Car-hailing services join forces to catch Uber

Published Tue, Apr 12 20163:03 PM EDTUpdated Tue, Apr 12 20163:09 PM EDT

Breakingviews

Robyn Mak

Pooling data may be the best weapon for Uber's top rivals. Four car-hailing services in the United States and Asia are linking apps. While the financial benefits from allowing customers to roam overseas are likely to be small, sharing data could help the quartet take on Uber back in their respective home markets. Users of Didi Kuaidi, China's top car-hailing app, can now book rides from U.S. partner Lyft when travelling Stateside. This is the first concrete output from a global alliance, signed in December. Didi's 300 million users will also soon be able to access cars from Ola in India and Grab in Southeast Asia, all from within the Chinese app. In some ways this is a U-turn. Uber, last valued at a reported $62.5 billion, has built a network that spans 70 territories. But the Silicon Valley behemoth's smaller rivals have until now preferred to stress customised approaches and their deep knowledge of individual markets. The alliance is an implicit admission that international presence counts too. More from Breakingviews : Alibaba's $1 bln Southeast Asia buy tests limits There are no details on costs, or how sales will be shared, but the Didi-Lyft partnership is unlikely to boost revenues significantly for either side. Roughly 3 million Chinese tourists will visit the United States this year. The market is fast-growing but tiny compared to the 10 million daily rides arranged on Didi's platform back home. The direct financial impact of the alliance may be limited, but there could be other benefits. Sharing data and insights could help improve the quartet's services, helping them stay competitive against their global adversary. Lessons from traffic jams in Beijing and Delhi could help Grab's drivers offer a better service in Jakarta, for example. Ultimately, though, succeeding at home is crucial for Didi. Uber boss Travis Kalanick recently admitted Uber China was losing over $1 billion a year competing in the Middle Kingdom. Meanwhile the latter, backed by web giants Alibaba and Tencent, is raising $1.5 billion in fresh ammunition, according to a person familiar with the situation. With huge warchests on both sides, the road ahead could be rocky. For more independent commentary and analysisfrom Reuters Breakingviews, visit breakingviews.com

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Source: Lyft