Rapid global urbanization has made urban ground collapse caused by damaged underground pipelines increasingly frequent, with groundwater seepage a key inducing factor. In Zhengzhou, a typical high-incidence area, local hydrogeological conditions near rivers and beside the green belts flanking impervious pavements can give rise to lateral groundwater seepage. This study analyzes the soil loss mechanism at damaged pipeline openings under such seepage to reveal the disaster-causing mechanism of the resulting collapse. A mass flow equation for soil loss at the pipeline opening under lateral seepage was derived from seepage-free soil loss theory, and the loss rates on the two sides were compared. The loss process was then simulated by coupling the Lattice Boltzmann Method with the Discrete Element Method; the simulated mass flow at the opening agreed well with the theoretical results, validating the equation. The results indicate that lateral seepage deflects the zone of soil particle loss toward the seepage initiation boundary, inducing a “backward erosion” mode at the bottom of the soil layer. The seepage force creates a dominant erosion channel at the pipeline bottom, whose continued development hollows out the overlying soil support, destabilizing the soil arching effect and causing asymmetric collapse.