Startup giant Uber has reportedly lost $1.3 billion in the first half of 2016.
Silicon Valley’s most valuable, skyrocketing startup is struggling to turn a profit these days..
Uber lost $1.3 billion in the first half of the year, according to Bloomberg report citing unnamed sources privy to a conference call with investors of the privately held ride-hailing service.
The company has raised $16 billion to help fuel its rapid expansion to 76 countries, and was last valued at nearly $70 billion.
Subsidies to Uber drivers to keep customer prices low were largely to blame for the red ink.
Uber’s recently halted battle with China rival Didi Chuxing was responsible for the bulk of Uber’s second-quarter losses, according to a person familiar with the information who asked not to be named because of the private nature of the company’s financials.
The San Francisco-based company earlier this month agreed to sell its China operations to Didi, citing the difficulty of turning a profit there.
The ride-hailing service’s U.S. battle with Lyft also added to losses, said the source. Although Uber dwarfs $5.5-billion Lyft, Lyft’s in-roads in major markets through a range of rider promotions have pressured Uber to keep fares low.
Uber CEO Travis Kalanick clearly believes that it costs money to make money. Last week, Kalanick announced a $300 million partnership with Volvo to create a growing fleet of self-driving cars that would begin test rides in the Pittsburgh market later this month. That news was paired with an acquisition of Otto, a startup focused on automated trucks, valued at around $670 million.