Has Uber’s Market Peaked?
Uber’s rise has been phenomenal. It started as a ride-sharing app conceived in San Francisco in 2009. Now, a little more than half a decade later, a recent funding round valued the company at more than $60 billion. The company has disrupted the taxi industry in the US and dominates the on-demand taxi market with a presence in more than 300 cities in more than 64 countries. The company has overcome violent taxi driver protests in many cities to become synonymous with the online taxi business.
Uber’s size and market influence is forcing competitors to form alliances to fight back. Four of Uber’s biggest rivals — Lyft, Ola, Didi Kuaidi and GrabTaxi — have entered into a partnership to give Uber a run for its money. Lyft, headquartered in San Francisco, is Uber’s main competitor in the US. Ola operates in India, where it has over 80% market share, and Didi Kuaidi controls more than 80% of the market in China. GrabTaxi has a presence across Malaysia, Singapore, Indonesia, the Philippines, Vietnam and Thailand. The four companies offer tough competition individually to Uber in their respective markets and starting in 2016 will allow users to book cars in all regions they operate in through a common app. The companies will share technology, local market knowledge and business resources while each country will handle mapping, routing, and payments through a secure API.
“Together, these companies now cover nearly all of Southeast Asia, India, China and the US, reaching nearly 50 percent of the world’s population,” the four companies stated in a joint press release.
Ride sharing is also booming in Latin America, where Easy Taxi is the major player. This week, the company announced it was merging with Tappsi, bringing together the two market leaders in Colombia. In Lima, Peru’s capital, where Uber is just one of 10 ride-sharing apps in the city, Easy Taxi makes up to 50,000 trips per day. Ride-sharing programs have proved popular in Sao Paulo, Brazil and in Santiago, Chile. Ride sharing fills the need of metropolitan users for relatively safe, inexpensive and reliable transportation and create wage-earning opportunities for drivers.
Uber has funded its global growth by raising more than $8 billion to date, while the international “anti-Uber” alliance has raised about $7 billion. Uber now has reason to worry as the company faces increased competition in overseas markets. How well it performs in these markets will largely depend on its ability to adapt to local practices quickly.
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