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Vogo Scooter - The Week In On Demand

Uber Jumps Higher and Instacart Is No Longer Whole

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This Week In On Demand — Dec. 21, 2018

While you prepare for a relaxing holiday break, app companies are trying to get everything crossed off their checklists before Christmas Day. Here’s what happened this week in on demand.

Vogo Lands $100 Million Investment From Ola

Early in the week, Ola announced they were investing $100 million in India scooter startup Vogo. Ola also participated in the Vogo’s Series A, but the individual investor amounts weren’t made public. Vogo’s also backed by Stellaris Venture Partners and Matrix Partners India.

For Ola, the investment is part of an on-going effort to prevent Uber from dominating the on demand transportation market in India. The country is already Uber’s second-highest grossing market in the world. With the latest investment, Ola will be able to offer Vogo scooter rentals through their rideshare app. They’ve already expanded their offerings to include bike rental and motorbike taxi hires.

Uber Unveils New Jump Bike Design, Gets Self-Driving Approval, and Loses UK Drivers’ Rights Appeal

On Tuesday, Uber showcased their new Jump e-bike model to the world. The latest generation bike is designed for increased durability and enhanced user experience, displaying retractable phone mounts and changeable batteries.

Jump Bike Uber
Uber's new Jump Bike

 

Uber acquired the bike-sharing startup in April, but their movements have been minor until recently. In November, the company launched a large fleet of e-bikes in Seattle, and now, they are reportedly preparing for mass expansions across the U.S., the U.K., and Europe.

Also this week, Uber earned approval from the state’s Department of Transportation to relaunch their self-driving program. Uber halted their autonomous vehicle tests after one of their vehicles killed an Arizona pedestrian earlier this year. Going forward, the company hopes to avoid further safety issues by having two employees in the vehicle, similar to Waymo.

While the rideshare company is making progress with their expansion efforts, Uber received a legal hit in the UK. On Wednesday, a UK appeal court upheld the 2016 ruling that Uber drivers are considered employees and not contractors. As a result, the business is required to provide benefits and meet the country’s minimum wage requirements.

It’s the second appeal they’ve lost with this case, but the fight isn’t over, as they’re expected to make an appeal to the Supreme Court.

Lyft Tussles With Keller Lenkner

It was reported last week that Lyft is facing another lawsuit. A petition was filed in San Francisco last Thursday on behalf of over 3,000 Lyft drivers. The complaint claims that the company has refused to cover private arbitration costs. Coincidentally, Uber faces a similar situation after being hit with over 12,500 driver arbitration demands early this month.

The Plaintiffs firm behind both cases, Keller Lenkner, first filed in October after approaching Lyft for settlement talks, which Lyft rebuffed.

The most recent petition comes two months after the first set of demands were filed, which was almost immediately followed by the company filing a civil suit against the plaintiffs’ law firm, Keller Lenkner.

From Reuters:

Lyft alleged that Keller Lenkner lawyer Warren Postman had been privy to confidential Lyft documents in his previous job with the U.S. Chamber of Commerce’s Litigation Center. Postman, on behalf of the Chamber, had sued to block Seattle from adopting an ordinance that would have permitted drivers for ride-sharing companies to engage in collective bargaining with ride-sharing companies that classified them as contractors. Lyft was not a party in the Chamber case but alleged that behind the scenes, it worked closely with Postman on the case

Lyft has also faced other legal battles this year, including two class action lawsuits. A case involving driver pay was launched in May while another focused on driver categorization hit in November.

Instacart Loses Whole Foods Deal

Late last week, Instacart announced the end of its partnership with Whole Foods. The two companies signed a five-year contract in 2016, giving exclusive delivery rights to Instacart.

But Amazon’s acquisition of Whole Foods in 2017 created tension between the two organizations, as the online retailer has intentions of its own to conquer the grocery delivery industry. Whole Foods’ customers will now have to rely on AmazonFresh for on demand grocery service.

While the news may shock some shoppers and consumers, Instacart has been preparing for the move for months. In fact, the company slashed it’s yearly customer fee in November to become more affordable than Amazon’s Prime membership.

They also closed a $600 million investment round in October followed by a host of big-name team additions. Such steps serve as preparation for both an inevitable Amazon showdown and their anticipated IPO in 2019.

