Who are Uber's main rivals?

The ride hailer's travails could yet see it overtaken.

by Arun Kakar
Last Updated: 20 Dec 2017

Harassment scandals, resignations, bans, lawsuits, power struggles... suffice it to say Uber hasn’t had a great 2017. In a Christmas gift that suspiciously resembles a lump of mishapen coal, the ECJ just delivered a further blow, ruling that Uber is cab firm, not an ‘information services’ company as Uber insisted.

PR disasters notwithstanding, Uber’s dominance of the market remains sturdy and it is still on track to surpass last year's turnover of $6.5bn. Indeed, revenues actually grew 15% between March and September, when the #deleteuber campaign was in full swing (costing it 400,000 users in the US alone).

Market share has fallen, but it still stands at a colossal 74% as of November, compared to 84% last year. The fact remains that very few firms have seen expansion like Uber has over such a short space of time.

There is, however, cause to be sceptical about its future prospects. Uber’s greatest weakness is its vulnerability to hostile regulation - and ongoing stories of data misuse, insufficient protection for workers and public safety concerns do not mix well with tetchy regulators and unsympathetic courts. If it fails to appeal successfully against TfL’s decision not to renew its license in London, for example, it could lose a market of 3.5 million users and 40,000 drivers in an instant.

Yet there are other ride hailers waiting to turn Uber's loss into their gain. Here are the four biggest contenders:

Lyft

Revenue: $700m (2016)

The home challenger. Founded on Uber’s turf of San Francisco in 2012, Lyft has just had its best year yet. It expanded to 360 US cities, announced that it was making 1 million rides a day, grew US market share to 22%, and took its first steps abroad, in Canada.

All this expansion burns a lot of fuel, but fortunately for Lyft it has plenty in the tank, having raised over $3.6bn from a group of backers including General Motors, Alibaba and Tencent.

This all bodes well for its future prospects, but the clearest sign yet of Lyft’s cashing in on Uber’s reputational battering was in October, where it announced that it had raised $1bn of funding from Alphabet’s investment arm, CapitalG, bringing its total valuation to $11bn.

That's significant because Alphabet is also a long-time Uber backer. Google Ventures invested $250m in Uber in 2013, but relations have since soured over an ever-more bitter IP spat. Uber is being sued by the Alphabet-owned autonomous car firm Waymo for stealing secrets. It all centres on a former Uber employee, accused of downloading 14,000 tech documents that he used to found a self driving truck company that was later acquired by the ride hailer. Crickey.

That could just be Alphabet hedging its bets, but in any case, Lyft's got Uber spooked: The Verge reports that Uber is hiring independent contractors equipped with burner phones and credit cards to as part of a ‘sophisticated effort to undermine Lyft and other competitors,’ which Uber denies.

Mytaxi

Revenue: Unknown

The fast mover. Mytaxi became Europe’s largest cab hailing operator last year when its parent company Daimler absorbed UK based platform Hailo. It’s avoided many of the pitfalls of Uber by matching customers with registered drivers, which has crucially kept the black cabbie faithful onside in London.

Hailo had been operating in London since 2011, but an ill-fated American adventure put it firmly into reverse. It entered the New York market with $30m of VC money with the intention of forging the same bond with yellow cabs as it had done so successfully in London. It didn’t work. Uber’s dominance of the more expensive market led Hailo to offer cheaper rides, which backfired. Then-CEO Jay Bregman left in 2014 amid losses of over £22m, and Hailo soon pulled out of the US altogether, seeking new rounds of funding in 2015 that quickly turned into talk of acquisition.

When it decided to join with Mytaxi last year, the aim was to become the dominant force in Europe through solid relationships with its drivers - something Uber cannot always boast about. As Daimler continues to add more European hailers to its stable (recent acquisitions include Romanian market leader Clever Taxi), it is banking on its trustworthy, cab-friendly reputation to capitalise on Uber’s failures. ‘We don’t go into a city and tell that city how to run its transport, but we try to work in harmony with that city and that’s a primary point of difference,’ said UK CEO Andrew Pinnington.

Gett

Revenues: $500m (2016)

The dark horse. Gett was launched in 2010 by two Israeli entrepreneurs, first taking on Tel Aviv and then London in 2011 before expanding to over 100 other countries. Partnering with established cabbies like Mytaxi, Gett's business model is the most flexible of the big ride hailers. Depending on the city, it either charges dispatch fees on a monthly basis or uses a per ride charge system.

Gett serves over 7,000 corporations and has had a busy few years. Volkswagen signalled its intention to ‘go beyond vehicle ownership’ in the form of a bold $300m minority investment last year, and the company put its foot down in the difficult New York market earlier this year by purchasing rival NYC-based firm Juno for a rumoured $250m.

It was said to be looking for $700m of funding at a targeted valuation of $2bn in April, but that has not materialised.

Didi Chuxing

The honourable mention. The Chinese firm claims operations in 400 cities domestically and 450 million users at a total valuation of $50bn, making it by far Uber's closest global rival in terms of sheer scale. Uber has clashed with Didi before, being strong-armed out of Didi’s home-turf last year after the Chinese firm received a $1bn investment from Apple.

The resultant cease-fire left Uber with a fifth of Didi, and Didi with a small stake in Uber, but apparently there were no promises of non-aggression: Didi's planning on expanding into Taiwan and, more worryingly for Uber, Mexico. Whether Didi has the time or money to take Uber on worldwide remains to be seen, but it may be tempted if Uber's forced into retreat by regulators.

Image credit: Pixabay/Pexels

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