In the first nine months of 2016, the pioneering internet taxi service Uber lost more than $2.2 billion, a figure which is expected to reach at least $3 billion by year's end.
In the third quarter alone, Uber lost more than $800 million, Bloomberg reports based on an anonymous source.
The losses have occurred while Uber’s revenue continues to grow. During the first nine months of 2016, Uber lost more than $2.2 billion but earned $3.76 billion in net revenue.
On paper, the company is valued at $69 billion, making it worth more than General Motors and Twitter combined.
Uber announced in August that it was leaving China, after acquiring 17.5 percent of the Chinese company Didi Chuxing, which in turn invested $1 billion in Uber. Uber's financial statistics for the third-quarter of 2016 do not include its China operations.
In addition to its 2016 financial losses, Uber is estimated to have lost at least $2 billion in 2015. However, Bloomberg suggests that figure may be low, because it doesn’t include interest, taxes or stock-based compensation.
Uber's largest U.S. competitor, Lyft, has assured investors that it will lose less than $150 million per quarter.
In May, Uber and Lyft both left Austin, Texas, after that city’s residents voted that their drivers be fingerprinted and undergo background checks, as required of other taxi services that operate in the city.
If other cities follow suit, that could put Uber out of business, speculates economist Dean Baker in the Huffington Post.
Baker notes that Uber considers its drivers to be independent contractors, not employees, and the company therefore is not responsible for paying Social Security taxes, nor workers’ compensation for drivers who get hurt in traffic accidents. In addition, it doesn’t have to withhold income taxes, and its drivers don’t have the right to unionize.
These factors give Uber a huge competitive advantage over traditional taxi services, notes Baker, and gives the company the potential to monopolize the taxi industry, which is why the company attracted $66 billion in market capitalization.