Target Expands Shipt’s Product Offerings

On Tuesday, Target announced expansion plans for its on demand delivery options through Shipt. The retailer acquired the same-day delivery service in 2017, and since then, they’ve slowly broadened their store offerings on the platform to extend outside groceries and include select basics across other departments. But starting in 2019, customers will have the ability to choose products in all major retail categories.

Target Shipt Driveup

 

While Amazon and Instacart have been sidetracked with each other, Shipt has become a more prominent player in the grocery delivery industry. Since last year’s acquisition, the service has expanded to 200 markets across 46 states. In comparison, Instacart is available in 240 markets, which means Shipt is quickly gaining ground in the industry.

That’s the biggest hits and misses from this week in on demand. Check back next week to find out what last-minute moves the top companies are making before the arrival of 2019.

 

on demand economy - man ringing bell held by robot hand

The State Of The On Demand Economy

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On Demand In 2018: The Arena Is Crowded, But Growing

It’s hard to believe Uber was founded almost a decade (2009) ago. Lyft is a bit younger, but still a six year old company. It’s incredible to think how much these two apps, along with Postmates, Google Express, Instacart, Grubhub, Doordash, and a whole bunch of others, have changed how we get around, and how we shop for food and household items.

The other day, I tried to remember the last time I was in a taxi cab. I couldn’t. Then, I tried to remember the last time I actually called a restaurant to order delivery or take out. Couldn’t remember that either. However, although I used Instacart once, I still generally go to the supermarket myself. Call me old fashioned.

Bikes and Scooters: A New Wrinkle

Besides all the available rideshare and delivery apps, a new type of app has appeared in the last year that looks to further change how we get around – ebike and escooter dockless rental apps. The concept is pretty simple. A user searches for an available ebike or escooter on the app. The app locates a nearby escooter or ebike. The user walks over, unlocks the ebike or escooter using the app, and rides to their desitnation. When they get there, they can just leave the ebike or escooter parked off to the side. Although the field is pretty new, there are already a few major players. It’s likely not all of these companies are going to make it (remember Sidecar).

  • Bird – $115 million in funding, raising an additional $200 million
  • Jump – Already bought by Uber
  • Limebike – $132 million in funding, raising up to an additional $500 million
  • Spin – Originally bikes, recently added an ebike to their offerings – $8 million in funding
  • Skip – $6 million in funding

If that weren’t enough, Lyft is also developing it’s own e-bike/e-scooter service.

So much change in just a few years, and yet, it’s likely only the beginning.

The Next Five Years

Both Lyft and Uber aim to integrate more with municipal transportation systems in the coming years. Uber CEO, Dara Khosrowshahi, is aiming to make Uber the “Amazon of transportation“. This is why both companies are moving into the ebike and escooter area. Both eventually aim to become an end to end transportation company. Currently, you can use the Lyft or Uber app to book a Lyft or Uber ride only. Look for e-bike options to be added with a year. Over the next five years, expect Lyft or Uber to try and integrate subway, light rail schedules and external booking into their apps.

On Demand Economy - hands holding phone

2018 is likely to be a year of massive change for the on demand arena, and especially for Uber and Lyft. Although Uber is aiming to go public in late 2019, Lyft may try an IPO in late 2018. Whatever happens, 2018 is likely to be the last year in which all the on demand companies are privately held. Besides the coming IPO’s, there’s also the question of how fast both companies will be able to integrate autonomous vehicles into their fleets.

International Rideshare Players

In the U.S., it’s basically Lyft and Uber. Outside the U.S., it’s a whole different ballgame. Didi cleaned Uber’s clock in China (Uber surrendered, left and took a small stake in Didi.) Grab is dominant in S.E. Asia (Uber sold their s.e. asia business to them recently). In India, Ola is number one, with Uber a distant second. In Europe and Africa, Uber is dominant, but stiff competition is coming.

  • Didi – Dominant in China, operates in Brazil; Planning expansion to Europe, Africa, and the U.S.
  • Ola – Dominant in India
  • Grab – Dominant in S.E. Asia
  • Taxify – European startup, also expanding in Africa – just closed a $175 million funding round led by Daimler Chrysler.
  • Softbank – Japanese conglomerate that has stakes in Uber, Didi, Ola, and Grab. Nobody realizes it, but Softbank is actually the quiet king of rideshare on the planet earth. They also just invested in GM’s self driving car division.

