Uber lost $1.3 billion during first half of 2016

Uber self driving car images

Silicon Valley’s a highly valuable startup is struggling to make a profit. Uber lost $1.3 billion in the very first half of the year, as per a Bloomberg report citing unnamed sources privy to a conference call with investors of the privately held ride-hailing service.

Uber has raised $16 billion for its quick expansion to 76 countries, and was last valued at almost $70 billion.

Gautam Gupta, Uber’s head of finance, informed on last Friday’s quarterly call that the company lost $520 million in the first quarter of this year, and $750 million in the second quarter. In the U.S., where it made profit in the first quarter, it lost cash in the 2nd.

Subsidies to Uber motorists to keep customer prices low were mainly to blame for the red ink.

Uber’s recently halted fight with China competing Didi Chuxing was accountable for the bulk of Uber’s second-quarter losses, according to a person knowledgeable about the details who asked not to be called because of the personal nature of the business’s financials.

The company earlier this month concurred to sell its China operations to Didi, citing the trouble of making a profit there.

Not to forget that their competition with Lyft likewise contributed to losses, stated the source. Although Uber overshadows $5.5-billion Lyft, Lyft’s in-roads in significant markets through a variety of rider promos have actually pushed Uber to keep fares low.

Uber CEO Travis Kalanick plainly believes that it costs money to make money. Recently, Kalanick revealed a $300 million partnership with Volvo to develop a growing fleet of self-driving automobiles that would begin test rides in the Pittsburgh market later on this month. That news was combined with an acquisition of Otto, a startup concentrated on automated trucks, valued at about $670 million.

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