The coronavirus pandemic has apparently helped U.S. ridesharing giant Uber cement its hold in the Australian market as its mixed-up rivals – Ola and Didi – stay afloat.
Due to the restrictions that COVID-19 is said to contain and are leading to a sharp decline in ride-sharing, all operators have had to tighten their belts. While Uber has dug into its deep pockets worth $ 93 billion ($ 125 billion), Indian rival Ola has drastically reduced its footprint in Australia and China’s DiDi has offered significant discounts.
Another Uber rival Bolt, formerly known as Taxify, has already quit in Australia and left the market in April.
Ride-share business Ola has laid off the majority of its employees in Australia. Photo credit: Ryan Stuart
The dramatic change in Ola’s fortune that closed local driver officers and laid off most of its employees has now raised fears that the company could exit the Australian market entirely as well.
Dan Jordan, DiDi spokesman, says Ola’s cuts « weren’t exactly surprising » as COVID-19 lockdowns put additional pressure on operators in an already highly competitive market for ridesharing.
« There have been three main players in the market and it’s a very competitive industry. I think we’ve seen since we expanded our product pretty aggressively in 2020 that we haven’t necessarily expanded the industry, but we’ve certainly taken some rides from competitors, « he says.
DiDi reduced its commission for drivers during the lockdown to just 5 percent compared to Uber’s commission of up to 27 percent. 5 percent and expanded from seven cities in Australia to 28 cities to gain market share.
Jordan warns, however, that Ola’s possible exit increases the risk that the incumbent Uber will establish a ridesharing monopoly in Australia.
« The most important element is that we really want to make sure that there is strong competition in the ridesharing sector in Australia, » he says. « And I think if there is one player leaving the market, it is very important that there are still at least two players to ensure a healthy ridesharing industry. «
The ridesharing giants have battled for supremacy in various markets around the world. Uber sold its Chinese operations to DiDi in 2016 after competing unsuccessfully in the country for three years and exiting Southeast Asia in 2018 after investing in a competitor in Griffin.
Ola, valued at over $ 6 billion ($ 8). 1 billion) prior to the outbreak of the coronavirus pandemic, which landed in Australia in 2018 and has committed to operating in the market, albeit with a smaller team.
Neither Ola nor DiDi, however, have the diverse portfolio of services that Uber made good use of during the pandemic. While all three operators have switched to parcel delivery services – Uber Connect, DiDi Delivery, and Olas contactless deliveries – Uber has had the benefit of using its grocery delivery business Uber Eats to support its rideshare business.
The tech giant reported global sales of $ 3 last month. 1 billion and while the contribution from ridesharing decreased 50 percent, revenue from food delivery rose 135 percent.
An Uber spokesperson also pointed to Uber’s diversification with the recent launches of Uber Connect delivery service, Uber Rent car rental service, and Uber Pet pet transportation service.
« We have set the bar for ridesharing since Uber launched in 2012 and will continue to do so, » said the spokesman.
Phil Lyons, founder of the ridesharing comparison app, Best Rides, says while the pandemic caused an estimated 50 percent drop in ridesharing in Australia, demand returned with the end of the lockdowns.
« Nobody went to the airport, nobody went from business meeting to business meeting, » he says. « What we are seeing now is a slight resurgence in ridesharing, especially among people who are currently concerned about using public transport. Ride-share companies place great value on safety and cleanliness. «
As Australian consumer transportation habits return to pre-COVID levels, users could see fewer rides in the New Year.
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Cara is the small business editor for The Age and The Sydney Morning Herald in Melbourne
Uber Technologies Inc. , Ola Cabs
World news – AU – COVID pressure is helping Uber get a better handle on local carpooling
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