Uber burns $1b in China each year: CEO

In a recent interview, Uber CEO Travis Kalanick revealed the ride-hailing company is losing over $1 billion a year in China due to fierce competition with local firms.
Written by Cyrus Lee, Contributor

Uber's CEO Travis Kalanick told media this week that it is losing more than $1 billion a year in the country, adding that its competitors are in the same situation.

"We have a fierce competitor that's unprofitable in every city they exist in, but they're buying up market share," Kalanick said during an event in Vancouver on Monday, according to a Sina news report.

Kalanick referred to the Chinese ride-hailing company Didi Kuaidi Co, which features a number of backers including Chinese technology giants Alibaba and Tencent. The star Chinese internet-linked firm announced in September last year it was due to secure $3 billion in its latest fundraising, taking the firm's valuation to $16.5 billion.

A Bloomberg report in December said Uber was "looking to raise as much as $2.1 billion in a financing round that would value the car-booking company at $62.5 billion".

Kalanick said he prefers "building rather than fundraising", but if he doesn't participate in the fundraising, Uber will eventually get squeezed out by others who buy market shares in China.

In an interview with Chinese news website thepaper.cn last month, Kalanick slammed Didi Kuaidi for spending $4 billion a year on subsidies in China to gain the share, adding that Uber gained significant market share but spent far less.

Kalanick also claimed Uber's market share in China has reached 35 percent from just 1 percent in the first nine months of 2015. But the figure contradicts research conducted by Analysys International, which claimed Didi Kuaidi owns 83.2 percent of private car hailing market as of the end of September 2015.

Uber announced plans in December to expand its business in South China by opening its regional headquarters in Guangzhou, due to a surge in local user population last year.

Reports followed later that month of Uber exploiting interns and conducting operations illegally in the country.

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