Uber CEO Travis Kalanick said in a recent interview with Canadian tech news website BetaKit that Uber China is losing USD one billion a year in China. At the same time, he accused Uber’s main Chinese rival, Didi Kuaidi, of burning even more cash than them.
“We’re profitable in the USA, but we’re losing over USD one 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. I wish the world wasn’t that way. I prefer building rather than fundraising. But if I don’t participate in the fundraising bonanza, I’ll get squeezed out by others buying market share,” Kalanick said on Tuesday.
On Friday, Didi Kuaidi told AllChinaTech that the claims about Didi Kuaidi are “outright untrue” and that the company passed the breakeven point in over 200 of the 400 cities it covers at the end of the first week of February.
“It’s a mystery to us why, in his statements quoted in the press, Mr. Kalanick creates fictional numbers for Didi while admitting that what seems to be Uber’s China strategy is both unsustainable and gravely challenged. The claims on Didi are outright untrue,” a Didi Kuaidi spokesperson said.
“Didi is able to do so [pass the breakeven point] because we maintain a driver/passenger network 10 times of the size of our closest competitor at 1/5 to 1/4 of the cost.”
The two companies have been in a cutthroat competition over subsidizing their services. Kalanick in January said that Didi Kuaidi spent about USD four billion a year on subsidizing its drivers. While Didi Kuaidi responded that Uber spent more than USD 1.5 billion last year on subsidizing Chinese users.
Uber China plans to cover around 100 cities in China by the end of 2016. The company completed a USD two billion Series B financing in January, boosting its valuation to USD eight billion.
Didi Kuaidi had 83.2% of the market share in China’s car-hailing app market in Q3 2015, a report by Chinese research firm Analysys International said. The company closed USD three billion in financing last September and is now valued at USD 16.5 billion.
(Top photo from Baidu Images.)