Uber is one of the most successful call-a-cab services in the world. In fact, the entry of Uber in Mumbai has hit the other cab service brands badly in the city. Looking at this, one can safely assume that Uber is doing really well. But that is not the case. At a recent conference held by Uber with its investors, the company spokeperson revealed that the company has lost a lot of money so far this year. According to a report from Bloomberg, Uber has lost $1.27 billion in just the first half of 2016. To explain this, head of finance Gautam Gupta reportedly said that most of those losses come from compensation for its drivers worldwide.
This is not the first incident that has happened with the company. Since the company is formed, it has been incurring heavy losses. In 2015, Uber lost more than $2 billion total and has lost more than $4 billion in the seven years since it was formed. Yes, it is understandable that new startups do suffer losses initially until they get their feet and figure out a way to start earning profits.They are answerable to the investors too. But the amount of money that Uber has been losing combined with the fact that the losses grow on increasing is problematic.
In fact, Uber claimed to have gained profits in USA but is losing money while trying to make its mark in China, where it has lost about $2 billion over the last two years. also, according to Bloomberg, Uber is trying its best to compete with Lyft in the USA which has resulted in a major price war thus increasing its losses. The company made it quite clear that it is ready to spend money in order to maintain its lead in the US, but the question of how long can Uber afford to incur so much loss? Will there come a time when the losses will stop or decrease permanently?