Tag Archives: Ride-sharing

The future of mobility

Commentary
The recent partnership between Apple and Didi Chuxing underscores the changing market dynamics in today’s auto industry. Consumers have started to shift from traditional car ownership to ride sharing, while tech companies are investing heavily in autonomous driving technologies in the hopes to make the roads safer and traveling more convenient. It’s a combination of these trends that has created a market conducive for partnerships and investments. In addition to Apple’s investment in Didi, other companies have recently partnered up, either to take on Uber or to explore the possibilities of autonomous cars. General Motors invested in Lyft, who has teamed up with Didi, Ola and Grab. Google has partnered with Fiat Chrysler Automobiles. The Chinese rivals Alibaba and Tencent have both invested in Didi. In short, this market consists of many alliances and these partnerships will surely unlock new transportation experiences for consumers.

Can Uber succeed in China?

Commentary
The rivalry is definitely heating up. Just as Uber raised $1.2 billion for its Chinese operations, its domestic rival Didi Kuaidi is set to raise $3 billion through its latest fundraising round. Both companies are keen on dominating China’s Internet-linked transport market and both are backed by powerful investors. Uber has the support of China’s Internet giant Baidu, while Didi Kuaidi is backed by Alibaba, Tencent as well as sovereign wealth fund, China Investment Corporation (CIC). At first glance, it seems Didi Kuaidi already has the upper hand, being a local player and enjoying the support of the Chinese government through CIC. Uber, on the other hand, is not about to play second fiddle. The company announced that it’s building a strong local team so it can assimilate culturally and administratively into China. It also claims it has a market share of 30% to 35%, a significant growth from 1% at the beginning of 2015. Now the question in everyone’s mind is, can Uber dominate the Chinese market? After all, the Chinese government has always favored local startups to foreign companies and there’s a chance that Uber will eventually be muscled out by its local competitor, just like what happened to eBay and Yahoo, which both failed to gain traction in China.

Rakuten invests in Lyft

Commentary
Uber is considered as the cream of the crop among investors’ portfolios and the company has pretty much snagged the biggest tech funding deals in history. Since many major investors have already funded Uber, it seems that Lyft’s options for investors have become quite limited. One of the companies that came to Lyft’s aid is Japan’s biggest ecommerce company, Rakuten. Although majority of its investments and acquisitions have traditionally been in the ecommerce space, Rakuten paid $300 million for an 11.9% stake in the ride-sharing pioneer. New investor Fortress Investment Group was also involved in the fundraising round. The new investment values Lyft at $2.5 billion and brings its total funding to more than $850 million. Although Lyft’s valuation is way behind Uber’s $40 billion, the company has been growing 500% per year in both number of rides and revenue, according to its president John Zimmer. Now the big question is, after Rakuten, can Lyft attract other major investors to boost its fundraising so it can finally go head-to-head with Uber?

Unstoppable Uber

Commentary
Despite being accused of sexism and using underhanded tactics against its rivals and critics, Uber is still on a bullish streak. In early December, it raised $1.2 billion, which valued the company at $40 billion, making it one of the world’s most valuable technology startups. In the same month, it also received $600 million from Baidu and closed $1.6 billion in convertible debt from Goldman Sachs. To top that off, Uber recently raised another $1 billion, bringing its total Series E to $2.8 billion. So why is Uber stirring up so much interest from investors? According to news reports, Uber has been telling potential investors that it expects a gross revenue run rate of around $10 billion in 2015 or more than double its 2014 projected revenue of $4 billion. With 300% gross revenue growth last year, the company expects another 300% this year, making its projected $10 billion gross revenue a very real possibility.