22 Aug Uber’s Global Challenge
Uber, well-known for its aggressive marketing worldwide, has recently retreated from their global vision after battling with local competitors:
- In China: Uber sold its holdings to competitor Didi Chuxing after a long marketing battle with them; and
- In Russia: Uber scaled back operations and holds a minority stake in a new partnership with Yandex, Russia’s answer to Google.
This trend suggests Uber is being pushed out of emerging economies such as China and Russia due to a number of factors:
- Lack of cultural insight and local expertise
- Inability to infiltrate pre-existing competitors
- Governments hostile to U.S. business; and
- Consumer preference for ‘home grown’ companies.
Uber has also been aggressively marketing in India, stating that “India is a global priority market [for us] and our second-largest after the U.S. in terms of [total] trips.” The way that Uber operates in India is a bit different than how it operates in the U.S.—i.e., transactions can be cash-based, cars are typically owned by a transportation contractor and drivers work full-time.
Will Uber stay competitive with its India competitor Ola? Uber has been slow to assimilate within India’s transport industry and unable to penetrate key cities as quickly. Ola’s auto-rickshaw service is a trusted brand within the market due to its availability and reliability.
In India recently both Ola and Uber reduced incentives for drivers. The result was many drivers going on strike. Going forward a viable option may be for Ola to purchase Uber’s local market share enabling reduced operating cost and an increased price point for the combined entity.
Uber in India is fundamentally different from Uber in the West