Ride-booking service Uber has informed investors its half year results for the 2016 have come in at a net loss of $1.27 billion, with a majority of the loss suffered during the second quarter.
While Uber is not a publicly-listed company, people familiar with the matter informed Bloomberg that head of finance Gautam Gupta reported to shareholders that during the first quarter of this year, the company made a loss of $520 million before interest, taxes, depreciation, and amortisation, and by the second quarter, the losses were more significant, exceeding $750 million, including approximately $100 million shortfall in the United States.
Gupta blamed the company's losses on subsidies for Uber's drivers globally.
On a more positive note, Gupta said bookings grew both quarters, from $3.8 billion in the first quarter to $5 billion in the second quarter; and net revenue grew 18 percent between the two quarters to $1.1 billion by the end of the second quarter.
However, based on one of the company's more recent funding rounds, which saw Uber receive $2 billion in additional funds from a Chinese investor, it is not short of cash injection.
Backers of the funding round in January included HNA Group, China Taiping Insurance Holdings, Guangzhou Automobile Group, China Life Insurance, investment bank Citic Securities, and China Broadband Capital.
Additionally, Uber's global operations is expected to receive another $1 billion in investment, as part of a merge deal Uber China signed with rival ridesharing company Didi Chuxing, worth $35 million.
While Uber declined to comment on the matter, Uber China investors will have a 20 percent stake in the new company, according to an unnamed source.
"We're profitable in the USA, but we're losing over $1 billion a year in China," Uber CEO Travis Kalanick said at the time.
Earlier this week, the Victorian government announced that over the next two years it plans to overhaul its commercial passenger industry that would eventually see ride-booking services such as Uber made legal.
Victoria will join a growing list of Australian states to legalise Uber. Earlier this month, Queensland announced Uber will be able to operate legally from September 5, 2016 under new transport reforms that were announced by the state government.
Under the changes, which are expected to deliver an estimated net economic benefit of AU$474.1 million, ride-booking services will be made legal under the conditions that drivers hold a valid driver authorisation and have their personalised transport vehicles inspected every 12 months.
The decision by the Queensland government was in response to recommendations made by the independent Opportunities for Personalised Transport Review, something which Queensland Premier Annastacia Palaszczuk called for back in April, not long after the state imposed a ban on Uber.
The ACT was the first Australian state or territory to legalise ridesharing last October, with the same regulatory conditions that are enforced for taxi drivers such as driver history checks and vehicle safety checks.
Uber was then deemed to be legal in Western Australia under major taxi industry reform in December, with the proviso that drivers had to obtain special "omnibus" licences in addition to their standard driving licences. South Australia followed suit giving Uber the green light in April.
Uber was also officially legalised in NSW by the state government in December last year, with a new regular and commissioner put in place to oversee the industry. A transition period was also put in place for a number of months for ridesharing drivers to obtain the correct accreditation to drive legally on NSW roads.
The Northern Territory government is, however, still refusing to allow Uber to operate.
Outside of Australia, Macau -- one of China's two special administrative regions -- plans to end Uber services as soon as September 9 as local authorities show no real intention for a discussion on the identity issue of Uber under current regulatory framework.
According to Uber, local police forces have charged over 10 million patacas in fines from over 300 Uber drivers in the past 10 months.
Since Uber landed in Macau in late October, 2015, private car hailing services have been deemed illegal by the Public Security Police Force due to their lack of operating licenses.