Car service app Uber is losing more than 1 billion dollars a year in China where it faces a "fierce competitor," according to the company's CEO.After launching in the country in 2014, the San Francisco-based company's market share in China continues to be dwarfed by domestic car-hailing app Didi Kuaidi.
Chief executive Travis Kalanick made the admission at a private event this week in Vancouver, Canada, where he shared advice based on the company's experiences.“We’re profitable in the USA, but we’re losing over $1 billion a year in China.
We have a fierce competitor that’s unprofitable in every city they exist in, but they’re buying up market share," Canadian tech new site Betakit quoted Kalanick as saying.Kalanick warned against what he called “irrational funding going on” but said that in China, "if I don’t participate in the fundraising bonanza, I’ll get squeezed out by others buying market share."
According to the report, the company recently raised about 200 million US dollars to help the firm compete in emerging markets. The company had announced last year that it would expand into 100 Chinese cities over the next 12 months. Kalanick also said in a leaked email to investors last year that China was the "no. 1 priority" for Uber's global team. Uber currently operates in more than 40 cities in China including Beijing and Shanghai, where it has established partnerships with Chinese companies including internet search-engine leader Baidu.
Didi Kuaidi, already backed by Chinese tech giants Tencent and Alibaba, expanded their alliance with the US ride-sharing company Lyft in December to include India's GrabTaxi and South-East Asia's Ola, which has put further pressure on Uber. Uber's offices in the southern city of Guangzhou were searched in May because Chinese authorities suspected violations of transport rules. The dispatcher-broker is at odds with local authorities and taxi industries elsewhere in the world. The company was founded in 2009 and currently operates in 380 cities around the world, according to its website.