Obviously yes, it is a threat for Uber. And both in Asian and American market.
The cross-app service of the partners that is available now eliminates any switching costs (time, currency, language, …) that could be incurred by Uber’s consumers. Lyft in the U.S., Didi Kuaidi in China, Ola in India and GrabTaxi in SouthEast Asia cover all together lots of… Read more
Obviously yes, it is a threat for Uber. And both in Asian and American market.
The cross-app service of the partners that is available now eliminates any switching costs (time, currency, language, …) that could be incurred by Uber’s consumers. Lyft in the U.S., Didi Kuaidi in China, Ola in India and GrabTaxi in SouthEast Asia cover all together lots of areas. Therefore, it is quite interesting for international users who are concerned by the countries covered by this app since it does not involve any additional costs for them (switching costs).
Moreover, this big merger allows these four companies to save money and resources since each company do not have to adapt their offer and app to new market, unlike Uber which have to. Each partner can count on the knowledge and strength each one have on its respective market. Furthermore, by expanding their network abroad, it allows companies to better know consumer preferences and thus increase the quality of their services based on these consumer needs.
Another issue Uber has to deal with is the drivers. Effectively, they can move very easily from one platform to another as they do not have exclusive contracts with their service providers. Drivers are more and more sensitive to financial issue and do not hesitate to move if they have better offers elsewhere. Plus, the limited supply of quality drivers does not help matters. Thus, companies have to spend money to create incentives for drivers to be loyal (minimum working time in exchange of leasing for example).
But the fact here is as follow: once again, the partnership takes the advantage compared to Uber. Each partner gain “territory” without having to fight incumbent companies. Moreover, they can all benefit from open innovation among each other which is “an alternative for sharing increasing development costs with partners when technology becomes more complex and product life cycles shorten » (examples of the article: “from product innovations to driver support, technology developments, winning on the regulatory front and approaches for managing local operations in a rapidly scaling organization”). So this can allows them to achieve higher impact at lower cost. For their part, Uber takes a different way by aggressively expanding into countries like China instead of partnering, attacking current ridesharing leaders there.
Even if they wanted to, Lyft could not adopt the same strategy as Uber: they are not powerful enough compared to Uber and could not afford to spend such amounts of money. To give you an idea, Uber has a market valuation more than ten times bigger than Lyft’s one ($50 billion compared to $4 billion). So if Uber and Lyft followed the same strategy, Uber would always override Lyft which would not survive.
Will this success of the partnership be sustainable in the long run? That is the question. I think it is pretty the same deal for all the continents (including Europe and Latin America). International consumers will always be a threat for Uber if it do not give advantages similar to those of the partnership. But if Uber pulled it off, even if it will cost lots of money, it would be the number one almost everywhere…
• Bengtsson, L., Lakemond, N., Lazzarotti, V., Raffaella Manzini, Pellegrini, L., & Tell, F. (2015). Open to a Select Few? Matching Partners and Knowledge Content for Open Innovation Performance. Creativity and innovation management, 24(1), 72-86.
The partnership of Lyft is clearly to be seen as a threat to Uber, according to me. But I think that this is a real threat only on the expanding market of Uber.
First, in the American market, Uber is very popular and very well established. I think they have won the people’s trust and have proved their capabilities. Therefore, Uber… Read more
The partnership of Lyft is clearly to be seen as a threat to Uber, according to me. But I think that this is a real threat only on the expanding market of Uber.
First, in the American market, Uber is very popular and very well established. I think they have won the people’s trust and have proved their capabilities. Therefore, Uber has a great competitive advantage in this market and people with stick with this company. Uber also have created a big infrastructure with big resources and therefore they can keep the drivers from using the other transportation competitors using interesting incentives.
However, in the Asian market, Uber isn’t as good implemented as in the US. They may benefits from their international reputation but they can’t only rely on that as the competitors are doing very well too. With the partnership of these competitors, Uber face a bigger threat: like said in the article, the alliance reduce the switching cost between the firms. The advantage Uber had (no switching cost) now disappear.
From the one side of the platform, the users can more easily switch between the different competitors and aren’t tied to one provider. Loyalty to the brand is therefore harder to get. Users could even have several applications on their phones and will pick the most interesting one, likely depending to the price of the ride and the availability of the drivers.
The other side of the platform, the drivers will chose the company with the most incentives. This side of the platform is more important for the company as they are a key factor in attracting the users. The alliance of the different actors on the Asian market is therefore a real threat to Uber has they have more power, more resources and can then give bigger incentives to the drivers. So even with Uber worldwide recognition, it’s not enough to be leader on the market, even less as they are still developing in this market and not a proper leader.
Finally I think that such a partnership could also affect the competition in other markets as Europe or Latin America but to a lesser extent as Uber is already good implemented. Lyft could still become a strong competitor as these markets aren’t dominated (yet) by Uber. As it is also said in the article, such a partnership has to be durable in order to really bother Uber and therefore affect the competition.
I am personally more sceptic about Uber’s future success in Asia. As you mentioned, the key point for those companies is to attract drivers. Financial incentives are surely a way to attract them but it is not enough in my opinion. Simply setting a business model in a foreign country without adapting it to specificities of this country may… Read more
I am personally more sceptic about Uber’s future success in Asia. As you mentioned, the key point for those companies is to attract drivers. Financial incentives are surely a way to attract them but it is not enough in my opinion. Simply setting a business model in a foreign country without adapting it to specificities of this country may lead to some errors (as Ghemawat mentionned here: http://mbi.dirkjanswagerman.nl/static/files/MBI/Module%2021/Distance%20still%20matters.pdf ). I think we can’t underestimate the trust and reputation that those Asian companies have already built with their customers and “producers”. Moreover, their alliance is, as you said, a smart move.
Concerning Uber’s position in Europe, I think it will increase if they succed in breaking the “legal issues”. Uber is indeed well known nowadays in Europe, and even more thanks to these legal issues, and I don’t see any opportunity for rivals to act like lyft did in Asia.
In any cases, there will always be a threat of a new business model appearing thanks to the entrance of a new competitor. This is why both Uber and Lyft can’t focus only on their expansion but also on the protection of their “realm”, and try to reduce the potential entries on their market.
