Uber is currently setting new records for financial losses by reporting a $1.2 billion (about RM4.8 billion) deficit for the first half of 2016. While the amount is impressive, it is an unsurprising outcome for the ride-sharing company.
Uber does not necessarily need to declare its finances; as the company is not publicly traded. However, Uber head of finance, Gautam Gupta makes it a point to keep investors updated with the position of the company every quarter through a conference call.
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The first quarter of 2016 saw Uber report a $520 million loss; before taxes, interest, and depreciation of assets were counted. In other words, there actual amount is far larger than what is being quoted.
A large portion of the losses came from Uber’s failed attempt to break into the Chinese market. The ride-sharing service reportedly spent some $2 billion in marketing and driver incentives to overthrow rivals Didi Chuxing. Uber China was eventually merged with Didi, although Uber was given a 17.5-percent share in the new company and $1 billion in compensation.
Despite this loss, Uber is still valued at $69 billion, having raised some $16 billion in cash and debt. Investors do not seem concerned with the company’s ability to bleed money; considering that it has not yet turned a profit in five years.
[Source: Bloomberg]
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