Published: Fri, August 26, 2016
Economy | By Melissa Porter

Uber reportedly lost $1.3 billion in this year's first half

Uber reportedly lost $1.3 billion in this year's first half

And it may soon be the centerpiece of a revival of downtown Oakland when its new offices and an anticipated 3,000 employees come to the East Bay in 2017. Raising money round after round then became necessary.

Uber and Lyft have always been battling it out for ride-hailing dominance in the US.

Ride-hailing app Uber Technologies reportedly is on pace to top $2 billion in losses this year despite a $1 billion deal with China's Didi Chuxing as it funnels money into a US price war with smaller rival Lyft.

According to a Bloomberg report, Gautam Gupta, Uber's head of finance, shared the information at an earnings call last week Friday. That's on top of $520 million in Q1 losses, making for $1.27 billion in losses for the first half of 2016.

"Even in the US, where Uber had turned a profit during its first quarter, the company was once again losing money", said the financial news wire.

Bloomberg reports that Uber has lost at least $4 billion in its four-year history, including $2 billion last year.

Gupta reportedly told Uber investors that the biggest source of the company's losses is subsidies its pays for its drivers. The company's losses then mounted in the following quarter.

According to Bloomberg's Eric Newcomer, Uber told investors in a call on Friday that it has between 84% and 87% of the United States market share.

Large tech companies have been known to take big losses as they grow. And Uber is less than six years old. Didi gave Uber a 17.5 percent stake in its business and a $1 billion investment in exchange for Uber's retreat. Uber won't see any losses from China on its balance sheet after August, the company said on Friday's investor call. Both Uber and Lyft are racing the pace of technology in order to get a foothold in a more sustainable financial model. This technology company is expanding and spending quickly. "Uber's alleged market share is a misleading and skewed statistic given that they offer service in more markets than Lyft", a spokeswoman for Lyft wrote in an e-mail.

Like this: