The ride-hailing app steamrolled America, but the easy-win days are over. Its path to global conquest now has to go through well-financed and battle-hardened rivals that have seen Uber coming—and know how to beat it
Uber’s top priority in China, as in any new country, is wooing drivers. Both Uber and Didi have turned driver subsidies into blood sport, often paying them two or three times the fare. Drivers have figured out how to scam the system. In one scheme they buy phones that are hacked to have multiple phone numbers, which allows a driver to “ping” himself from a passenger account, hop in a car and collect the bonus. Uber has said its fake-ride rate is around 3 percent, but local media estimate the fraud rate at 30 percent to 40 percent. Didi says it has “almost no” fake orders. A Guangzhou driver named Liang said that Didi is stricter about banning drivers it suspects of fraud. Uber, he said, started cracking down in the last month.
Didi is focussed now on tearing pages from Uber’s playbook. It started out in taxis, but now its private-car service makes up around half of its trips after debuting less than a year ago. Didi is testing a carpooling service called Hitch, a bus line and on-demand designated drivers. CEO Cheng is confident his company can keep Uber at bay. “China’s internet competition is the most intense in the world,” he says, “and Didi Kuaidi is the winner that survived.”
After China and the US, India is the market Uber lusts after most. The cab wars there are in their early days—some 97 percent of Indians don’t even own cars. But to see what Uber is up against, just stand on a busy corner in the sultry coastal city of Chennai and count the number of OlaCabs that pass by. With a three-year head start, Ola has outrun Uber from the get-go. It says it has 80 percent of the market, is growing 30 percent to 40 percent month over month and provides some 750,000 rides per day in 250,000 vehicles, including private sedans, hatchbacks and three-wheeled tuktuks. Uber claims it gets 200,000 rides a day but says it is also growing 40 percent and has 35 percent market share. Ola got a lot bigger in March, paying $200 million for rival TaxiForSure. Ola raised $400 million in April at a rumoured $2.5 billion valuation.
(This story appears in the 16 October, 2015 issue of Forbes India. To visit our Archives, click here.)