Uber lost $1.27 billion in the first half of 2016, with much of that coming from incentivizing drivers, unidentified sources told Bloomberg.
On Friday of last week, Uber’s head of finance, Guatam Gupta, gave a financial report during a conference call. While not a public company, ride-hailing and ridesharing giant Uber has been holding financial reporting calls for shareholders, Bloomberg said.
Losses increased from $520 million in the first quarter to over $725 million in the second quarter, including about $100 million of that in the U.S. during the second quarter. Uber’s financial results are being reported to shareholders before interest, taxes, depreciation and amortization, sources said.
An Uber spokesman declined to comment to Bloomberg.
Subsidies for Uber’s drivers are responsible for the majority of the company’s losses globally, Gupta said during the earnings call. Some of that loss has come through intense competition with Chinese ride-hailing market leader Didi Chuxing. Uber has lost about $2 billion in two years in China, and has invested at least $1 billion in subsidy incentives for drivers in that market, according to the Bloomberg report.
A recent deal with Didi is expected to help stabilize Uber’s financial condition. Didi has granted Uber a 17.5 percent stake in its business and a $1 billion investment in exchange for Uber leaving the Chinese market.
Another strain on Uber has come through an aggressive price war with Lyft Inc. Uber told investors that its willing to take measures to maintain its market share in the U.S. Uber claimed to have somewhere between 84 and 87 percent of the U.S. market share during the conference call.
Lyft disputed that market share claim, stating that it has more than 20 percent of the U.S. share and has grown substantially since last year.
“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.
Financial analysts are giving Uber high valuation even though the risk is high – a whopping $69 billion in market value this year, according to Bloomberg. Uber CEO Travis Kalanick has said that Uber might go public on the stock market, but that won’t be happening for a very long time. Investors will be interested in seeing if Uber can become profitable.