Self-Driving Cars

Autonomous vehicles are coming, but they’re not likely to fully take over the roads in the next five years. Even when they do, they’ll still be a need for drivers (although not as many) However, they will start to become a more common site in the next few years. Virtually every major automaker is a player in this area, and they’re all doing some testing in California. Here’s a quick rundown of who’s doing what and who’s ahead.

  • Waymo (Google subsidiary) – The leader in the field. They have more self driving cars on the road, that have driven more miles, than everyone else on this list combined. One of the ways success is measured in self-driving cars is how long the vehicle can go without a human driver having to intervene. By this metric, Waymo is first by a large margin.
  • Ford – A strong second, but they need more testing.
  • GM – Third, but just got a massive investment from Softbank.
  • Tesla – Tesla gets a lot of hype, but their actual self-driving technology lags behind the three front runners
  • Uber – Overall, their program has been a disaster. They don’t have the funds, or the engineering talent to compete with Google in this area.
  • Lyft – partnering with various companies – no real internal program
  • Daimler-Mercedes, Fiat, Honda, Toyota, BMW and many others – all have testing permits for autonomous vehicles in California.

In all likelihood, both Uber and Lyft will wind up incorporating self-driving cars from Waymo, Ford or GM into their platforms. As it turns out, developing true self-driving vehicles is incredibly difficult, and frankly, beyond the scope of Uber and Lyft’s capabilities. Put another way, Google has unlimited funds, the best self-driving engineering talent in the world, and has been working in the field for six years, and they’re just getting to the point where they can safely put a lot of their self-driving cars on the road. As you can see, the on demand economy is a complicated and crowded arena with a lot of moving parts.

It’ll be interesting to see what everything looks like in 2023.

didi chuxing app

Beyond Lyft And Uber: The Top 10 Ridesharing Startups of 2018

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The 10 Most Exciting Rideshare Startups of 2018

Despite their ups and downs, Uber and Lyft have captured the lion’s share of the ridesharing market in the United States. However, dozens of other rideshare (and bikeshare) firms have launched in the last year, devising new strategies to appeal to niche riders. From bicycles to automobiles to scooters, these 10 companies are challenging consumers to get mobile in a completely new and modern way.

While Lyft is still only available in the U.S. and a couple of cities in Canada, Uber has already tussled with a few of these companies overseas. The results, so far, have not been great for Uber.

1. Taxify

Estonia seems like an unlikely place for one of the world’s most successful rideshare companies, but founder Martin Villig had plenty of experience in the world of startups. An early employee of Skype, Villig had already founded three startups and startup associations before he devised Taxify. His younger brother Markus and Oliver Leisalu, a web developer, joined him in launching Taxify in 2013. Unlike Uber, Taxify originally focused on connecting commuters to licensed cab drivers. The company eventually moved into hiring individual private drivers as well. Taxify quickly spread throughout Europe and Africa, having little trouble finding investors. By 2018, they had collected over $170 million in funding and had reached unicorn status. They are now challenging Uber in Europe and Africa

taxify photo

Photo by Janitors

2. Didi Chuxing

Before they starterd Didi in 2012, founders Bo Zhang and Cheng Wei worked at Baidu and Alibaba. Using their experience in the tech industry, they debuted the cab-hailing service in Beijing. The pair’s business model enticed China’s Tencent conglomerate to invest in the nascent company to the tune of $13 million. Despite an attempt by Uber to horn in on the Chinese ridesharing market, Didi continued to attract massive investment. The company gobbled up competitor Huaidi Dache in 2015 and acquired Uber’s China assets in 2016. Today, Didi regularly makes investments in other companies and has become China’s most valuable startup, with an estimated value of $56 billion. Now, they’re challenging Uber in Mexico. Also, they have great commercials.