In my opinion, Uber has to review its strategy since the alliance because of course, it forms a new threat. Like mentioned, its competitors are forming an anti-Uber alliance, and this provides them a competitive advantage by sharing knowledge and best practices inter alia. Even if Uber is powerful in the market, such an alliance can quickly change that. Moreover,… Read more
In my opinion, Uber has to review its strategy since the alliance because of course, it forms a new threat. Like mentioned, its competitors are forming an anti-Uber alliance, and this provides them a competitive advantage by sharing knowledge and best practices inter alia. Even if Uber is powerful in the market, such an alliance can quickly change that. Moreover, it can have impacts on it’s own market. Being aware of that, Uber decided to diversify their main activity ( in terms of services but also geographically) and trying to lessen the competition by operating on other parts of the market.
Some days ago, Uber decides to launch “UberMOTO” first in Bangkok and then in Bengalore. A new kind of service very adapted to the Asian market because of the difficulty to ride in a very congested city. “Motorcycles are part of the commuting culture in Thailand,” said Douglas Ma, Uber’s head of Asia expansion. “Uber’s goal is to provide safe, affordable, reliable transportation at the push of a button, everywhere for everyone.” (Business insider UK). However, it should be noted that this kind of “bike taxi” service already exist trough the services of GrabTaxi or Gojek and that even if Uber does make a move to counter the previously mentioned alliance, it faces other difficulties such as preferences of consumers and price and safety issues.
Because the Asian market seems quite crowded, Uber very recently announced expansion plans to Africa (Tanzania, Uganda and Ghana). Here the company face new challenges, like the problem of payment while bank accounts and credit cards aren’t the norm but cash is. An Uber account being normally linked to credit cards; Uber has to review this.
Other expansions have occurred in the US too, to maintain and reinforce their market share (Lyft increasingly becoming a strong competitor). “In an effort to encourage more people to use its ride-hailing app for their daily commute to work, Uber has expanded its carpooling service, UberPool, to three more cities in the San Francisco area: Oakland, Berkeley, and Alameda.” ( Fortune)
What concerns Latin America and Europe, Uber faces the everlasting problem of “anti-Uber alliances”. But here the alliance mostly concerns traditional cab, rather than direct competitors of Uber. Very recently there have been violent protests in Mexico, and very high fines in Columbia. This resistance and ongoing lawsuits put again a threat on Uber’s expansion strategy.
The previous examples show that the winner-takes-it-all is no longer the standard in this sector. Netwoks effects being important, they do not determine the outcome anymore. Lyft could successfully expand and “win” by attacking Uber on the lacunas of its own strategy, namely being (too much) focused on a head to head competition. Uber, being a pillar in the sharing economy, should understand that sharing isn’t only about services, but also about strategy. And this can be very useful in such a competitive and growing market.
Does the alliance pose a threat to Uber’s expansion strategy in the Asian market or even its position on the American market?
I think that the alliance doesn't threaten that much Uber in USA. Uber is present in 150 big towns in USA (1) and his reputation is high in this country, even if he knows some troubles with some… Read more
Does the alliance pose a threat to Uber’s expansion strategy in the Asian market or even its position on the American market?
I think that the alliance doesn’t threaten that much Uber in USA. Uber is present in 150 big towns in USA (1) and his reputation is high in this country, even if he knows some troubles with some states, his situation is better than in Europe. Moreover, the alliance companies don’t have financial resources like Uber has.
Last year, the company has searched to raise his funds and collected $2,1 billion (2). These funds will serve to improve his services and working on new technologies for the car. This plan aims to expand activities in Asia. It will be difficult for the alliance to bring down the Uber leader in its own field, in USA.
It will be difficult for the alliance to bring down the Uber leader in its own field, in USA. But on Asian market, the story is different. The alliance has a advantage with the Didi Kuaidi (in China), Ola (in India) and Grad Taxi (in SouthEast Asia) because in Asia, the authorities prefer given the chance to the local firms than the international firms (3). Moreover, Lyft has the support of Alibaba, since the firms has invested $250 million in the ride-sharing app developer in 2014 (4). Also, the situation of Uber is not the same than in USA. He is present in only 22 cities in Asia, contrary to Ola who has present in 102 citites (5).
The second advantage of the alliance is the cross-app service. Thanks to this application, each company will handle her app for her country. The strategy is to keep their independence in their regions all in continuing to grow. The plan is not to merge but work together (6).
And what about other countries such as Latin America or Europe?
In Europe, the situation is not good for Uber. The company has a lot of troubles with the independent taxi in some countries in Europe. And this, because “its business model was incompatible with that market’s predominant government regulations and social norms” in this continent (7).In these conditions, the alliance has also few chances to take the market. The independents taxis in Europe have a strong culture and fight for their rights. If already, the leader Uber has difficult to penetrate the market, the “smaller” firms have not much more likely to succeed.
In Latin America, it’s totally different; Uber knows a success story like in USA. His “introduction in Bogota in November 2013, was the most successful first-year roll-out in the company’s history” (8). Uber offers safety in a country where the safety of taxis isn’t guaranteed. But here too, the competition is stiff. Some taxis companies have merged in Columbia (Esay Taxi and Tapsi) and Uber is far from being the market leader.
Could Uber adopt a similar strategy? And if so, would it be successful?
I don’t think that Uber could adopt the similar strategy, or so with a lot of difficulties. His name is too big and to many firms would take his place. It will be difficult for him to find some companies that would be ready to work with him because in general, they would fight against him and not with him.
But if we think well, that it will be a good advantage for a small startup to make alliance with Uber. The firm would attract the consumers of Uber in locations where Uber don’t have his place or in emerging market, or also in countries where Uber is not welcome. Moreover, the smaller firms could take the advantages of the Uber’s position and develop themselves faster.
Since its launching in 2009, Uber made a tremendous evolution to impose itself as one of the leader in the “sharing car” business. Thereby, new entrants spotted the possible business and joined the market, like Lyft did in 2012.
These companies can’t differentiate themselves in many aspects. As we can see (1;2), only few differences appear in the offers, for example… Read more
Since its launching in 2009, Uber made a tremendous evolution to impose itself as one of the leader in the “sharing car” business. Thereby, new entrants spotted the possible business and joined the market, like Lyft did in 2012.
These companies can’t differentiate themselves in many aspects. As we can see (1;2), only few differences appear in the offers, for example Uber only accepts drivers older than 23 when Lyft accepts drivers from 21. Consequently, the reputation of such a firm is set to be its main asset to catch consumers.
By being the first –or one of the first- on the market of sharing car, Uber achieved to impose itself as the leader in many countries and invested huge amounts of money to stick to that position all across the world. Thus, new entrants such as Lyft, Ola cabs, Didi Dache… have to find new solutions to spread all around the world because they arrive too late and would waste their money trying to beat Uber and other existing companies already implanted.
On the one hand, by creating partnerships, they reduce the switching costs their consumers would face by travelling around the world and therefore maximize their number of users.
