Uber Technologies Inc will continue to lose money in its home market for at least the next six months as rival Lyft Inc poses a fierce competitive challenge, Chief Executive Dara Khosrowshahi said on Thursday in his first public comments since taking the top job at Uber two months ago.
“The US is very, very competitive right now between us and Lyft, so I don’t see the US as being a particularly profitable market for the next six months,” said Khosrowshahi, who made the comments at the New York Times DealBook conference in New York, which was also streamed online.
A spokesman confirmed that Uber will be unprofitable overall, although some cities may break even, reports Reuters.
Khosrowshahi was tapped to run Uber in August after leading travel-booking site Expedia Inc for 12 years and is expected to bring a less abrasive approach than his predecessor, Travis Kalanick. On Thursday, he described progress in talks with regulators in London, who in September refused to renew Uber’s operating licence.
Uber has often said its heavy losses were necessary to establish itself in new markets. But the lack of profits in its home market, where it has been operating for eight years, and others such as Southeast Asia, raise questions about the company’s business model, which relies on heavily subsidising both riders and drivers to keep prices low using the billions of dollars in venture capital the company has raised.
Khosrowshahi’s comments are also a testament to Lyft’s growth. The smaller ride service, which started in 2012 and only operates in the United States, has expanded to more than 350 cities across 41 states this year and last month raised $1 billion in a financing round led by Alphabet Inc.
For a brief period last year, Uber was profitable in the United States and Canada, the company said.
Khosrowshahi outlined the challenges in Southeast Asia, where Uber has had to spend heavily to compete with local ride services Ola and Grab.
