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Four taxi apps form ride-sharing alliance to take on Uber
CLEARER battlelines have just emerged in the worldwide battle among taxi apps. Specifically, the race is between global ride-booking behemoth Uber and "Not-Uber", a new alliance among four well-funded, localised platforms.
GrabTaxi, Didi Kuadi, Ola and Lyft on Friday announced a global ride-share partnership to roll out "joint-partner products" across their combined markets of South-east Asia, China, India and the US in Q1 2016.
Anthony Tan, GrabTaxi chief executive, told The Business Times: "GrabTaxi users, for example, will be able to use their GrabTaxi app to hail a Didi car in China, a Lyft in the US, or an Ola car in India."
In turn, GrabTaxi will help Didi, Ola and Lyft provide rides to their users travelling in South-east Asia.
Said Mr Tan: "This is a terrific development for users of all four companies, many of whom regularly travel abroad, and a natural extension of our commitment to making transportation easier, safer, faster and more reliable."
The quartet will collaborate across technology and product development teams for seamless cross-border usage of the apps.
"Details will continue to be determined through this collaboration process, including the possibility of global coverage of services currently available only in local markets . . . and will be shared closer to roll-out dates of the joint products," said Mr Tan.
GrabTaxi's services in South-east Asia include GrabTaxi (for taxis), GrabCar (private cars), GrabHitch (car-pooling) and GrabExpress (last-mile delivery).
The four-way partnership, an extension of the ride-share agreement between Lyft and Didi in September, comes as rival Uber is reported to be raising some US$2.1 billion in a financing round that would value the company at US$62.5 billion.
Said Yang Nan, assistant strategy and policy professor at the National University of Singapore Business School: "Uber has developed intercontinentally, but these four companies have only developed regionally. The last thing these companies need is another Uber coming their way."
By agreeing to "share" rides, the four implicitly agree on "de facto mutual forbearance" (reduced competition among rivals), which is important for their medium-term growth, he added.
Ride-sharing is a local business, said GrabTaxi's Mr Tan. "Every region presents a unique set of challenges and opportunities. When it comes to big markets like China, India and the US, we believe partnering with local experts makes sense."
GrabTaxi, said to be South-east Asia's leading ride-booking app, gets up to 1.5 million daily bookings in six countries. Didi provides seven million rides daily in 360 Chinese cities, and Ola, over a million bookings a day in more than 100 Indian cities. Lyft is said to chalk up more than seven million rides a month in more than 190 US cities. Uber is in over 300 cities worldwide (including those served by the four) and does not reveal trip figures.
Aswath Damodaran, a finance professor at the Stern School of Business at New York University, said: "Uber is clearly going after the global market and is uninterested in forming alliances with local ride-sharing companies."
As competition intensifies, each side is going to try and find a way to cause the other side to "self-destruct", he told BT.
But the success of Uber and its peers in changing the taxi industry is a reminder that existing business models can be disrupted in short order by new technologies, he added. "The collective losses reported by these companies are also a reminder that making money on disruption is much more difficult."