But on the other hand, these partnerships don’t ensure consumers to have the same exact service while using it in China or in the USA. Indeed, regular Lyft consumers will use Ola services in India. Even if they would use the same platform to find their cab, they will still face some switching costs as it isn’t the same provider of service. In comparison, Uber has the exact same offer whether you are in Asia, Europe or America.
To wrap things up, I would say that indeed these partnerships between incumbents is a threat to the expansion of Uber – as people using these services (Lyft, Ola…) would then be more inclined to use them abroad- but the worldwide reputation and structures of Uber is, and will always be, a huge competitive advantage, as consumers don’t face any (or at least very few) switching costs. Even if Uber may have to invest many in its own infrastructures, its reputations nearly ensures the company to have consumers ready to use its services.
To complete, I would say that Lyft would waste lots of money trying to adopt a similar strategy. Indeed, the company hasn’t a worldwide known reputation and trying to impose their services abroad would be too risky, as consumers wouldn’t have many incentives in using Lyft services whether than the leaders ’ones already in place.
Is Uber model at risk going forward?
Having been for the last six years the reference company on the on-demand transportation services, the San-Francisco based Uber faces now dramatic changes in market as its major competitors organize themselves to put at least a hold if not a stop to the beautiful story.
As a customer one has probably to look at recent… Read more
Is Uber model at risk going forward?
Having been for the last six years the reference company on the on-demand transportation services, the San-Francisco based Uber faces now dramatic changes in market as its major competitors organize themselves to put at least a hold if not a stop to the beautiful story.
As a customer one has probably to look at recent market development in a positive way as the emergence and the alliance formed by Uber’s main competitors in fast growing on-demand transportation markets (China, India and South-East Asia) will change the market dramatically. Not only will Lyft, Didi Kuadi, Ola or Grab Taxi compete on Uber’s market putting pressure on prices and quality of service. They also join forces geographically using innovative techniques as cross-app service enabling the customer to use his native local application when traveling abroad, using their language and currency and eliminating switching costs. By doing so the companies access new international customers, save development costs and increase quality of service. A major consequence of this new type of offer is that customers do not feel obliged to sign exclusivity contracts easily switching from one company to another as they cannot resist financial incentives. Not to mention additional advantages like sharing best practices.
The increasing number of competitors for Uber leads to a positive cross-side effect. Indeed Uber’s customers value the fact that there is more competition because they have the choice between more options and this competition engenders a decrease in the price of the service. The downtime for drivers decreases as well. Those kind of platforms can’t exist if there are no drivers. One group (Uber’s users) value more the interaction when the participation in the other group (the drivers) increases.
Increase driver loyalty will be the key of success. Current Uber’s competitors association may seem to offer a bright and safe future as intuitively one might think they will operate on their home markets and rely on their fellow associates to provide services abroad. However a successful company in a fast growing business will always want to extend its footprint internationally. That is where the danger arise for Uber’s competitors: they must avoid the balkanization of the markets and ultimately allow Uber to rely on its financial strength and organization to launch an extensive M&A program targeting financially sound actors that will be ready to sell their local business for a high multiple. The future will tell what strategy will ultimately pay-off.
I don’t think it poses a threat for Uber on the American market because, Uber is the first mover and the leader on this market, and Lyft isn’t powerful enough to threaten Uber, even with an international partnership. For example, Lyft doesn’t have an app for Windows Phone while Uber does. Uber also offers different ride options to touch a… Read more
I don’t think it poses a threat for Uber on the American market because, Uber is the first mover and the leader on this market, and Lyft isn’t powerful enough to threaten Uber, even with an international partnership. For example, Lyft doesn’t have an app for Windows Phone while Uber does. Uber also offers different ride options to touch a maximum of people while Lyft only have 2 ride options. Those are two examples that shows that Uber try to satisfy better the customers and that shows why the company is the leader of the market in America.
In Europe and Latin America, I don’t think this partnership will pose a real threat because Uber technology is pretty well installed there and the partnership of Lyft, Didi Kuaidi, Ola and GrabTaxi doesn’t cover neither the European market nor the Latin Amercian one. In Europe, there are others company that lead the market but they are local ones and not international ones so, Europeans know that Uber is the international app to use when they want on-demand transportation services out of their country.
But, I think it will be really difficult for Uber to expand on the Asian market because there are some real competitors like Didi Kuaidi, Ola, Grab Taxi and SoftBank that are leader on their local market. The culture there is different and Asians are very reticent to American companies. Uber in Asia will work well with people from Europe or America travelling to Asia but it will be more difficult to be adopted by Asian people.
Finally, I think that the collaborative partnership of Lyft, Didi Kuaidi, Ola and GrabTaxi is very interesting and it’s really a good way for Lyft to stay on the market and compete with Uber. Lyft couldn’t go to the international market now because it’s too small, not enough powerful and not ready to compete internationally with Uber. But this alliance is a good way for the company to compete with Uber and for Lyft and the other companies to be known internationally.
Both Uber and the alliance between Lyft, Didi, Ola and GrabTaxi offer their service via a multi-sided platform in which there are intermediaries between the drivers and the passengers on peer-to-peer marketplaces. The new alliance is an ingenious idea in order to rival Uber which become more and more powerful on many ride-sharing markets.
Many advantages of this alliance were… Read more
Both Uber and the alliance between Lyft, Didi, Ola and GrabTaxi offer their service via a multi-sided platform in which there are intermediaries between the drivers and the passengers on peer-to-peer marketplaces. The new alliance is an ingenious idea in order to rival Uber which become more and more powerful on many ride-sharing markets.
Many advantages of this alliance were well noticed on the publication but others should also be pointed. Launching a product or a service abroad is not always easy, especially if the country has a different culture. (1) Indeed, it takes time, financial and human resources to understand the culture and to know exactly how to handle the market. The work of the marketer is then really crucial in order to succeed this entry (2). The advantage of this alliance is that the members don’t have to take time on it because they are not physically on the market and their partners can give them all information they want about it. On the opposite, Uber doesn’t benefit from this advantage. Moreover, people are often attracted by local brands because they easily trust them and they valuate the fact that they come from their country. (2) The alliance has this strong advantage. In fact, the clients will always use their local company platform even if they are elsewhere where the alliance is active. In addition, local brands pay usually more attention to their consumers and adapt more their products to their consumer’s needs which is well valuated by them (2). For instance, Ola offers drives in tuk-tuk and GrabTaxi proposes motorcycle-taxi. Tuk-tuk and motorcycle are both common means of transport in their respective countries. (3)
The alliance can also lead to a kind of network effect. Indeed, the application Lyft is compatible in more countries which enchants the users because they don’t have to move to another platform when they travel around the concerned countries.
