Ridesharing app Uber may be enjoying brisk business as it expands around the globe, but the company isn’t making money as a result. That’s according to a report by Bloomberg, which cited people familiar with the matter who heard comments from Uber’s head of finance, Gautam Gupta.
According to the report, Gupta informed investors that Uber‘s losses are increasing in the second quarter, even in the U.S., where the company reported a profit during its first quarter. In the first quarter, Uber lodged losses of around $520 million, and in the second quarter, those losses have surpassed $750 million, including $100 million in losses in the U.S. All told, Uber’s losses amount to $1.27 billion in the first half of this year, the report noted. The losses are being driven largely by subsidies to Uber drivers, Gupta told investors.
“You won’t find too many technology companies that could lose this much money, this quickly,” said Aswath Damodaran, a business professor at New York University, in the report. “For a private business to raise as much capital as Uber has been able to is unprecedented.”
The report noted that bookings grew significantly from the first quarter to the second, coming in at $5 billion, up from $3.8 billion. Net revenue grew around 18 percent, to $1.1 billion in the second quarter from $960 million in the first quarter. While the startup is lodging losses now, they may end soon. In July, it inked a deal with Didi Chuxing, the Chinese taxi-hailing app. As part of the deal, Uber gets a 17.5 percent stake in its business and a $1 billion investment in exchange for Uber exiting the China market. Uber lost $2 billion or more in the two years it was in China, the report noted.