A leaked document reveals the huge growth and even bigger losses behind the infamous ride-hailing app.

‘Uber: to an extreme or excessive degree’. When CEO Travis Kalanick launched his company in 2009 he could not have known how apt his choice of name would prove. Uber really does only operate to the extremes, in this case extreme growth and extreme loss.


A leaked confidential report reveals that although the business is growing exponentially, it is still massively unprofitable. According to the document, GAAP losses (net revenue minus cost of revenue, operating expenses and other costs) totaled US$987.2 million in the first half of 2015. To put that into perspective, GAAP losses were US$671.4 million for all of 2014.

There are a number of reasons for Uber’s burning pockets: promotional discounts, high operating costs and an expensive marketing campaign. But being in the red doesn’t mean the company isn’t bringing in big business. Uber remains the market leader and saw gross bookings (total fares charged to app customers, before the drivers get their cut) of US$3.63 billion in the first half of 2015, up from just US$2.93 billion in all of 2014. But profitability is impossible when you have expenses of US$159.1 million in operations, US $295 million in aggressive advertising and US$72 in promotions in the first half of 2015 alone.

For most other businesses such eye-watering losses would mean a sentence to the scrapyard. But not for Uber. The company has an enviable set of airbags in the form of international investors, who act as a buffer against bankruptcy. What does Kalanick care if he’s burning fuel at the speed of light if he has a whole oil rig at his disposal?

Already valued at US$62.5 billion, Uber raised US$3.5 billion from Saudi Arabia’s sovereign wealth fund this June, the largest single investment ever made in a private company. The deal gives the company a stronger chokehold over the Middle Eastern taxi app market and strengthens its commitment to strategic regional expansion. Uber claim the Saudi’s investment puts the company’s total balance sheet, including cash and debt, at more than US$11 billion.

Bolstered by the recent injection of funds, the company is continuing to splash the cash. Last week Kalanick announced that is it investing US$500 million in a global mapping project that will make its operations less dependent on Google Maps. The new technology also holds the promise of bringing Uber driverless cars to the road in the years to come.

Despite the considerable losses lagging behind it, Uber is racing ahead in the fast lane. India and China are next on Kalanick’s hit list for 2016. The company has an insatiable appetite for spending, one that would run most other businesses off the road. But, as the name suggests, Uber thrives in extreme environments.




Rushika Bhatia Editor

Rushika Bhatia is one of the region’s leading commentators on business and current affairs issues. She is the Editor of SME Advisor magazine - the flagship title of CPI Business. She is passionate about infographics – with special emphasis on data, research and statistics. Rushika has a Bachelor’s Degree from Indiana University, USA and is also CIMA qualified.

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