Earlier this week DiDi Chuxing and SoftBank plowed $2 billion into Grab, the largest ride-hailing company in Southeast Asia, valuing it at around $6bn. “Markets everywhere are still at infancy stage with huge room for growth; we expect to see some lively partnerships and competitions,” a DiDi spokesperson told Red Herring.
Cue a host of editorials announcing another nail in the coffin of Uber, the market’s behemoth, which you could be forgiven for thinking is on the verge of collapse, such has been the slew of bad news about the San Francisco-headquartered firm.
Uber recently pulled out of Russia and China, two of ride-hailing’s key growth markets. And the company’s driver mistreatment, PR missteps and sexual harassment culture–which culminated last month in the ouster of former CEO Travis Kalanick.
But those writing the company’s obituaries are premature. Uber is flawed, but it is a goliath: nothing in modern business history comes close to the way it has risen, nor the ferocity at which it has burned through investment cash.
Uber lost $2.8bn last year. But gross bookings doubled and growth is outpacing loss. In a defiant and unnecessary move the privately-owned company released financials this year that prove it is on a steep, upward trajectory. It is now valued at around $69bn.
Do not expect that figure to drop in the near future. A shift to a multi-passenger model will reap bigger margins. Despite have rolled through a staggering $8bn since it was founded in 2009, Uber claims to have $7bn cash on hand, and $2.3bn in credit.
That will allow it to continue adding locations at a frantic pace–despite the groundswell of regulatory and taxi-led opposition in major cities across Europe and elsewhere. Uber has performed well in India, for example, and is present in 29 cities.
The company now holds 50% of the $10bn-valued–and sharply growing–Indian market, with Ola Cabs bringing home 44% of the remainder. Narendra Modi’s government looks set to enter the fray with its own ride-hailing app. But for now, Uber is winning on the subcontinent.
Lyft has emerged as Uber’s closest competitor in the United States. The San Francisco neighbor pounced on Uber’s 2017 troubles to win custom as an ethical alternative. Lyft is growing faster than Uber. But its bookings are worth just an eighth of its foe. And despite a recent drop in US market share due to Uber’s boardroom debacles, Uber still commands 77% of the American ride-hailing sector.
Kalanick’s departure, and a far-too-late-but-perhaps-just-in-time ‘180 Days of Change’ campaign by Uber, should counter the swing towards Lyft. Reforms include a driver hotline, and $15 charge for customers to retrieve lost items.
That will help stymie the tide of opprobrium coming Uber’s way. The company is set to name a new CEO in September, with HPE’s Meg Whitman said to be on the shortlist. The quicker it can pivot from Kalanick’s toxic bro culture, the quicker Uber will shed the well-deserved image of meanness it has acquired of late.
Then, the flurry of anti-Uber articles will begin to decrease. And as the cloud around the company dissipates, people will begin to realize that, far from having squandered its place as the world’s number-one ride-hailing brand, Uber will still be on top–and making money.