RIDE hailing app company Uber Technologies Inc. is generating more than US$1 billion in profit a year in its top 30 cities globally, and partly using that money to bankroll its expansion in China, chief executive Travis Kalanick said in an interview.

    The company said in February it was losing more than US$1 billion a year in China’s red-hot ride hailing market, where it is battling large local incumbents to win customers.

    Kalanick said China was the company’s most intense market, but also a crucible for new ideas that it has exported to other markets, and that its investment here was sustainable.

    “If you took our top 30 cities today, today they’re generating over US$1 billion in profit a year, just our top 30 cities. And that profit multiplies every year because we’re growing,” he said late Thursday on the sidelines of the Boao Forum in the Chinese island province of Hainan. Other cities among the 400 where Uber operates were also profitable.

    Uber and China’s Didi Kuaidi, backed by Chinese technology giants Tencent and Alibaba, have both spent heavily to subsidize fares to gain market share, betting on China’s Internet-linked transport market becoming the world’s biggest.

    The strategy seems to be working for Uber. The company’s market share in China has grown quickly, rising from about 1 percent to 2 percent in January 2015 to about 30 percent now.

    China’s transport minister said earlier this month fare subsidies and the supplementing of driver wages by ride-hailing companies were competitively unfair and unsustainable in the long-term.

    Kalanick said so far Uber had not faced major regulatory challenges in China, possibly because the government has been trying to drive innovation and Uber fits the narrative.(SD-Agencies)