By Katie Benner
The global groundswell against Uber is, on its face, a futile fight because Uber has a huge war chest it can use to beat back legal challenges around the world.
If the goal is to get rid of all companies offering Uber–like apps and service, well, that moment has passed, too. Consumers are hooked on ride-hailing apps from Uber, Lyft and local competitors in the U.S. and Asia because the apps are often the best, fastest, most reliable way to hail a cab. Popularity is a hard thing to beat down.
But regulators and politicians fighting to stop Uber’s expansion – from Rio de Janeiro to Berlin – could still damage an essential piece of the mythos that has helped to underpin the company’s $41 billion valuation: the belief that transportation apps are a winner-take-all game, and that Uber will most likely be that winner.
The valuation thesis hinges on the notion that Uber’s riches will allow it to put more cars on the road, which cuts down on pick up times, which increases the use of Uber’s app, which attracts more drivers. That virtuous circle should leave little room for a competitor. It should also make way for Uber to build a huge logistics network on top of an army of drivers, most of whom are average Janes and Joes who drive their own cars (sometimes as their full-time jobs).
Yet despite being the dominant player in many of its 240 markets around the world, Uber already faces strong local competition in China from the Alibaba–backed Kuaidi Dache and another company, Didi Dache. The latter just raised $700 million from investors including the sovereign wealth fund Temasek and Yuri Milner’s DST 
Global.
Uber also has fledgling rivals in India, Spain, Latin America and France. And Flywheel is emerging as a competitor in U.S. cities including San Francisco, Seattle and Los Angeles. As judges halt the use of Uber’s app and the company grinds away in international courtrooms on appeal after appeal, it opens the door for others to steal market share.
As we’ve seen in India, where an Uber driver was accused of raping a passenger, the company doesn’t have a great international brand strategy. It perfected its marketing message in the U.S.: safety first, no more drunk driving, carefully vetted drivers and a record of your ride. That message may not work in countries where no ground transportation company can possibly make or keep all of those promises.
All of this leads back to the question of whether Uber – or any other single car–hailing app – is a global business.
Hotel chains and airlines are naturally global companies because so many of their customers travel from country to country. Even Airbnb, which can’t guarantee the uniform experience that Hilton can, is inherently global because so many international travelers use its service.
The car and cab services Uber is stalking aren’t, inherently, global businesses. Most cab riders are locals getting around, heading to appointments and running errands. It’s quite possible that advantages such as driver fealty, shorter wait times and customer loyalty that the network effect conveys to a dominant local competitor fades outside the borders of any given city, region or country.
If cab services can leverage software, or if local ride services can form a coalition of sorts, I wonder whether country-specific ride-hailing apps might be rolled up into a larger, global parent company.
Uber pioneered the idea of getting transportation – instantly, effectively and predictably – from a smartphone. But just because that’s become routine for urban nomads in the U.S. doesn’t mean that it will be the app of choice for passengers elsewhere.
And if that’s the case, then it puts a little extra pressure on you if you’ve raised hundreds of millions of dollars from investors that need to generate big returns and adore you because you have a certain kind of global sparkle.
Source:Delawareonline
