Credit: Mark Warner

Lyft forges anti-Uber axis

Uber is reportedly looking for another $2bn in funding as its international rivals form a global pact.

by Adam Gale
Last Updated: 29 Jan 2016

It’s Uber vs alles in the taxi world. Alongside resistance from entrenched incumbents and their regulatory cronies, Uber also has to contend with local rivals, many of which are more advanced in their respective territories. Now four of those competitors have formed an alliance to take on Uber worldwide.

US ridesharing app Lyft announced a partnership with Chinese market leader Didi Kuaidi a few months ago, and now India’s Ola and southeast Asia’s GrabTaxi have joined the team. Travellers will be able to hail rides in any of the other firms' countries through their home nation’s app, without having to worry about language barriers or paying in a foreign currency.

Having opponents gang up on you is a disconcerting experience at the best of times and Uber’s rivals may get a boost in ride numbers from tourists and business travellers, but it’s hard to see how that could be decisive.

Another $2bn (£1.3bn) in Uber’s war chest, on the other hand, might well be. Bloomberg sources say Uber’s trying to raise such a sum in yet another funding round, adding to the $10bn it’s already raised in debt and equity. If achieved, that would value the company at a whopping $62.5bn and turbo-charge its international expansion efforts.

The competition between Uber and its rivals is more of a sprint than a fistfight. Who can become entrenched in the most cities first? Once Uber has achieved a critical mass of drivers in a city, it’s much harder for a rival to muscle in on the action, and vice versa. More drivers means shorter wait times (unless regulators decide to impose longer ones...), which is a huge competitive advantage.

This is why Uber and the others are so frantically trying to raise cash. If they don’t expand at breakneck speed now, it could be too late - something that also applies to beating sluggish regulators, which will have a harder time clamping down on ridesharers once they’re firmly established.   

The crucial battleground is China, where Didi Kuaidi operates in over 300 cities and Uber intends to be in 100 by the end of this year (up from 20 three months ago). But even if Uber has to settle for second best in China, which is already its biggest market, it still has a huge lead in its global reach.

Between them, Lyft et al operate in nine countries (though those countries do account for half of the world’s population) – Uber’s in 67 and rising (it was 58 in May). Unless the gang of four start pooling resources and expanding out of their home markets (there aren’t many more local ride-sharers they could ally with), Uber still seems likely to remain the world’s top ridesharing dog.  


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