 

3. Getaround

Some consumers prefer to take the wheel themselves, and Getaround was designed to appeal to these customers. The startup was born at Silicon Valley’s Singularity University business incubator in 2009. The company’s three co-founders wanted to help users easily find rental cars. The Getaround app connects car owners with people who need to rent a vehicle. The startup has raised more than $100 million from firms like Menlo Ventures and Toyota. In addition to Californian cities, Getaround is now available in more than 10 cities, including Boston, Washington D.C. and Chicago.

4. Ola

In 2010, it became apparent to a pair of Mumbai engineering students that the city’s notoriously congested streets were the perfect market for an online ridesharing service. However, Ola didn’t really take off until 2013 when the founders added a mobile app and expanded into Delhi and Bangalore. In 2014, Softbank and Sequoia invested a combined $250 million into the company. By 2016, Ola had expanded to over 100 cities in India. Today, Ola operates in both India and Australia and is valued at close to $4 billion.

5. Lime Bike

While other startups were busy wrapping up the ridesharing market, the founders of Lime Bike saw the potential in bicycles. After a Series A funding round of $12 million, Lime Bike introduced their distinctive dockless green bikes in North Carolina in June 2017. The company has grown like wildfire, spreading through California, Arizona, Florida, Texas and even Hawaii. With the help of Rainbow Technologies and venture capital firm Fifth Wall, Lime completed a $70 million Series B round in February 2018. In May, they added electric scooters to their fleet.

6. Grab

Tan Hooi Ling and Anthony Tan were students at Harvard Business School when Uber began its meteoric rise. They realized they could apply a similar business model in Southeast Asia. The startup began in Singapore as a taxi-hailing service, but quickly expanded into individual and group rides in private cars and shuttles. Investors like SoftBank and Tiger Global Management pumped millions of dollars into the company, helping it reach a $1 billion valuation in only two years. In 2018, Grab received a large influx of cash from Hyundai, allowing it add bicycle rentals and food delivery to its services.

 

7. Bird

A relatively new arrival to the ridesharing scene, Bird is the brainchild of Travis VanderZanden, the former COO of Lyft. VanderZanden left another job as a Vice President of Uber to launch his electric scooter startup in 2017. The company’s dockless electric scooters first popped up in Santa Monica in fall 2017. In just a few months, the startup had expanded into San Francisco, San Diego, Austin and Dallas. Bird has picked up plenty of investors in less than a year. The company has raised over $260 million from firms like Sequoia and Index Ventures. In May, the company’s rapid rise paid off when it was valued at $1 billion. Just a month later, they’re now valued at $2 billion.

8. Blablacar

After a team of entrepreneurs spotted a gap in the French market, they launched Blablacar to help commuters carpool around the country. Unlike other ridesharing apps, Blablacar was intended to match riders based on their level of chattiness. Blablacar received its first substantial investment from Accel in 2012. Since then, the company has spread throughout Europe, India, Turkey, Mexico and Brazil. The company has garnered around $330 million since its launch and recently rolled out its own car insurance plan, Blablasure.

9. Turo

The carsharing startup was originally intended to be a sort of Airbnb for cars, connecting car owners with prospective renters. Shelby Thomas Clark first started Turo in 2009 when he was a student at Harvard. Over the years, the company expanded into other American and Canadian cities. Turo grew further in 2017 when they acquired Daimler’s Croove car-sharing service. In 2018, Turo added luxury cars like Porsches and Bentleys to their stable of rentals. Just this week, they launched Turo Go, which allows instant rentals through it’s app.

10. Ofo

While working on a finance degree at Peking University, Wei Dei decided to use technology to connect bicycle owners with people needing a ride. Working with a group of like-minded classmates, Wei built the campus bike-sharing service into a country-wide startup, providing bikes to millions of Chinese cyclists. Ofo soon caught the attention of some of China’s biggest venture capital firms like ZhenFund and DST Global. The company achieved a $1 billion valuation in 2017 and now operates in over 15 countries, including the U.S., Australia and Russia.

 

From car rental services to individual bicycle rides, these ridesharing companies are changing the face of urban transport forever. By launching in unconventional markets and eschewing outdated business practices, these startups have been able to flourish in the face of stiff competition. As the ridesharing sector continues to grow worldwide, these companies are expanding across borders and finding new patrons. Look for many of them to start showing up in the Western hemisphere in 2018 and 2019.

jakarta uber grab

Uber Teams With Blackberry To Save Its Floundering Southeast Asia Operation

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Uber’s troubles in Asia are well-known. The company blew over $1 billion in China trying to compete with Didi. Eventually, they sold out to Didi. In almost every other Asian market, Uber lags behind a local or regional competitor. In India, Ola is beating Uber. Grab, a Singaporean company, has been eating Uber’s lunch across Southeast Asia.

