Uber, Didi, Ola, GrabTaxi, Lyft – Ride-Sharing Apps Bulk Up

Ridesharing1There’s more than meets the eye in a unique new alliance among four of Uber’s biggest rivals: China’s Didi Kuaidi, India’s Ola, Singapore’s GrabTaxi (all backed by Softbank) and Lyft in the U.S., financed by Alibaba and recently, Didi as well. The recent moves of these dominant regional players shows the high stakes in personal transport apps and the race to outdo global giant Uber.

These four regional players are launching a global rideshare partnership, with joint products planned for a roll-out beginning early in 2016. Collectively, these four companies cover nearly half the world’s population and have raised $7 billion, presenting a formidable front against Uber. The coalition escalates what was previously a battle between a global entity and its local rivals.

The agreement calls for the four companies to remain as separate businesses but to share technology, local market knowledge and resources. Customers of the four apps in their domestic markets will be able to use the same app to order rides in foreign markets when traveling throughout China, India, Southeast Asia and the U.S.

The deal underscores the power of rival Uber – now present in 67 countries and growing quickly, with $8 billion in capital and another $2.1 billion in a round that could reach a valuation of $62.5 billion. Uber is profitable in over 80 cities worldwide, and CEO Travis Kalanick has indicated that he expects to spend $1 billion in China, the home turf of Didi Kuaidi. Additionally, Uber is speeding up global expansion and branching into services such as urban food and package delivery, and even self-driving cars.

What are the differentiators of these contenders? Global giant Uber claims a lead in product innovation and user experience, while the regionally focused Didi Kuaidi, Ola, GrabTaxi and Lyft claim to be creating a more user-friendly, localized service for customers traveling between markets, betting on their local expertise and combined resources.

A common thread among the regionally focused companies is Japan’s active startup investor SoftBank, which has invested $600 million in Didi Kuaidi, $210 million in Ola and $250 million in GrabTaxi. Softbank is also indirectly in Lyft, through Alibaba and its $250 million funding for Lyft in 2014. In a foreshadowing of the global alliance, Didi previously invested in Ola, GrabTaxi and Lyft.

Meanwhile emerging markets investor Tiger Global has gained heat for being one of the lead investors in Uber’s upcoming $2.1 billion round along with T. Rowe Price. Participating investors have criticized Tiger Global for funding a “direct competitor” to its existing portfolio companies: Didi Kuaidi, GrabTaxi and Ola. Tiger Global was involved in a $500 million deal for Ola as recently as September.

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