s largest ride-hailing market.
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Uber has big ambitions for China.
The private vehicle hire app’s CEO Travis Kalanick said it was not yet profitable in mainland China because of intense competition as its rival buys up market share.
“We’re profitable in the United States of America but we’re losing over $1 billion a year in China”, Uber CEO Travis Kalanick complained in a talk at a Vancouver, Canada startup hub, the Canadian tech-news site BetaKit reports.
Uber has raised more than $10 billion to date, and its investors include Goldman Sachs, TPG, Fidelity and – most recently – Russian billionaire Mikhail Fridman.
Uber and Didi Kuaidi, backed by Chinese technology giants Tencent Holdings and Alibaba Group have both spent heavily to subsidize rides to gain market share, betting on China’s Internet-linked transport market becoming the world’s biggest.
CBN understands that Mr. Kalanick expressed his intentions of spending efficiently to win the ongoing turf war in the Chinese ride-hailing market with Didi Kuaidi. It announced previous year that it would expand into 100 Chinese cities over the next 12 months.
“Smaller competitors have to bleed subsidies to make up for their insufficient driver and rider network”, the spokesman said in emailed comments to Reuters.
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CBN believes that although Uber is now spending money to face stiff competition against Didi Kuaidi, yet the company’s market potential is so huge that it will get back on track once the breakeven point is achieved. “But if I don’t participate in the fundraising bonanza, I’ll get squeezed out by others buying market share”, said Kalanick.
