Uber’s CEO Travis Kalanick says the company is profitable in its developed markets even beyond the US, but those profits are being immediately reinvested in winning the war in China.
In an interview with the Financial Times, Kalanick said the company is making money in North America, Australia, and its EMEA (Europe, Middle East, and Africa) region. “Profitable” in this case means Uber is taking into account all general and administrative costs, but excludes interest and tax.
However, whatever “profits” Uber is generating is going right back into the unprofitable markets, notably, Asia.
“We have hundreds of cities that are profitable globally,” Kalanick told the FT. “That allows us to invest in new places, and to sustainably invest in a very expensive place like China.”
Currently, Uber is stuck in second place in China, competing against an opponent that just finished a $7.3 billion fundraising round that included a $1 billion investment from Apple. While Uber is operating in 60 cities in China, Didi Chuxing (formerly Didi Kuaidi) is in more than 400. Of those, the Chinese company claims it’s profitable in half.
Still, Uber is spending heavily, having recently raised a $2 billion credit line and brought in $3.5 billion from an investment from Saudi Arabia’s sovereign wealth fund. Much of that money will go into China.
“We are number two in China, which means that we still have a ways to go,” Kalanick said. “But we are putting everything on the field.”