The advantages I have just mentioned and the others noticed on the publication let think that the alliance has a nice future in the Asian countries. Uber has already met few difficulties to impose itself on these markets (4) and this alliance could strongly brake its development by powerfully improving the competition level. As known, “unity creates strength” and could overcome the giant who want to conquer the entire world. (5) Moreover, this alliance is active on roughly 700 towns which is more than the double of the Uber offer. (6)
Lyft, which is the biggest USA competitor of Uber, made a judicious choice by making this partnership with the Uber’s enemies, which are also leaders on their respective markets. It will be difficult for Uber to rival all these leaders who have a high knowledge of their market and additional forces with their partners. Indeed, this alliance can allow companies to learn from each other and then improve their skills to compete with their local and international competitors.
In addition, Asian governments throw a spanner in the works of Uber. For instance, the Chinese government encourage Didi Kuaidi by forbidding Uber to use Tencent which is used in China for online payments. (5)
Even if Uber faces some difficulties to impose itself on the Asian markets, he will not be pushed around. In fact, he adapts his strategy and could really get through the alliance. For instance, he developed the new concept of UberMOTO in Thailand and will launch it in many Asian countries. (7) Moreover, he invests a lot of money in Asia. With its power, Uber could perhaps foil, not easily, the alliance and impose itself as the leader in the further years. But only the future could answer to this question.
Even if the Asian travellers will probably use Lyft via their ride-sharing service company, I doubt that the position of Uber in the USA will change. Indeed, Uber is really well implanted and dominates the all market.
In Europe and in South America, it is not easy to impose itself on the market. Indeed, many laws regulations are against its practice and the taxi companies are not delighted with its presence in their field. (8) (9) In fact, they organized many manifestations against them because they consider Uber as illegal. (9) (10) For instance, the city council of Sao Paulo voted to ban Uber from his countries, as others countries made before. (11) In the view of the current situation, I suppose that Uber is not close to be the leader on the ride-sharing market in Europe and in South America.
Moreover, Uber’s competitors are present on the European and South American markets which are more privileged by the population. For instance Blablacar is really well widespread in Europe.
In order to improve again its situation, Lyft can extend its alliance with European and South American ride-sharing companies. The strong of this alliance could totally dethrone Uber. One common application in the entire world could be really attractive for the people who are used to travel. But spreading the alliance will take time and needs many resources which let the time to Uber to grow again.
The situation of ride-sharing depends on the future decisions and actions of the companies. Uber is really impressive but Lyft and its alliance could become very threatening for Uber. It is also interesting to notice that Lyft will improve again its situation with a new partnership with General Motors which is the giant of the automobile industry. (12)
Uber is the taxi-hailing leader and hold the pole position in America. However, a partnership between Uber rivals is forming. Indeed the second performer in America, Lyft, is forming a alliance with compagnies that have a foothold in Asian countries.
According to a CNBC’s article, Lyft will be able thanks to this collaboration to leverage Uber’s technology, local market knowledge… Read more
Uber is the taxi-hailing leader and hold the pole position in America. However, a partnership between Uber rivals is forming. Indeed the second performer in America, Lyft, is forming a alliance with compagnies that have a foothold in Asian countries.
According to a CNBC’s article, Lyft will be able thanks to this collaboration to leverage Uber’s technology, local market knowledge and business resources.
In my opinion, Lyft could operate a successful partnership in order to fight off Uber. On one hand I think that Lyft will gain time and essential knowledge to successfully set up shop in Asia. On the other hand I think that Uber is risking to waste time and money in a market hardly reachable.
The strong argument is that such a setting up requires local knowledge that companies such as “GrabTaxi”, “Ola” and “Didi Kuaidi” can provide.
I am strongly convinced that this alliance is definitevely a concern for Uber. It seems that getting foothold in America and Asia could help travelers to book rides from each other’s apps. It means a greater accessibility for the users. This alliance could also allow Lyft to grow and reach a higher level of performance, which could take Uber’s market share in America.
It seems that this alliance provide vital resources to Lyft. Without such resources, I don’t think that Lyft could be in competition with Uber that is the leader. Thanks to this collaboration, it appears to me that Lyft is playing an interesting move and could compete with Uber.
As it is explained is the article “Taking on Uber”, Uber is two-sided platform where users can easily switch from one platform to another because there are no financial contracts behind. It is clear that the collaboration is therefore a smart move because Lyft doesn’t have to fight against local companies in Asia while Uber does…
Then it is clear that Uber is trying to get foothold in Europe but the company is striking against laws and harder reglementation. I don’t think that’s a cultural question here but taxi companies are really trying to slow down the development of Uber.
For instance, if we look at particular countries such as France where strikes are setting up in order to protest against Uber’s drivers that “steal” their clients. In Germany or Spain, there are new restrictions to respect or the service “Uberpop” is forbidden.
In conclusion, it is absolutely sure that this collaboration is a real concern for Uber but the two expansion strategies are very different and Uber is investing heavily to gain international market shares while Lyft is partening and sharing different resources such as local market knowledge, which is the most important to succeed such a establishment in Asia.
Comments for Taking on Uber
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Obviously yes, it is a threat for Uber. And both in Asian and American market.
The cross-app service of the partners that is available now eliminates any switching costs (time, currency, language, …) that could be incurred by Uber’s consumers. Lyft in the U.S., Didi Kuaidi in China, Ola in India and GrabTaxi in SouthEast Asia cover all together lots of areas. Therefore, it is quite interesting for international users who are concerned by the countries covered by this app since it does not involve any additional costs for them (switching costs).
Moreover, this big merger allows these four companies to save money and resources since each company do not have to adapt their offer and app to new market, unlike Uber which have to. Each partner can count on the knowledge and strength each one have on its respective market. Furthermore, by expanding their network abroad, it allows companies to better know consumer preferences and thus increase the quality of their services based on these consumer needs.
Another issue Uber has to deal with is the drivers. Effectively, they can move very easily from one platform to another as they do not have exclusive contracts with their service providers. Drivers are more and more sensitive to financial issue and do not hesitate to move if they have better offers elsewhere. Plus, the limited supply of quality drivers does not help matters. Thus, companies have to spend money to create incentives for drivers to be loyal (minimum working time in exchange of leasing for example).
