Tuesday, August 2, 2016

Mergers of taxi-hailing services in Europe, and China

Europe is preparing to defend itself against Uber. Bloomberg has the story:
Daimler Targets Uber by Merging Mytaxi With U.K.’s Hailo

"Daimler AG will challenge Uber Technologies Inc.’s ride-hailing dominance by merging its Mytaxi unit with one of the U.K.’s most popular cab-calling services, Hailo, to create Europe’s biggest taxi app.
The combined company will operate under the Mytaxi brand, with 100,000 registered drivers in more than 50 cities across nine countries, and be headquartered in Hamburg, the companies announced
"Car manufacturers have been investing heavily in apps to keep pace with changing consumer habits that have seen ride-sharing companies such as Uber and Lyft Inc. proliferate. General Motors Co. has invested $500 million in Lyft, Volkswagen AG put $300 million into Israel-based Gett Inc., and Toyota Motor Corp. backed Uber for an undisclosed amount. Uber has raised at least $12.5 billion in funding to date.
Daimler, the maker of Mercedes-Benz cars, also owns the Car2Go car-sharing service and purchased Mytaxi in September 2014. It bought U.S. ride-booking service RideScout LLC at the same time. "

China appears to have been too much for Uber to swallow. The NY Times has the story: Uber to Sell to Rival Didi Chuxing and Create New Business in China

"In a stark signal of how difficult it is for American technology companies to thrive in China, Uber China said it was selling itself to Didi Chuxing, its fiercest rival there.
The sale, which would create a new company worth about $35 billion, would end the great ride-hailing battle of China. A person with knowledge of the deal said Uber investors had been pushing for such a transaction.
The companies have been fighting relentlessly for market share in mainland China for two years, spending tens of millions of dollars every month to attract riders and drivers. The merger would end that competition and create significant scale, but it would also be a repudiation of Uber’s ambitions to take on local Chinese competitors in their huge home market."
and this:
"...Mr. Kalanick helped Uber overcome the biggest obstacle in China: the Communist Party. By traveling frequently to China, meeting with officials and speaking in language often used by party cadres, Mr. Kalanick helped the company avoid the regulatory tripwire that has led many companies to stumble in the market. Last week, Chinese officials said ride-hailing apps were legal and laid out a framework to license drivers.
"But entry is just the first obstacle to the Chinese internet market. Competition is fierce, and the focus is less on the product than on big spending to lure customers or on tricks to harm competitors. Fraudsters and opportunists also abound.
"Uber’s engineers, operating from San Francisco, had to deal with drivers who simulated or faked rides to get commissions. At the same time, the company was blocked from marketing on China’s biggest social network, WeChat, because the internet giant Tencent was an early investor in Didi. All of that made it much harder to compete with a company that already had an advantage in scale, not to mention the backing of Tencent, Alibaba and Apple. When it raised $7 billion in June, Didi made it clear it was willing to continue the fight for a long time."

No comments: