Uber loses $1.27 billion in first half of 2016

Driver subsidies cited as reason for increasing loss

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Reuters

Ride-hailing giant Uber Technologies lost at least $1.27 billion before interest, taxes, depreciation and amortization in the first six months of 2016, Bloomberg reported on Thursday, citing people familiar with the matter.

The subsidies Uber grants its drivers was the main reason for the loss, finance head Gautam Gupta told investors in a quarterly conference call, Bloomberg said, citing sources.

Uber, whose investors include Goldman Sachs Group and Amazon.com Chief Executive Jeff Bezos, could not immediately be reached for comment.

The company lost about $520 million in the first quarter of the year and another $750 million in the second quarter, Bloomberg said.

San Francisco, Calif.-based Uber, which is valued at roughly $69 billion, lost at least $2 billion in 2015, the report said.

The company’s net revenue increased to about $1.1 billion in the second quarter from $960 million in the first quarter, while bookings rose to more than $5 billion from more than $3.8 billion in the prior quarter, Bloomberg said.

Uber also told investors during the call that it was changing how it calculates UberPool’s contribution to revenue in the second quarter, which had the effect of increasing revenue.

Uber’s losses and revenue have generally grown in lockstep as the company’s global ambitions have expanded. Uber has lost money quarter after quarter.

In 2015, Uber lost at least $2 billion before interest, taxes, depreciation and amortization. Uber, which is seven years old, has lost at least $4 billion in the history of the company.

Uber has been engaged in a fierce price war with Lyft Inc. this year, and that also has contributed to the enormous losses. Uber told investors on Friday’s call that it’s willing to spend to maintain its U.S. market share.

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