Uber may well be one of the most valuable private companies ever – but the scale of its losses seems to be off the chart, too.
Back in June, the taxi app company raised $3.5 billion from the Saudi Arabia’s sovereign wealth fund, putting its overall valuation at $62.5 billion.
Yet according to Bloomberg, the company has just revealed a $1.2 billion loss to its shareholders.
Why such a large loss?
For one thing, it is subsidising drivers – many of whom operated in China.
Indeed, China was a problem for the company – it was losing money fast, until it recently packed its bags and sold its Chinese operation to its main rival over there.
But Uber is also making losses in the US – big losses, reportedly a $100 million loss in the US in its Q2.
Truth is Uber is locked in a turf war. It is battling it out with Lyft in the US.
But there are many players in this field. Uber is working with Volvo, General Motors has invested in Lyft, Volkswagen is reportedly working with Gett, Tesla has its own plans, Ford is looking at running an Uber type service for autonomous cars – but note that: Uber-type, not Uber. But the first company to trial autonomous car sharing is nuTonomy, which has announced a trial in Singapore.
They call it the uber economy – a kind of freelance free-for-all when people sell their time or assets over apps. The question is, will Uber the company continue to be a player in the uber economy?