But the fact here is as follow: once again, the partnership takes the advantage compared to Uber. Each partner gain “territory” without having to fight incumbent companies. Moreover, they can all benefit from open innovation among each other which is “an alternative for sharing increasing development costs with partners when technology becomes more complex and product life cycles shorten » (examples of the article: “from product innovations to driver support, technology developments, winning on the regulatory front and approaches for managing local operations in a rapidly scaling organization”). So this can allows them to achieve higher impact at lower cost. For their part, Uber takes a different way by aggressively expanding into countries like China instead of partnering, attacking current ridesharing leaders there.
Even if they wanted to, Lyft could not adopt the same strategy as Uber: they are not powerful enough compared to Uber and could not afford to spend such amounts of money. To give you an idea, Uber has a market valuation more than ten times bigger than Lyft’s one ($50 billion compared to $4 billion). So if Uber and Lyft followed the same strategy, Uber would always override Lyft which would not survive.
Will this success of the partnership be sustainable in the long run? That is the question. I think it is pretty the same deal for all the continents (including Europe and Latin America). International consumers will always be a threat for Uber if it do not give advantages similar to those of the partnership. But if Uber pulled it off, even if it will cost lots of money, it would be the number one almost everywhere…
Sources:
• http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-partner-in-global-tech-service-alliance-to-rival-uber/
• https://www.ipdigit.eu/2014/04/mind-your-own-business-school-a-case-study-of-a-multi-sided-platform/
• Bengtsson, L., Lakemond, N., Lazzarotti, V., Raffaella Manzini, Pellegrini, L., & Tell, F. (2015). Open to a Select Few? Matching Partners and Knowledge Content for Open Innovation Performance. Creativity and innovation management, 24(1), 72-86.
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The partnership of Lyft is clearly to be seen as a threat to Uber, according to me. But I think that this is a real threat only on the expanding market of Uber.
First, in the American market, Uber is very popular and very well established. I think they have won the people’s trust and have proved their capabilities. Therefore, Uber has a great competitive advantage in this market and people with stick with this company. Uber also have created a big infrastructure with big resources and therefore they can keep the drivers from using the other transportation competitors using interesting incentives.
However, in the Asian market, Uber isn’t as good implemented as in the US. They may benefits from their international reputation but they can’t only rely on that as the competitors are doing very well too. With the partnership of these competitors, Uber face a bigger threat: like said in the article, the alliance reduce the switching cost between the firms. The advantage Uber had (no switching cost) now disappear.
From the one side of the platform, the users can more easily switch between the different competitors and aren’t tied to one provider. Loyalty to the brand is therefore harder to get. Users could even have several applications on their phones and will pick the most interesting one, likely depending to the price of the ride and the availability of the drivers.
The other side of the platform, the drivers will chose the company with the most incentives. This side of the platform is more important for the company as they are a key factor in attracting the users. The alliance of the different actors on the Asian market is therefore a real threat to Uber has they have more power, more resources and can then give bigger incentives to the drivers. So even with Uber worldwide recognition, it’s not enough to be leader on the market, even less as they are still developing in this market and not a proper leader.
Finally I think that such a partnership could also affect the competition in other markets as Europe or Latin America but to a lesser extent as Uber is already good implemented. Lyft could still become a strong competitor as these markets aren’t dominated (yet) by Uber. As it is also said in the article, such a partnership has to be durable in order to really bother Uber and therefore affect the competition.
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I am personally more sceptic about Uber’s future success in Asia. As you mentioned, the key point for those companies is to attract drivers. Financial incentives are surely a way to attract them but it is not enough in my opinion. Simply setting a business model in a foreign country without adapting it to specificities of this country may lead to some errors (as Ghemawat mentionned here: http://mbi.dirkjanswagerman.nl/static/files/MBI/Module%2021/Distance%20still%20matters.pdf ). I think we can’t underestimate the trust and reputation that those Asian companies have already built with their customers and “producers”. Moreover, their alliance is, as you said, a smart move.
Concerning Uber’s position in Europe, I think it will increase if they succed in breaking the “legal issues”. Uber is indeed well known nowadays in Europe, and even more thanks to these legal issues, and I don’t see any opportunity for rivals to act like lyft did in Asia.
In any cases, there will always be a threat of a new business model appearing thanks to the entrance of a new competitor. This is why both Uber and Lyft can’t focus only on their expansion but also on the protection of their “realm”, and try to reduce the potential entries on their market.
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In my opinion, Uber has to review its strategy since the alliance because of course, it forms a new threat. Like mentioned, its competitors are forming an anti-Uber alliance, and this provides them a competitive advantage by sharing knowledge and best practices inter alia. Even if Uber is powerful in the market, such an alliance can quickly change that. Moreover, it can have impacts on it’s own market. Being aware of that, Uber decided to diversify their main activity ( in terms of services but also geographically) and trying to lessen the competition by operating on other parts of the market.
Some days ago, Uber decides to launch “UberMOTO” first in Bangkok and then in Bengalore. A new kind of service very adapted to the Asian market because of the difficulty to ride in a very congested city. “Motorcycles are part of the commuting culture in Thailand,” said Douglas Ma, Uber’s head of Asia expansion. “Uber’s goal is to provide safe, affordable, reliable transportation at the push of a button, everywhere for everyone.” (Business insider UK). However, it should be noted that this kind of “bike taxi” service already exist trough the services of GrabTaxi or Gojek and that even if Uber does make a move to counter the previously mentioned alliance, it faces other difficulties such as preferences of consumers and price and safety issues.
Because the Asian market seems quite crowded, Uber very recently announced expansion plans to Africa (Tanzania, Uganda and Ghana). Here the company face new challenges, like the problem of payment while bank accounts and credit cards aren’t the norm but cash is. An Uber account being normally linked to credit cards; Uber has to review this.
Other expansions have occurred in the US too, to maintain and reinforce their market share (Lyft increasingly becoming a strong competitor). “In an effort to encourage more people to use its ride-hailing app for their daily commute to work, Uber has expanded its carpooling service, UberPool, to three more cities in the San Francisco area: Oakland, Berkeley, and Alameda.” ( Fortune)
What concerns Latin America and Europe, Uber faces the everlasting problem of “anti-Uber alliances”. But here the alliance mostly concerns traditional cab, rather than direct competitors of Uber. Very recently there have been violent protests in Mexico, and very high fines in Columbia. This resistance and ongoing lawsuits put again a threat on Uber’s expansion strategy.
The previous examples show that the winner-takes-it-all is no longer the standard in this sector. Netwoks effects being important, they do not determine the outcome anymore. Lyft could successfully expand and “win” by attacking Uber on the lacunas of its own strategy, namely being (too much) focused on a head to head competition. Uber, being a pillar in the sharing economy, should understand that sharing isn’t only about services, but also about strategy. And this can be very useful in such a competitive and growing market.
http://fortune.com/2016/03/02/uber-carpooling-san-francisco/
Show lesshttp://www.ft.com/intl/cms/s/2/78f4783a-dab4-11e5-9ba8-3abc1e7247e4.html#axzz433XPaXPd
http://www.theverge.com/2016/2/24/11104394/uber-motorcycle-service-bangkok-ubermoto
http://economictimes.indiatimes.com/small-biz/startups/bike-service-ubermoto-to-debut-in-bengaluru-today-fares-as-low-as-rs-3/km/articleshow/51231622.cms
http://uk.businessinsider.com/uber-is-launching-a-motorbike-taxi-service-in-bangkok-ubermoto-thailand-2016-2
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Does the alliance pose a threat to Uber’s expansion strategy in the Asian market or even its position on the American market?
I think that the alliance doesn’t threaten that much Uber in USA. Uber is present in 150 big towns in USA (1) and his reputation is high in this country, even if he knows some troubles with some states, his situation is better than in Europe. Moreover, the alliance companies don’t have financial resources like Uber has.
Last year, the company has searched to raise his funds and collected $2,1 billion (2). These funds will serve to improve his services and working on new technologies for the car. This plan aims to expand activities in Asia. It will be difficult for the alliance to bring down the Uber leader in its own field, in USA.
It will be difficult for the alliance to bring down the Uber leader in its own field, in USA. But on Asian market, the story is different. The alliance has a advantage with the Didi Kuaidi (in China), Ola (in India) and Grad Taxi (in SouthEast Asia) because in Asia, the authorities prefer given the chance to the local firms than the international firms (3). Moreover, Lyft has the support of Alibaba, since the firms has invested $250 million in the ride-sharing app developer in 2014 (4). Also, the situation of Uber is not the same than in USA. He is present in only 22 cities in Asia, contrary to Ola who has present in 102 citites (5).
The second advantage of the alliance is the cross-app service. Thanks to this application, each company will handle her app for her country. The strategy is to keep their independence in their regions all in continuing to grow. The plan is not to merge but work together (6).
And what about other countries such as Latin America or Europe?
In Europe, the situation is not good for Uber. The company has a lot of troubles with the independent taxi in some countries in Europe. And this, because “its business model was incompatible with that market’s predominant government regulations and social norms” in this continent (7).In these conditions, the alliance has also few chances to take the market. The independents taxis in Europe have a strong culture and fight for their rights. If already, the leader Uber has difficult to penetrate the market, the “smaller” firms have not much more likely to succeed.
In Latin America, it’s totally different; Uber knows a success story like in USA. His “introduction in Bogota in November 2013, was the most successful first-year roll-out in the company’s history” (8). Uber offers safety in a country where the safety of taxis isn’t guaranteed. But here too, the competition is stiff. Some taxis companies have merged in Columbia (Esay Taxi and Tapsi) and Uber is far from being the market leader.
Could Uber adopt a similar strategy? And if so, would it be successful?
I don’t think that Uber could adopt the similar strategy, or so with a lot of difficulties. His name is too big and to many firms would take his place. It will be difficult for him to find some companies that would be ready to work with him because in general, they would fight against him and not with him.
But if we think well, that it will be a good advantage for a small startup to make alliance with Uber. The firm would attract the consumers of Uber in locations where Uber don’t have his place or in emerging market, or also in countries where Uber is not welcome. Moreover, the smaller firms could take the advantages of the Uber’s position and develop themselves faster.
(1) http://siliconvalley.blog.lemonde.fr/2015/07/06/aux-etats-unis-aussi-uber-fait-face-a-des-interdictions/
Show less(2) http://www.bloomberg.com/news/articles/2015-12-03/uber-raises-funding-at-62-5-valuation
(3) http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-partner-in-global-tech-service-alliance-to-rival-uber/
(4) http://www.bloomberg.com/news/2014-04-01/lyft-becomes-alibaba-s-latest-bet-on-silicon-valley.html
(5) http://qz.com/564795/a-new-anti-uber-alliance-strengthens-ola-lyft-didi-kuaidi-and-grabtaxi-agree-to-ride-together/
(6) http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-partner-in-global-tech-service-alliance-to-rival-uber/
(7) http://www.salon.com/2016/01/06/uber_fail_why_the_start_up_giant_stumbled_in_europe_and_how_it_could_happen_in_the_u_s/
(8) http://www.latimes.com/world/mexico-americas/la-fg-latin-america-ride-sharing-20151217-story.html
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Since its launching in 2009, Uber made a tremendous evolution to impose itself as one of the leader in the “sharing car” business. Thereby, new entrants spotted the possible business and joined the market, like Lyft did in 2012.
These companies can’t differentiate themselves in many aspects. As we can see (1;2), only few differences appear in the offers, for example Uber only accepts drivers older than 23 when Lyft accepts drivers from 21. Consequently, the reputation of such a firm is set to be its main asset to catch consumers.
By being the first –or one of the first- on the market of sharing car, Uber achieved to impose itself as the leader in many countries and invested huge amounts of money to stick to that position all across the world. Thus, new entrants such as Lyft, Ola cabs, Didi Dache… have to find new solutions to spread all around the world because they arrive too late and would waste their money trying to beat Uber and other existing companies already implanted.
On the one hand, by creating partnerships, they reduce the switching costs their consumers would face by travelling around the world and therefore maximize their number of users.
But on the other hand, these partnerships don’t ensure consumers to have the same exact service while using it in China or in the USA. Indeed, regular Lyft consumers will use Ola services in India. Even if they would use the same platform to find their cab, they will still face some switching costs as it isn’t the same provider of service. In comparison, Uber has the exact same offer whether you are in Asia, Europe or America.
To wrap things up, I would say that indeed these partnerships between incumbents is a threat to the expansion of Uber – as people using these services (Lyft, Ola…) would then be more inclined to use them abroad- but the worldwide reputation and structures of Uber is, and will always be, a huge competitive advantage, as consumers don’t face any (or at least very few) switching costs. Even if Uber may have to invest many in its own infrastructures, its reputations nearly ensures the company to have consumers ready to use its services.
To complete, I would say that Lyft would waste lots of money trying to adopt a similar strategy. Indeed, the company hasn’t a worldwide known reputation and trying to impose their services abroad would be too risky, as consumers wouldn’t have many incentives in using Lyft services whether than the leaders ’ones already in place.
