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Pipsqueak Lyft could reach profitability before giant rival Uber

John Zimmer, co-founder and president of Lyft Inc.
David Paul Morris | Bloomberg | Getty Images
John Zimmer, co-founder and president of Lyft Inc.

Lyft, the number two ride-hailing company in the U.S., could be profitable before arch rival Uber, given just how much money Uber is spending to grow its international business, people familiar with both companies' finances told CNBC.

In 2016, Lyft lost close to $600 million after pulling in $700 million in revenue, people familiar said. The news was previously reported by The Information's Amir Efrati.

"We tripled our business and grew faster in 2016 than 2015," Lyft co-founder and president John Zimmer told CNBC. "We're growing faster than the competition and that is what we're going to continue to do."

That same year, Uber was set to lose about $2.8 billion from revenue of close to $6 billion, after driver payouts, sources told CNBC.

"In 2017, we're going to keep the pedal down and our focus has been taking care of drivers and passengers, which is leading to a greater preference for Lyft," said Zimmer.

The two companies compete fiercely across the U.S. for riders but internationally, Lyft has opted to partner with local ride-hailing services, rather than pouring cash into vast money-losing overseas operations. Uber has invested aggressively to grow its global empire.

In December 2015, Lyft joined forces with Didi Chuxing in China (then called Didi Kuaidi), Ola in India and GrabTaxi in Southeast Asia — a bid to compete with Uber CEO Travis Kalanick's global ambitions.

Less than a year later, Uber retreated from China, selling its China business to Didi. As part of the deal, UberChina acquired a 20 percent stake in Didi, and the Chinese ride-hailing company invested $1 billion in Uber. Kalanick said the start-up had been losing $1 billion a year in China. A source told CNBC that the company had spent $2 billion in two years trying to battle Didi.

Uber is now focused on India, where it faces an uphill struggle against local rival Ola, a fight some analysts have said it has to win.

Uber and Lyft declined to comment on the specific numbers reported in this story.