Uber Technologies Inc is burning through more than a billion dollars a year in China as it wages a fierce price war against local rival Didi Kuaidi, its chief executive said.
The company’s Chinese business boosted its valuation last month to more than $8 billion after raising more than $1 billion in its latest funding round, but the U.S. ride-hailing app is not yet profitable in mainland China because of the intense competition.
“We’re profitable in the USA, but we’re losing over $1 billion a year in China,” Uber CEO Travis Kalanick told Canadian technology platform Betakit.
“We have a fierce competitor that’s unprofitable in every city they exist in, but they’re buying up market share. I wish the world wasn’t that way.”
The $1 billion figure was confirmed by Uber officials in China in an email to Reuters on Thursday.
Uber and China’s Didi Kuaidi, backed by Chinese technology giants Tencent Holdings and Alibaba Group Holding, have both spent heavily to subsidise fares to gain market share, betting on China’s Internet-linked transport market becoming the world’s biggest. Read more