SHANGHAI — The chief executive of Uber Technologies Inc. said the company was burning through more than a billion dollars a year in China, where it is locked in a fierce battle with its larger local rival Didi Kuaidi to lure consumers with cut-price deals.
Uber's China unit boosted its valuation last month to more than $8 billion after it raised over $1 billion in its latest funding round, though the US ride-hailing app is not yet profitable in the mainland because of intense competition.
"We're profitable in the USA, but we're losing over $1 billion a year in China," Uber's CEO, Travis Kalanick, told the Canadian technology platform BetaKit. Uber officials in China confirmed the comments in an email to Reuters on Thursday.
"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."
Uber and China's Didi Kuaidi, backed by the Chinese technology giants Tencent Holdings Ltd and Alibaba Group Holding Ltd, have each spent heavily to subsidize rides to gain market share, betting on China's internet-linked transport market becoming the world's biggest.
Uber China said in an emailed statement that Didi Kuaidi was having to spend "many multiples" more than the US firm to increase its share of the market, adding that Uber's China operation was backed up by profitable ones outside the region.
A spokesman for Didi Kuaidi, which has the biggest market share of China's car-hailing app market, did not provide an immediate comment when contacted by email.
In January, Kalanick said spending on subsidies was "how you win" in China, adding that Uber aimed to beat Didi Kuaidi by spending subsidies more efficiently. Uber operates in more than 40 Chinese cities and plans to be in 100 by the end of the year.
"I prefer building rather than fund-raising," Kalanick added in the interview with BetaKit. "But if I don't participate in the fund-raising bonanza, I'll get squeezed out by others buying market share."
(Reporting by Adam Jourdan and John Ruwitch; Editing by Miral Fahmy)