The dynamics of the e-hailing ride subsector of the economy are quickly altering as a result of new waves of global competition.
Current market patterns around established firms like Uber and new entrants like Careem, Didi, Taxify, LoadMoto, and Bolt, among others, are evidence of this.
With the entry of competitors like Bolt, LoadMoto, LagosRide, OgaTaxi, and SmartCab, among others, the Uber monopoly in Nigeria has been seriously damaged.
Indeed, according to a study by Alpha Partners, Uber’s global market penetration helped it grow into the industry’s goliath. However, Didi Chuxing of China is now challenging that hegemony by investing in a number of Uber competitors or by directly entering markets like Brazil.
Information revealed that Didi is attacking Uber in the nations where they both operate, where Uber holds significant equity shares in the local leader, and where Didi’s money-stealing companies are located.
Accordingly, previously unreleased internal statistics revealed the drastic decline Uber has seen in the Middle East over the past year, while maintaining its dominance in regions like Latin America but losing near-monopoly status in certain of that region’s as well as in Africa and Australia.
The analysis also pointed out that while Africa is Uber’s smallest region by revenue and has many growth barriers, the company has a strong hold on nations like Ghana, Uganda, and Tanzania.
However, it emphasized that San Francisco is more prosperous than sub-Saharan Africa on its own.
The article claims that Taxify, one of Didi’s proxies, has been increasing its market share in nations including South Africa, Kenya, and Nigeria. Based in Estonia, Taxify also has operations in Australia, sub-Saharan Africa, and Europe. Didi owns about 20% of the company.
According to Mr. Villig, CEO of Taxify, the business is on target to make $1 billion in gross income this year through activities in a number of different areas. He wouldn’t say if Didi planned to invest more money in his business this year, but Taxify is widely thought of as a potential target for a takeover by Didi, particularly if Didi views its purchase of 99 in Brazil to be successful.
The competition between Didi and Uber first became apparent in Brazil, where Didi purchased Brazilian incumbent 99 last month after acquiring a sizeable minority investment in the company a year earlier. This was the first international expansion for Didi outside of China and Hong Kong.
Didi is currently establishing operations in Mexico, where Uber has a virtual monopoly, in an effort to disrupt this. Given some of its recent growth challenges and the growing competition in its own market, it is uncertain how much more desire Didi will have for international development in the near future.
The Middle East and Africa are additional frontlines. For instance, Uber is competing against Careem, a Dubai-based competitor supported by Didi, from Egypt to Pakistan.
According to the Alpha investigation, Uber’s internal data indicated that the company’s market share in terms of revenue decreased to about 50% from 69% the previous year.
According to a local expert, Uber saw a decline in income in Saudi Arabia. However, according to industry officials, the Middle East’s ride-hailing market is still quite modest, bringing in less than $1.5 billion in total revenue between Uber and Careem in 2017.
However, a source for Uber claimed that at Careem’s expense, the company has been increasing its market share in the area so far this year. Careem disputes this, but neither company will disclose financial information on their activities in the region, which is behind sub-Saharan Africa Uber’s second-smallest revenue-producing market.
Analysis indicates that India represents a further front in the conflict between Uber and Ola. Based on previous financials, Uber probably made more over $1 billion in gross revenue from India last year.
According to the article, Ola is putting more pressure on Uber by expanding into Australia, where Uber is dominant despite having a small but high revenue per user market.
Uber has already left certain markets by selling to regional competitors. It was sold to Yandex in Russia in 2015, Grab in Southeast Asia earlier this year, and Didi in China in 2016. Uber executives predicted they would be able to spend more money in the remaining markets after the first two sales in order to avoid another loss to a competitor. Uber ultimately gained more territories.
Ride-hailing, according to Alpha, is a particularly interwoven sector. It emphasized that Uber now owns a tiny investment in Didi and that Didi now owns a small stake in Uber, both of which were acquired through the sale of Uber’s China operations.
“However, the companies’ executives have vowed to compete against each other globally. Didi and Uber also share the same outside investor, SoftBank, the Japan-based conglomerate. It owns about 15 per cent of both Uber and Didi. SoftBank also is a major investor in Ola. With none of the firms anywhere near profitable, SoftBank is expected to support further consolidation around the world, and a reduction in the financial subsidies all ride-hailing companies use to attract new riders and drivers,” it stated.