Uber will continue to lose money in its home market for at least the next six months as rival Lyft 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 U.S. is very, very competitive right now between us and Lyft, so I don’t see the U.S. 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.
Uber have been operating in the U.S. for 8 years now without a sustained profit. They have relied on huge investments to fund a heavily subsided business model to gain and maintain enough market share to hopefully one day become a profitable company.
But with fierce competition coming from Lyft in America and their Asian equivalent, Grab, this war of ‘who has the most money in the reserves’ to outlast the rest, is likely to go on for quite some time yet.
Khosrowshahi was tapped to run Uber in August after leading travel-booking site Expedia 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.
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.
“The economics of that market are not what we want them to be,” Khosrowshahi said. “I think it’s over-capitalised at this point. We’re going in, and we’re leaning forward. But I’m not optimistic that market is going to be profitable any time soon.”
However, he dismissed the prospect of further consolidation similar to the merger deals Uber struck with competitors in China and Russia.
As reported in Reuters, Khorowshahi spoke about Uber’s current plight in Brazil and most notably Britain, the U.K. in particular, saying he’s held “productive” talks with Transport for London following their refusal to issue a new operators licence.
He went on to add: “We were guilty of not communicating. I think we were generally immature in how we deal and dealt with regulator.” He continued to say his team were working to meet the “perfectly reasonable asks” from those at TFL.