Ride hailing service Uber, has reportedly lost a cool $1.27 billion in the first half of 2016 alone. According to a report published by Eric Newcomer on Bloomberg, the company is said to have held a conference call with investors on Friday to discuss Uber’s financial situation.
The meeting was led by Uber’s head of finance, Gautam Gupta.
In the first quarter of 2016, Uber lost $520 million before interest, taxes, depreciation and amortization. In the second quarter, the losses topped $750 million including what Bloomberg reports to be a roughly $100 million shortfall in the U.S., those people said.
So what could have caused these massive losses? Uber attributes them to various sources including driver subsidies.
These losses might have a huge impact on Uber considering it has lost money quarter after quarter. In 2015, Uber lost at least $2 billion before interest, taxes, depreciation and amortization. The company has lost at least $4 billion since it started its operations 7 years ago.
But a person familiar with the matter told Business Insider that the major share of Uber’s losses came from the company’s expensive and protracted battle with Didi Chuxing in China, where the company was losing $1 billion a year trying to beat its local rival. In the U.S, Uber has also been engaged in a fierce price war with Lyft Inc. this year, and this might have also contributed to the enormous losses.
Locally, the launch of Safaricom’s Little Cab is one of the competition Uber is facing. According to Safaricom, the aim was to provide cheaper fares than those of competitors like Uber and offer drivers a higher share of revenues, officials of both firms said in a statement.
It will be interesting to see how the company will come back to the market considering the stiff competition it is currently facing from other cab hailing services.