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Outside U.S., Uber Losing to Locals

Source: 7Park Data

It’s no secret that Uber trails ride-sharing rivals throughout Asia. New data shows that Uber is also behind local competitors in Latin America, China and eastern Europe as well.

Uber may have an edge in English-speaking nations, however. The data shows it to be ahead in the United Kingdom and Australia.

The Takeaway
Data from nearly two million smartphones outside the U.S. show Uber is trailing local rivals in key markets like China, India and Russia. Now, the question is what being No. 2 means for Uber’s long-term prospects.

That’s the picture from data taken from nearly two million Android smartphones in more than a dozen countries, including Russia, Brazil, Peru, Greece and China, showing how frequently people there used certain taxi or ride-sharing apps over the past 18 month

More often than not, local or regional rivals like Didi Kuaidi (China), Ola Cabs (India), GrabTaxi (southeast Asia) and Gett (Israel) accrued a large lead over Uber, in terms of the percentage of people who used the services at least once a month, according to the data, collected by research firm 7Park Data. The data hew closely to the findings from another, larger-scale survey from this summer, which focused on India and southeast Asia.

“The fact is that local companies continue to lead key markets,” says Shahar Waiser, CEO of Israel-based Gett, which leads Uber by a factor of 10 in that country, in terms of monthly active users, according to the data.

To be sure, it’s still early in the ride-hailing revolution and even incumbents have relatively low market penetration in most markets globally. But the trend lines indicate that incumbents are growing almost as quickly as Uber. In other words, Uber doesn’t appear to be closing the gap, with the exception of Colombia and, to some extent, in China, where its spending on promotions for drivers has gone through the roof.

The are several reasons behind this pattern that go beyond the “first-mover advantage” for incumbents in each country—namely, that local firms can cater to the needs of local customers more easily and much faster. Only recently, for instance, did Uber start to give riders the ability to pay with cash in places like India, where people might not have a credit card or online payment account. Uber doesn’t let people book rides in advance, something that helps some rivals stand apart.

Also, it faces regulatory problems in many cities around the world, highlighting how difficult it is to operate away from home. Rio de Janeiro, where Uber was already struggling against rivals, recently passed a law that outlawed Uber in its current form, and it’s engaged in regulatory battles in Australia and elsewhere.

The inability to win big markets outside the U.S. has long been one of the top strategic concerns for Uber (more on that here). It seems almost certain that Uber won’t have global monopoly the way companies like Google and Facebook do in their respective markets. Now the question is, how profitable will the No. 2 or No. 3 player be? Investors in the U.S., for their part, are betting big that there will always be a place for Lyft, which is a distant second place to Uber.

For cities with three major players, one might have a market share of 70%, with the others taking 20% and 10%, respectively, says Gett CEO Shahar Waiser.

Taxi Apps as Telcos?

It’s reasonable to expect the consumer ride-hailing market to play out like the telecom industry, where there’s often room for profitable, albeit much smaller, competitors, says Gett’s Mr. Waiser.

For cities with three major players, one might have a market share of 70%, with the others taking 20% and 10%, respectively, he says. Hundreds of billions of dollars are at stake. “It’s a significant pie,” he says.

Gett operates in 57 cities, mainly in Europe, and has a private-market valuation of more than $1 billion after having raised more than $200 million. It leads Uber by a slim 20% margin in Russia, according to the 7Park data. Yandex, Russia’s top search engine, preloads a ride-sharing app on Android devices there and has greater share than both Gett and Uber combined. But that app aggregates availability from existing taxi firms; it doesn’t deal with drivers directly.

Mr.  Waiser says his firm is going after the “corporate” market, which Uber may have a harder time cracking if it doesn’t take on liability risk the way Gett does. Gett has deals with more than 3,000 businesses, he says. A spokeswoman for Uber did not have comment.

Correction: An earlier version of this article incorrectly said Uber is ahead of its rivals in Malaysia. This version includes new data that show ride-sharing app MyTeksi is the market leader.

Amir Efrati is executive editor at The Information, which he helped to launch in 2013. Previously he spent nine years as a reporter at the Wall Street Journal, reporting on white-collar crime and later about technology. He can be reached at [email protected] and is on Twitter @amir