Uber ‘making big losses’- report

Uber ‘making big losses’- report

Uber could be running losses of several million dollars each quarter as the taxi app invests heavily in growth, according to a news report.

Blog Gawker published a story on Wednesday claiming that claimed to “prove Uber is a money loser.” Quoting leaked financial documents from the company.

They show operating losses of more than $100m (£65m) in the second quarter of 2014, albeit coupled with steady growth in revenue.

According to the story, the ride-sharing service has lost “tens of millions of dollars since 2012,” citing purported internal financial documents obtained by Gawker.

“While it is de rigueur among observers of Silicon Valley’s Game of Thrones to dismiss questions of profitability as short-sighted hand-wringing, the detailed documents obtained by Gawker demonstrate conclusively for the first time that Uber has been financing its astronomic growth by taking staggering losses,” the story read.

In a statement, the company hit back at reports but did not deny them.”Shock, horror, Uber makes a loss,” it said.

“This is hardly news, and old news at that,” it added. “It’s a case of business 101: you raise money, you invest money, you grow (hopefully), you make a profit and that generates a return for investors.”

The company was recently valued at $50bn and is the most-funded start-up in the world.
There has long been speculation over the health of Uber’s profit to loss ratio, a subject on which the company has never officially detailed the sums.

The company has increased its cash holdings from $263m in 2013 to over $1bn the following year.

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