Uber loses more than $1.3 billion in first half of 2016
SAN FRANCISCO — Uber may be gaining riders. It may be on the cutting edge of developing self-driving car technology. And it may soon be the centrepiece of a revival of downtown Oakland when its new offices and an anticipated 3,000 employees come to the East Bay in 2017. But it’s also a money-loser. That’s according to details given by Gautam Gupta, Uber’s finance head, who in a recent conference call with Uber investors, said the company lost at least $1.27 billion during the first half of this year.
In a report Thursday, Bloomberg cited “people familiar with the matter” as saying Gupta gave the money-losing score last Friday, as part of an update that the privately held company gives to its investors and shareholders every three months.
According to those sources, Uber lost around $520 million before interest, taxes, depreciation and amortization during the first quarter of the year, and the losses ballooned to more than another $750 million in the second quarter. The secondquarter losses were said to include $100 million from Uber’s operations in the United States.
The first-half losses suggest Uber is potentially on a pace to surpass the more than $2 billion the company is said to have lost in 2015.
Altogether, Uber has reportedly lost a minimum of $4 billion in its seven years of existence.
Gupta reportedly told Uber investors that the biggest source of the company’s losses is subsidies its pays for its drivers.
Uber didn’t immediately respond to a request for comment on the reported losses.
On the bright side for Uber were big quarter-over-quarter gains in bookings and revenue during the first half of the year. Uber said bookings went up from $3.8 billion in the first quarter to more than $5 billion between April, May and June.
Revenue also climbed from $960 million in the first quarter to $1.1 billion in the second quarter, a gain of about 18 per cent.
And it’s possible that Uber could see losses slow down through the rest of the year. The company recently pulled out of the ride-hailing market in China, in exchange for a 17.5 per cent stake in and a $1 billion investment from Chinese ridesharing leader Didi Chuxing. The lack of having to spend and lose money building up Uber’s presence in China is expected to have a positive impact on Uber’s balance sheet going forward.
Uber’s investors include investment banks such as Goldman Sachs and Fidelity Investments, and venture capital firms like Menlo Ventures and Benchmark Capital.
Uber has also taken in a $200 million investment from Luxembourgbased LetterOne, an investment firm headed up by Russian billionaire Mikhail Fridman, and in June received $3.5 billion from the Saudi Arabian Public Investment Fund.