Uber has revealed that despite running a massive, worldwide operation, it has lost around $1.2 billion dollars in the first half of 2016.
Uber is frequently cited as one of the most recognizable scaled startups; its driver-partner network spans numerous countries around the globe and the phrase ‘Uber’ alone has become a household name. However, it seems no-one wants to discuss the fact that the company is hemorrhaging money.
In a conference call with investors, the ride-hailing firm announced that it has lost over $1.2 billion dollars in the first half of 2016 alone. Read: Uber‘s RUSH API will let anyone deliver their products through its service
The company’s head of finance, Gautam Gupta, has reportedly stated that most of those losses stem from the compensation of its drivers worldwide.
The revelation isn’t without precedent. In 2015, the company lost more than $2 billion USD and has lost an estimated $4 billion in its entire history.
While it’s common for startups to haemorrhage money while establishing a profit, the scale at which Uber is acquiring – and losing – money is largely without precedent.
Uber claimed profitability in the United States this year, but suffered a major setback in trying to secure a foothold in China. The company recently announced that its Chinese assets would be absorbed by its rival Didi Chuxing, a Chinese-born ride-hailing service Apple recently invested in.
Bloomberg reports that Uber’s price war with Lyft in the United States is a large contributor to the former’s losses. It’s an odd advent that such a critically successful concept has yet to become a profitable, commercial success worldwide. Read: Didi Chuxing, the ride-hailing service Apple invested in, acquires Uber China
What are your thoughts on Uber’s revenue problems? How much longer could the company persist while posting such enormous losses? Be sure to let us know your opinion in the comments below!
Follow Bryan Smith on Twitter: @bryansmithSA