Ola invades Australia, Takes on Uber

(Preet) #1

Ever since SoftBank invested in Uber, Uber’s presence in Asia has been diminished and is continuing to shrink. The latest development is Ola’s expansion into Australia. Uber and Ola both fight for the Indian market, now Ola, the Indian company has taken the fight into one of Uber’s main markets, Australia.

Ola’s co-founder and CEO Bhavish Aggarwal told the media in Australia that “We are very excited about launching Ola in Australia and see immense potential for the ride-sharing ecosystem which embraces new technology and innovation.” This, of course, comes to no surprise to most of the rideshare drivers in Australia, since they are mainly Indian.

Ola intends to bolster their presence by “stealing” Indian drivers from Uber as well as helping more Indian’s seeking employment in Australia with preferential employment treatment. This will speed up Ola’s expansion as well as preserve their Indian based corporate culture.

It does not come to us as a surprise, this new venture into Australia by Ola is part of SoftBank’s global vision where they are compartmentalizing rideshare companies to specific areas, capitalizing in local expansion and saturation to cut out non-SoftBank companies and making Uber, Ola, Didi and Grab the global giants, dividing the world into four segments.

Ola claims to make a billion rides annually in India, with over 125 million users in over 100 cities. Their main issue with their home market is revenue. The average taxi fare is low, making income from Ola cars extremely low when compared to other markets. This is why Ola has to strengthen its income through foreign markets with stronger currencies. Australia is a classic market for Ola to compete and gives it another large presence in Asia.

Even though SoftBank is a partner in both companies, it does not make both companies partners to each other. Uber has to continue increasing its sources of revenue to build up a strong profile before their IPO next year. However, Uber’s presence in Australia was hit by its actions in London, where Uber was ordered to remove its operations from the UK capital. Australia Northern Territory has also demanded that Uber removed their presence and banned them from operating. In another instance in Australia, Uber lost in court over the goods and services tax (GST) tax that their drivers must pay.

Nigam stated that with all of Uber’s problems and loss of their Chinese and Russian markets, what they have done is set the tone for the new ridesharing ecosystem. Allowing local competitors to enter when a vacuum is set. In both cases, Uber did not leave empty handed and retained a percentage of the market through their holdings in Russia (Yandex) and China (Didi).

The advantage Ola has over a local rideshare company is their cultural link with the majority of the rideshare and taxi drivers in Australia. This will be used to leverage a market takeover by Ola over Uber.

An Uber Update from Australia
(Andrew Martin) #2

I think that everyone is missing the real issue; here it is:
1.Uber, Didi, Ola, Taxify, Lyft and Grab control the current global rideshare market. These companies originate from Ola is in India, Grab Singapore, Didi China, Taxify Estoni, Lyft and Uber in the US. Behind all but two sits Softbank. Taxify and Lyft are Softbank free (so far) and this is mainly due to Softbanks investment in Uber (so it doesn’t need another US company) and in Europe and the Middle East, Taxify is taking a good share. However, what is really going on here? Softbank has covered 90% of the global market by buying into 4 companies.
2. Softbank also invested heavily in AV technology, which means it intends to be a main player in the global transportation network that is developing as we live now.
Softbank is investing in the present with rideshare companies and investing in the future with AV technology. It is covering all its bases and is set to become a 10% holder of 100% of the global transportation market as it unfolds.
Uber and Ola might be competing in the front, but in reality, Softbank is dictating where wars will be held and who will win them. In other words, the rideshare industry is more like the WWF, where wrestlers compete in show fights, there is danger, there is blood, but it is all orchestrated.

(Steve Mann) #3

Hey Andrew, you are missing the issue of the article, its about Ola and Indian drivers in Australia. What has AV and Softbank got to do with Ola trying to cash in on their marketing advantage. I guess Didi might try the same thing in the US with the Chinese community.

(Andrew Martin) #4

Hi Steve, I know that, but the real issue is not Indians, not Ola and not even Uber. Its the emergence of AV technology.

(Steve Mann) #5

Hey Andrew, check this out, Grab is going to steal Uber’s market in Asia, and Uber will be left holding the US. They are already being kicked in the balls in London and the EU has classified ridesharing as a taxi service. Its not about AVs yet, its about who wins the rideshare wars? Will it be the five-six major corps we know of today or will it be the rise of newbies, such as Yandex in Russia and GoJeck in Indonesia? Didi is coming along strong buying up Latin & South America, Lyft is starting to test out Canada and has increased its hold in the US. While AV might seem important, I don’t think that’s the issue right now . In my opinion its about who survives the next 5 years, after that we can chat about AV tech.

(Andrew Martin) #6

I agree with you, in that it is about the changing market relations between all the major players. So far we have Uber, Didi, Grab, Ola and Lyft. There is that emerging GoJeck and Yandex issue and Taxify is still a contender. The rideshare market is far from settled. Add to this the Softbank issue, and I foresee that the world will be divided as you think so, how it will be done, I don’t know. Also, add to this the emerging basket of gig support apps, which created a completely new market for e-payments and e-services, as well as opening up transportation services for freight, bikes and possibly flights and ferries. What we are seeing is a major change in the worlds economy in similar vein to what happened when the steam engine was invented and how that affected the iron industry as well as transportation. The railway and steamboats emerged from this invention, and the changes are similar to what happened with the mergence of the internet and smartphones.