MUMBAI, India (AP) — Riding on its startup success and
flush with fresh capital, taxi-hailing smartphone app Uber is making a
big push into Asia. There’s a twist, though: Instead of being the
game-changing phenomena it was in the U.S., Uber faces a slew of
competitors using similar technology.
The concept Uber helped
pioneer just four years ago has transformed some markets before it even
had a chance to enter them. Homegrown taxi apps are already slogging it
out for dominance in numerous Asian countries.
China has a
taxi-hailing app called Kuadi that says it logs more than 6 million
transactions per day. Malaysia-based GrabTaxi operates in five Southeast
Asian countries and recently announced more than $10 million in new
investment. India has two competing taxi-app companies, Meru Cabs and
The proliferation of taxi apps means that Uber, which
raised $258 million in venture capital last year, much of it from Google
Ventures, must distinguish itself from local companies as well as
international challengers including Easy Taxi and Lyft. This month, Lyft
got a $250 million cash infusion from investors including Chinese
e-commerce giant Alibaba.
"We have to build our brand up from scratch in a lot of these places," said Sam Gellman, who is
heading Uber’s Asian expansion.
compete against local lookalikes, Uber said it is taking a two-prong
strategy. First, partner with local players who can tailor their
business to demand, whether for fast no-frills rides or luxury cars on
Second, target Asia’s upwardly mobile business travelers who will
appreciate having one service they can use in dozens of cities
The company has in the last year started operating in
18 cities in Asia, Australia and New Zealand including Seoul, Shanghai,
Bangkok, Hong Kong and five Indian cities.
Uber uses a free
GPS-enabled app for customers to use their phones to summon rides,
usually from a private car company instead of an ordinary licensed cab
and promising a quicker response time that is often within 10 minutes.
Drivers respond using their own Uber-provided smartphones mounted on the
dashboard and follow the map to an exact location.
In the U.S.
and Europe, Uber has variously drawn acclaim by urban customers tired of
difficulty finding cabs and protests by taxi companies accusing it of
running unlicensed taxi services. Just last month, an organization
representing Seattle-area taxi drivers sued Uber, alleging it is
involved in "unlawful and deceptive business practices."
woes, though, are less of a problem in Asia than lookalike local
competitors. The business models of Asian rivals vary: some run their
own fleets, others depend on advertising, while Uber makes commissions
on fares, but all employ distinctly Uber-like smartphone apps.
Kuaidi says its app is used 6.2 million times a day and makes 10
million yuan ($1.6 million) in revenue each month through advertising by
linking customers to regular taxis.
Cai Jing, 29, a Shanghai-based purchaser for a food company, uses Chinese taxi apps a few times a week.
"They’re way more effective at getting me a taxi than just waiting on the street," said Cai,
who hadn’t heard of Uber.
market Uber sees huge potential in particular is India, with its vast
population of 1.2 billion. In the last year, Uber has launched in
Mumbai, Bangalore, New Delhi, Chennai and Hyderabad. That’s more cities
than in any other country except the United States.
Jambu Palaniappan said the market is one of the fastest-growing he has
seen. The company declined to give specific figures.
for rapid growth in India is pent-up demand. In Mumbai, for instance,
its distinctive black-and-yellow licensed cabs number just 42,000,
inadequate for a city of 22 million. Plus, most licensed taxis are
banned from having air conditioning under an archaic municipal rule,
leaving passengers suffering with rolled-down windows in suffocating
heat and noxious pollution. The city does allow air-conditioned "radio
taxis," but getting one can take an hour or more.
Uber driver Dinish Karamsesula, whose employer partnered with the
company in Mumbai, said he’s busier since getting the smartphone mounted
on his black SUV, usually only rented out by the day. He now makes
several short trips a day.
"I’m on salary so I don’t get the
profits," he said. "But sometimes the customers are so happy with the
car being cool and clean, they give me tips," he said, driving past
weaving motorbikes, ancient Premier Padmini cabs, the occasional
wandering cow and a bicycle loaded with sacks of rice.
Still, Uber’s Indian taxi-app rivals, both of which operate their own fleets, say they have little fear
of the competition.
"We have a very strong understanding of what the Indian customer wants and needs," Ola Cabs
spokesman Anand Subramanian said.
He said Ola operates on a cash basis while Uber only works with credit cards, which only a miniscule
percentage of Indians have.
regional competitors focus on price. Anthony Tan, who founded GrabTaxi
in 2012, said the company’s rides are often half of what Uber costs.
are very much focused on the mass market. People going to work and
school, visiting their grandmothers in the hospital," Tan said.
Uber, however, is undeterred
you are successful, you are going to have clones and copycats," said
Palaniappan. "The more options the customer has, the better. It forces
us to be better and more relevant, too."
Press researcher Fu Ting in Shanghai, AP Business Writer Kelvin Chan in
Hong Kong and AP writer Thanyarat Doksone contributed to this report.
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