Uber Technologies Inc. is by far the biggest ride-sharing company in the United States, dominating more than 80% of the industry. Outside of the U.S., it's a different story, one that is likely to persist as rivals successfully raise capital to fend off Uber's advances.
Indonesian Arms Race
Uber sold its China ride-sharing business after suffering huge financial losses, and it may face the same fate in Indonesia, where competitors Go-Jek and Grab are rapidly expanding. According to The Wall Street Journal, both companies are likely to spend heavily to compete against Uber. Go-Jek is looking to raise $1 billion, according to the Journal, and Grab plans to spend $700 million in the region. Go-Jek would be valued at $2 billion if it succeeds in raising $1 billion in a new round, according to The Journal, citing people familiar with the situation.
The ride-sharing market in Indonesia is expected to increase sharply to $13.1 billion in revenues by 2025 from $2.5 billion last year, according to a report co-authored by Google and Singapore's Temasek Holdings Pvt. Ltd.
Grab says it has 33 million downloads, according to TechCrunch as it seeks to win the potentially lucrative Indonesian market. Earlier this month, the company unveiled a plan known as “Grab 4 Indonesia 2020,” as it looks to dominate five Southeast Asian markets: Indonesia, the Philippines, Vietnam, Thailand and Malaysia. Go-Jek says it had 20 million downloads and 200,000 drivers for its service as of August 2016.
Uber, valued at $55 billion, is the world's biggest ride-sharing company by value and the best financed. But Go-Jek and Grab know the region better and are well capitalized for their markets. Grab has raised $1.43 billion from 11 investors, including some from Softbank Capital, according to Crunchbase. Go-Jek has raised $550 million according to Crunchbase, while Uber has raised $8.81 billion, according to Crunchbase.
Uber has responded by partnering with Indonesia’s second-largest taxi firm, Express Group, allowing Express Group’s drivers to use its service in an effort to boost awareness.
What's At Stake
If Go-Jek and Grab were to dominate the Indonesian market, it wouldn't be Uber's first loss overseas.
After a protracted battle with Chinese ride-sharing company, Didi Chuxing, where Uber lost approximately $2 billion, Uber sold its Chinese business to Didi. As a result of the sale, Didi invested $1 billion in Uber and Uber became a shareholder in Didi, but it no longer operates in China. (See also: Didi Chuxing.)
The same situation may happen in Brazil, where Didi, which has invested in local ride-sharing company 99 to take control of the Brazilian market. Didi is also a minority investor in Grab. (See also: Didi is Going Against Uber in a Battle For Brazil.)