(1) http://www.howtogeek.com/219126/uber-vs-lyft-what%E2%80%99s-the-difference-and-which-should-i-use/
Show less(2) https://www.thezebra.com/insurance-news/848/uber-vs-lyft/
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Is Uber model at risk going forward?
Having been for the last six years the reference company on the on-demand transportation services, the San-Francisco based Uber faces now dramatic changes in market as its major competitors organize themselves to put at least a hold if not a stop to the beautiful story.
As a customer one has probably to look at recent market development in a positive way as the emergence and the alliance formed by Uber’s main competitors in fast growing on-demand transportation markets (China, India and South-East Asia) will change the market dramatically. Not only will Lyft, Didi Kuadi, Ola or Grab Taxi compete on Uber’s market putting pressure on prices and quality of service. They also join forces geographically using innovative techniques as cross-app service enabling the customer to use his native local application when traveling abroad, using their language and currency and eliminating switching costs. By doing so the companies access new international customers, save development costs and increase quality of service. A major consequence of this new type of offer is that customers do not feel obliged to sign exclusivity contracts easily switching from one company to another as they cannot resist financial incentives. Not to mention additional advantages like sharing best practices.
The increasing number of competitors for Uber leads to a positive cross-side effect. Indeed Uber’s customers value the fact that there is more competition because they have the choice between more options and this competition engenders a decrease in the price of the service. The downtime for drivers decreases as well. Those kind of platforms can’t exist if there are no drivers. One group (Uber’s users) value more the interaction when the participation in the other group (the drivers) increases.
Increase driver loyalty will be the key of success. Current Uber’s competitors association may seem to offer a bright and safe future as intuitively one might think they will operate on their home markets and rely on their fellow associates to provide services abroad. However a successful company in a fast growing business will always want to extend its footprint internationally. That is where the danger arise for Uber’s competitors: they must avoid the balkanization of the markets and ultimately allow Uber to rely on its financial strength and organization to launch an extensive M&A program targeting financially sound actors that will be ready to sell their local business for a high multiple. The future will tell what strategy will ultimately pay-off.
http://siliconvalley.blog.lemonde.fr/2014/08/07/pourquoi-uber-et-lyft-lancent-la-bataille-du-covoiturage/
Show lesshttps://www.uber.com/our-story/
http://www.latimes.com/business/la-fi-the-download-uber-in-asia-20150728-story.html
http://knowledge.sunstone.in/uber-valuation-intuition-building-for-multi-sided-markets-with-network-effects/
http://openinnovationcentral.com/2014/03/04/uber-competitive-the-p2p-ridesharing-battle-is-heating-up/
https://www.linkedin.com/pulse/20140905024657-6170480-uber-how-network-effects-disrupt-transportation
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I don’t think it poses a threat for Uber on the American market because, Uber is the first mover and the leader on this market, and Lyft isn’t powerful enough to threaten Uber, even with an international partnership. For example, Lyft doesn’t have an app for Windows Phone while Uber does. Uber also offers different ride options to touch a maximum of people while Lyft only have 2 ride options. Those are two examples that shows that Uber try to satisfy better the customers and that shows why the company is the leader of the market in America.
In Europe and Latin America, I don’t think this partnership will pose a real threat because Uber technology is pretty well installed there and the partnership of Lyft, Didi Kuaidi, Ola and GrabTaxi doesn’t cover neither the European market nor the Latin Amercian one. In Europe, there are others company that lead the market but they are local ones and not international ones so, Europeans know that Uber is the international app to use when they want on-demand transportation services out of their country.
But, I think it will be really difficult for Uber to expand on the Asian market because there are some real competitors like Didi Kuaidi, Ola, Grab Taxi and SoftBank that are leader on their local market. The culture there is different and Asians are very reticent to American companies. Uber in Asia will work well with people from Europe or America travelling to Asia but it will be more difficult to be adopted by Asian people.
Finally, I think that the collaborative partnership of Lyft, Didi Kuaidi, Ola and GrabTaxi is very interesting and it’s really a good way for Lyft to stay on the market and compete with Uber. Lyft couldn’t go to the international market now because it’s too small, not enough powerful and not ready to compete internationally with Uber. But this alliance is a good way for the company to compete with Uber and for Lyft and the other companies to be known internationally.
http://www.cnet.com/how-to/uber-lyft-ride-share-ride-hailing/
Show lesshttp://www.lefigaro.fr/secteur/high-tech/2015/08/06/32001-20150806ARTFIG00011-didi-kuaidi-l-application-chinoise-qui-fait-trembler-uber.php
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Both Uber and the alliance between Lyft, Didi, Ola and GrabTaxi offer their service via a multi-sided platform in which there are intermediaries between the drivers and the passengers on peer-to-peer marketplaces. The new alliance is an ingenious idea in order to rival Uber which become more and more powerful on many ride-sharing markets.
Many advantages of this alliance were well noticed on the publication but others should also be pointed. Launching a product or a service abroad is not always easy, especially if the country has a different culture. (1) Indeed, it takes time, financial and human resources to understand the culture and to know exactly how to handle the market. The work of the marketer is then really crucial in order to succeed this entry (2). The advantage of this alliance is that the members don’t have to take time on it because they are not physically on the market and their partners can give them all information they want about it. On the opposite, Uber doesn’t benefit from this advantage. Moreover, people are often attracted by local brands because they easily trust them and they valuate the fact that they come from their country. (2) The alliance has this strong advantage. In fact, the clients will always use their local company platform even if they are elsewhere where the alliance is active. In addition, local brands pay usually more attention to their consumers and adapt more their products to their consumer’s needs which is well valuated by them (2). For instance, Ola offers drives in tuk-tuk and GrabTaxi proposes motorcycle-taxi. Tuk-tuk and motorcycle are both common means of transport in their respective countries. (3)
The alliance can also lead to a kind of network effect. Indeed, the application Lyft is compatible in more countries which enchants the users because they don’t have to move to another platform when they travel around the concerned countries.
The advantages I have just mentioned and the others noticed on the publication let think that the alliance has a nice future in the Asian countries. Uber has already met few difficulties to impose itself on these markets (4) and this alliance could strongly brake its development by powerfully improving the competition level. As known, “unity creates strength” and could overcome the giant who want to conquer the entire world. (5) Moreover, this alliance is active on roughly 700 towns which is more than the double of the Uber offer. (6)
Lyft, which is the biggest USA competitor of Uber, made a judicious choice by making this partnership with the Uber’s enemies, which are also leaders on their respective markets. It will be difficult for Uber to rival all these leaders who have a high knowledge of their market and additional forces with their partners. Indeed, this alliance can allow companies to learn from each other and then improve their skills to compete with their local and international competitors.
