On just about any continent in the world, you can open up the Uber app
and probably find a driver nearby. What started as a Silicon Valley startup
has now turned into a global company worth tens of billions of dollars.
But Uber has competition across the globe - and it’s fierce.
It may come as a surprise to some that Uber loses money - a lot of it.
Uber lost $4.5 billion in 2017 and $2.8 billion the year before.
On the surface, Uber seems like a fairly simple software
in the form of an app which simply connects a driver and a passenger.
But underneath the surface, the company is losing a lot of cash.
But Uber’s okay with that, with its CEO saying:
"Heavy losses are necessary to establish itself in new places."
Take Southeast Asia for instance.
Uber aggressively spent money on advertisements,
partnerships with taxi companies and regularly subsidized fares.
To encourage more drivers on the road, Uber started its own rental car business
in Singapore under the name Lion City Rentals.
And because of subsidies, renting a car from here can be cheaper than hiring
from rental-car companies like Hertz or Avis.
It’s no wonder then why Uber’s losing so much money,
but who are the global players forcing it into the red?
Let’s take a look at some of the biggest ones.
Didi Chuxing is China’s biggest ride-sharing service.
And given China’s population is a massive 1.4 billion people,
Didi is also considered the world’s largest ride-sharing service.
Uber fought hard in China for three years, burning through $1 billion a year to stay in the game.
And in 2016, Didi finally purchased Uber’s China operations.
Uber would take a nearly 18% stake in Didi. It’s a move that seems to be paying off.
At the beginning of 2018, Didi briefly passed Uber, becoming the world’s most valuable start-up.
Uber may have given up its fight in the world’s most populous country,
but it’s still pushing ahead in the world’s second biggest, India.
India’s home competitor is Ola, which was launched in 2010.
Today, it has more than one million drivers across 110 cities.
That’s far more than Uber’s 450,000 drivers across 31 cities.
But Uber is staying put, saying business is stronger than ever.
Back on Uber’s home turf is Lyft, which has been profiting from recent Uber controversy.
Lyft recently reported it has doubled its rides in 2017, a year that started with the #DeleteUber campaign.
Uber’s CEO, Dara Khosrowshahi, even admitted late last year
that the U.S. market has become unprofitable because of competition from Lyft,
and will stay that way for at the least six months.
But the battle is far from over.
Uber is still America’s number one travel app, with Lyft following close behind at number two.
In Indonesia, the world’s fourth largest country, is GoJek.
Its fleet now includes more than 400,000 cars, and motorbikes,
which are common throughout Southeast Asia.
In Southeast Asia, which boasts a total population of more than 600 million, is Grab.
Grab was started in Malaysia in 2012, with just 10 employees.
Now, with headquarters in Singapore, it has more than 3,000 employees and claims four million daily bookings.
While those are some of the biggest players,
you’ve also got 99 in Brazil, Yandex in Russia, BlaBlaCar in Europe and Careem in the Middle East.
And recently, company deals among the players have made the landscape pretty convoluted.
For example, Didi in China outright acquired Brazil’s ride-sharing app 99 in an effort to expand in Latin America.
So, one of Brazil’s largest ride-sharing apps 99 is competing with Uber in Brazil,
yet 99 is owned by Didi, who actually bought Uber in China.
If that seems confusing, well, you’re right.
But that’s just one example of where the line becomes blurred over who’s a friend and who’s a foe for Uber.
Even though Didi bought Uber in China, Didi also invested in Careem in the Middle East
and Grab in Southeast Asia - both of which competed against Uber.
Then there’s Softbank - the massive Japanese conglomerate.
The company has invested billions of dollars in Didi, Grab, Ola and 99.
For awhile it seemed like Softbank’s strategy was to invest in Uber’s competitors around the world.
But in January, Softbank secured about a 15% stake in Uber with an additional investment of $1.25 billion.
It’s kind of like hedging your bets. No matter which companies win or lose,
Softbank has set itself up to win a piece of the pie, no matter what.