What Uber needs to do to catch up with Asian rivals

Regional players have quickly adapted the ride-hailing company’s business model for local markets. Now Uber, the world’s most valuable private company, must play catch-up even as its key executive posts remain vacant amid abuse allegations

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An employee of the online ride-hailing service Grab helps a customer order transport at a kiosk at Manggarai train station in Jakarta, Indonesia. Photo: Reuters

Published: 9:32am, 31 Jul 2017Updated: 9:32am, 31 Jul 2017

Ride-hailing giant Uber’s recent management shake-up is adding to the company’s mounting problems in Asia, where it already faces uphill battles against heavily funded local players in a race to win the region’s lucrative ride-hailing market.

Most of its rivals in Asia have secured additional funding since allegations of sexual harassment and a toxic corporate culture at Uber first surfaced in February. Last week, Singapore-based Grab announced China’s ride-hailing champion Didi Chuxing and SoftBank will invest up to US$2 billion in the company in its current funding round, and it also expects to raise another US$500 million from investors. This makes the company worth US$6 billion, a person familiar with the matter said, making it Southeast Asia’s most valuable tech start-up, overtaking online gaming and e-commerce company Sea, also based in Singapore.

Meanwhile, Reuters reported that China’s Internet behemoth Tencent has invested US$100 million to US$150 million in Indonesia’s ride-hailing start-up Go-Jek, which is looking to raise up to US$1 billion, sources familiar with the matter said. Go-Jek declined to comment.

In India, local media said that Bangalore-based Ola, operated by ANI Technologies, has raised US$200 million to US$300 million early this year at a US$3.5 billion valuation, which is a 30 per cent decline from its $5 billion valuation in 2015.

Former Uber CEO Travis Kalanick resigned last month amid allegations of company-wide sexual harassment and gender discrimination. Photo: Reuters

Uber, the world’s most valuable private company worth nearly US$70 billion, has been embroiled in a number of issues that battered its public image for months, following allegations of sexual harassment, gender discrimination and its prolonged legal battle with Alphabet’s self-driving unit Waymo. CEO and co-founder Travis Kalanick announced his resignation last month, deepening Uber’s leadership void after some executives left or were forced out of the company. Uber has yet to install a new CEO, CFO and president. If such uncertainly lingers it could cool investor interest, analysts said.