In addition, Asian governments throw a spanner in the works of Uber. For instance, the Chinese government encourage Didi Kuaidi by forbidding Uber to use Tencent which is used in China for online payments. (5)
Even if Uber faces some difficulties to impose itself on the Asian markets, he will not be pushed around. In fact, he adapts his strategy and could really get through the alliance. For instance, he developed the new concept of UberMOTO in Thailand and will launch it in many Asian countries. (7) Moreover, he invests a lot of money in Asia. With its power, Uber could perhaps foil, not easily, the alliance and impose itself as the leader in the further years. But only the future could answer to this question.
Even if the Asian travellers will probably use Lyft via their ride-sharing service company, I doubt that the position of Uber in the USA will change. Indeed, Uber is really well implanted and dominates the all market.
In Europe and in South America, it is not easy to impose itself on the market. Indeed, many laws regulations are against its practice and the taxi companies are not delighted with its presence in their field. (8) (9) In fact, they organized many manifestations against them because they consider Uber as illegal. (9) (10) For instance, the city council of Sao Paulo voted to ban Uber from his countries, as others countries made before. (11) In the view of the current situation, I suppose that Uber is not close to be the leader on the ride-sharing market in Europe and in South America.
Moreover, Uber’s competitors are present on the European and South American markets which are more privileged by the population. For instance Blablacar is really well widespread in Europe.
In order to improve again its situation, Lyft can extend its alliance with European and South American ride-sharing companies. The strong of this alliance could totally dethrone Uber. One common application in the entire world could be really attractive for the people who are used to travel. But spreading the alliance will take time and needs many resources which let the time to Uber to grow again.
The situation of ride-sharing depends on the future decisions and actions of the companies. Uber is really impressive but Lyft and its alliance could become very threatening for Uber. It is also interesting to notice that Lyft will improve again its situation with a new partnership with General Motors which is the giant of the automobile industry. (12)
1. http://www.lemonde.fr/entreprises/article/2015/09/17/creation-d-une-alliance-americano-chinoise-contre-uber_4760212_1656994.html
Show less2. Course “Maketing international” Isabelle Schuiling
3. http://www.lefigaro.fr/secteur/high-tech/2015/12/07/32001-20151207ARTFIG00303-une-alliance-mondiale-se-forme-pour-contrer-uber.php
4. http://qz.com/564795/a-new-anti-uber-alliance-strengthens-ola-lyft-didi-kuaidi-and-grabtaxi-agree-to-ride-together/
5. http://www.lefigaro.fr/secteur/high-tech/2015/09/17/32001-20150917ARTFIG00268-le-chinois-didi-kuaidi-s-associe-a-lyft-pour-combattre-uber-sur-ses-terres.php
6. http://www.lefigaro.fr/secteur/high-tech/2015/12/07/32001-20151207ARTFIG00303-une-alliance-mondiale-se-forme-pour-contrer-uber.php
7. http://www.lesechos.fr/industrie-services/tourisme-transport/021720289877-uber-mise-sur-la-moto-pour-accelerer-son-developpement-en-asie-1202602.php
8. http://fr.myeurop.info/2016/02/02/en-europe-uber-a-perdu-des-batailles-pas-la-guerre-14476
9. http://www.lefigaro.fr/flash-eco/2015/06/23/97002-20150623FILWWW00018-amerique-latine-manifestations-contre-uber.php
10. http://www.ledevoir.com/international/europe/462908/transport-uber-n-est-pas-le-bienvenu-en-europe
11. http://www.huffingtonpost.com/2015/07/01/sao-paulo-uber_n_7704674.html
12. http://www.lecho.be/actualite/archive/GM_investit_500_millions_dans_Lyft_l_ennemi_jure_d_Uber.9716715-1802.art?ckc=1&ts=1457821759
Very informative comment, thanks.
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Uber is the taxi-hailing leader and hold the pole position in America. However, a partnership between Uber rivals is forming. Indeed the second performer in America, Lyft, is forming a alliance with compagnies that have a foothold in Asian countries.
According to a CNBC’s article, Lyft will be able thanks to this collaboration to leverage Uber’s technology, local market knowledge and business resources.
In my opinion, Lyft could operate a successful partnership in order to fight off Uber. On one hand I think that Lyft will gain time and essential knowledge to successfully set up shop in Asia. On the other hand I think that Uber is risking to waste time and money in a market hardly reachable.
The strong argument is that such a setting up requires local knowledge that companies such as “GrabTaxi”, “Ola” and “Didi Kuaidi” can provide.
I am strongly convinced that this alliance is definitevely a concern for Uber. It seems that getting foothold in America and Asia could help travelers to book rides from each other’s apps. It means a greater accessibility for the users. This alliance could also allow Lyft to grow and reach a higher level of performance, which could take Uber’s market share in America.
It seems that this alliance provide vital resources to Lyft. Without such resources, I don’t think that Lyft could be in competition with Uber that is the leader. Thanks to this collaboration, it appears to me that Lyft is playing an interesting move and could compete with Uber.
As it is explained is the article “Taking on Uber”, Uber is two-sided platform where users can easily switch from one platform to another because there are no financial contracts behind. It is clear that the collaboration is therefore a smart move because Lyft doesn’t have to fight against local companies in Asia while Uber does…
Then it is clear that Uber is trying to get foothold in Europe but the company is striking against laws and harder reglementation. I don’t think that’s a cultural question here but taxi companies are really trying to slow down the development of Uber.
For instance, if we look at particular countries such as France where strikes are setting up in order to protest against Uber’s drivers that “steal” their clients. In Germany or Spain, there are new restrictions to respect or the service “Uberpop” is forbidden.
In conclusion, it is absolutely sure that this collaboration is a real concern for Uber but the two expansion strategies are very different and Uber is investing heavily to gain international market shares while Lyft is partening and sharing different resources such as local market knowledge, which is the most important to succeed such a establishment in Asia.
Sources :
http://www.cnbc.com/2015/12/03/uber-rivals-didi-kuaidi-grabtaxi-lyft-ola-form-alliance-covering-half-of-worlds-population.html
Show lesshttps://www.ipdigit.eu/2015/12/taking-on-uber/
http://money.cnn.com/2015/09/30/news/companies/uber-in-trouble-london-paris-amsterdam/
http://www.nytimes.com/2016/01/04/technology/ubers-no-holds-barred-expansion-strategy-fizzles-in-germany.html
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