Uber competition: Can a global taxi alliance put other ride apps on the map?

Taxi Apps Are Thinking Seriously About How to Compete With Uber

Taxi Apps Are Thinking Seriously About How to Compete With Uber

Moneybox
A blog about business and economics.
Jan. 13 2015 8:58 AM

Taxi Apps Are Thinking Seriously About How to Compete With Uber

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Uber is coming.

Photo by Gonzalo Arroyo/Getty Images

As Uber continues its formidable march across the globe, to the tune of $3.3 billion in funding, other on-demand ride apps are taking a close look at how they can compete. Individually, it’s a tough battle. Which is probably why one idea that is being floated, according to BuzzFeed, is for regional Uber competitors to band together against Uber as part of a global network:

Ride-hailing apps around the world may soon work together to compete against Uber by forming a global alliance of regional players, according to two executives at companies involved.
The executives also suggested that the venture capital firm Softbank Capital has helped to create this potential global taxi alliance. Softbank recently invested in two of Uber’s biggest competitors: It invested $250 million in funding to Southeast Asia’s GrabTaxi in December and $210 million in India’s OlaCabs in October.
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The details on this prospective partnership are, for the most part, quite fuzzy. Brian Cu, a co-founder of Philippines-based GrabTaxi, told BuzzFeed that such an alliance might include “knowledge sharing and maybe cross-booking” between apps. Oneal Bhambani, chief financial officer for San Francisco–based ride company Flywheel, added that there may be “a global alliance to unify all these regional markets and unify taxis across the globe in other markets.” Uber declined to comment to me on the BuzzFeed story or any rumblings of a “global taxi alliance.”

Should such an organization emerge, it will be interesting to see what information and technology the different companies choose to share with one another, and how they use it. Too much teamwork among apps that compete in the same markets would probably raise flags as anti-competitive. But if the companies in the so-called alliance all operated in different areas, then their decision to link up to offer customers global coverage and better compete with Uber would be fine, several experts on antitrust law said. “A global taxi alliance could be a good thing,” Eleanor Fox, a professor of trade regulation at New York University School of Law, told me in an email. “They might be adding competition to the market.”

Perhaps more importantly, the fact that several companies are thinking of creating an alliance around on-demand rides to fight Uber, instead of battling it through regulation, could mark an important turning point in how we think about these services. “This looks like a different reaction to Uber than the traditional taxi industry’s current reaction, which is to try to use the regulatory system to push Uber out the market,” says Harry First, co-director of the competition, innovation, and information law program at NYU Law. “Maybe there’s a change in tactics in the industry where they realize they have to compete with Uber, not just block Uber from markets. That recognition is a positive one.” In terms of keeping Uber from becoming the only player in ride services, it might be a more sustainable strategy as well.

Alison Griswold is a Slate staff writer covering business and economics.