Uber has been the world’s largest ride-hailing company and among the top valued startups globally but it may not be able to compete ahead successfully against its current and future competitors, it said in the IPO filing recently to list on the New York Stock Exchange. Globally, Uber competes with Ola, Lyft, Careem, Didi Chuxing etc., in the personal mobility space while in food delivery, Uber Eats competes with Zomato, GrubHub, DoorDash, Swiggy, Delivery Hero; and in freight offering it competes with CH Robinson, DHL, Total Quality Logistics, XPO Logistics etc.
Uber said that the markets it operates in including India are highly fragmented even as it faces competition across its three offerings.
Consumers generally look for “lowest-cost or highest-quality provider” while on the business side, drivers have a “propensity to shift to the platform with the highest earnings potential” and restaurants switch to the delivery platform that offers the “lowest service fee for their meals and provides the highest volume of orders,” Uber said in its filing seen by the Financial Express Online.
The company claimed of its competitors in countries like India to have an advantage over Uber in terms of greater brand recognition, longer operating period, larger marketing budgets, localized knowledge, and more supportive regulatory regimes.
“In India, for example, our Uber Eats offering competes with Swiggy and Zomato, each of which has substantial market-specific knowledge and established relationships with local restaurants, affording them significant product advantages,” Uber said.
Hence, such competitors may be better positioned to take on opportunities, technologies, consumer preferences, regulations etc., which may render Uber’s products or offerings less attractive.
Uber said that to remain competitive across these markets, it may continue to lower its fares or service fees as it has in the past along with better discounts and driver incentives.
Such a move, Uber said still cannot guarantee success. “Driver incentives, consumer discounts, promotions, and reductions in fares and our service fee have negatively affected, and will continue to negatively affect our financial performance,” the filing said.
Uber recorded net income of $997 million and EBITDA loss of $1.85 billion in 2018. The company is looking at $100-billion valuation for IPO.