Uber has now made it’s first big move to reverse its fortunes in the region. You can now order an Uber from BBM, the Blackberry chat and video app. This may seem strange, since in the U.S., almost no one uses a Blackberry anymore. But, many people outside the U.S. do use Blackberry’s messenger app on IOS and Android devices.

In fact, about 190 million people use the BBM app in parts of Africa, the Middle East, and Asia. In Indonesia, (population – 260 million), BBM is the most popular chat app in the country. The app is present on almost ninety percent of the Android devices in the country.

BBM Is Crucial To Uber’s Plan In Indonesia

Indonesia is also a huge rideshare market and home to the fastest growing internet market in the world. The country is already the largest rideshare market in Southeast Asia, with over $1 billion in rides completed this year. By 2025, the Indonesian rideshare market will approach $6 billion per year.

[su_box title=”Indonesia Is The Largest Rideshare Market In S.E. Asia” style=”soft” box_color=”#d1a927″ title_color=”#d1274f”]uber jakarta

Photo by Tokuriki[/su_box]

In all of Southeast Asia, Uber is playing second fiddle to its rival Grab. In Indonesia though, Uber not only lags behind Grab, but also Go-Jek, a local rideshare startup. Since Indonesia represents about 35% of the S.E. Asia rideshare market, Uber desperately needed to make a move.

Integrating Uber with BBM gives Uber a chance to gain some traction in this important market. Approximately 80 million users in Indonesia will now have easy access to an Uber through the BBM app. However, it’s still a big question if this will help Uber make a dent.

Can Uber Compete In Indonesia, Or The Rest Of Asia?

So far, the answer is a resounding no.

In almost every Asian market, Uber has been flat out beaten by competitors who better adapted their services to the local area. Both Didi and Grab offer in-app translation in many markets, while Uber does not. Didi, Grab, and Ola also began accepting cash much earlier than Uber. Many analysts think Uber’s main mistake was trying to push a business model that was originally designed for wealthier markets. Whatever the cause, these errors have cost Uber dearly. While they are the leading rideshare company in the U.S., Uber currently does have above a 30% market share in any country in Asia.

In Indonesia, Uber’s situation is even worse. Grab and Go-Jek already have a combined 90% market share or higher. Uber is far behind in third place. While the Blackberry partnership is a step in the right direction, it’s probably too little, too late. Ridesharing has been available in Indonesia since 2012, and Grab and Go-Jek are just too far ahead. What Uber is trying to do now is akin to if Sidecar (remember them) decided to relaunch in the United States today by integrating with WeChat. Nice try, but it just wouldn’t work.

Photo by Lavinia Elysia

SoftBank Uber investment

Softbank thinks Uber is overvalued by $20 Billion

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By: Dave

Uber was last valued at $70 Billion dollars. However, Softbank is looking to invest $10 Billion dollars in Uber, by purchasing between 17% and 22% of the company from existing investors. That would mean Uber is worth only about $50 Billion, quite a haircut from its prior valuation. Benchmark, which owns 13% of Uber, has voted against the deal and is unlikely to sell any of its shares.

SoftBank Uber investment

SoftBank wants to invest in Uber, but at a discount.

Softbank is already invested in ride hailing companies Ola and Grab Taxi in Asia, and is looking to add a U.S. company to its portfolio. They believe the introduction of autonomous vehicles in the next decade will be a boon for ride hailing companies.

The deal may still go through as a number of Uber investors, including co-founder Garrett Camp, are willing to sell some of their shares at the discounted price. Also, Uber is still on track to lose around $2.5 Billion this year. They have roughly $6 Billion in cash on hand. So, without a new cash infusion, either from an IPO or the SoftBank investment, Uber runs the risk of running out of cash sometime in 2019.

Perhaps that’s why Uber’s new CEO, Dara Khosrowshahi, wants to go public sooner rather than later.