Uber squander its position, hasten its rivals..!
Uber is the one of the largest ride-hailing company based on the United States. It is providing service in the worldwide. There were more investors and riders for this company. But, it facing more problems related to their driver sexual harassment of its riders and stealing of office secret. It is trouble situation gave space to a growth of its rivals and riders switching service to other ride-hailing company.
The Uber is losing its unique place in the US its biggest market. It is also facing a series of crises including the temporary absence of its Chief Executive. The advance of the Lyft-based San Francisco taking its chance while Uber’s market share dropping from eighty-four percent at the beginning of this year to seventy-seven at the end of this month. According to the data from the second measure of a research firm that use the unidentified credit card data.
Steady growth in the Global share
Though, Uber global share is still growing with first-quarter revenues surging more than three billion dollars triple the level of the previous year. However, their growths in the United States getting down slowly and the investors have become concerned after a period of crisis has left in the top ten ranks in descending order. While the Uber dominates the market in its home market in the United States, now it facing tough competition around the world like Ola in India and Grab in the taxi dispatch Southeast Asia.
The main cause for the raise of the new competition, the ride-hailing depend on the network effect, more drivers and drivers lead to the more efficient system. These all are an essential advantage to being the largest player in the market. In May, Uber is valued at more than sixty-two million dollars tried to reassure the investors by sharing new projection for the growth, according to the several people who were contacted. Few investors worried about their sharing in the Uber, because of its self-destruction to some extent. At such a high valuation it was priced for perfection.
Fault from Uber side
The mistakes of the Uber are involving in the allegation of the sexual harassment, mishandling the medical record of the rape victims and a lawsuit over the theft of trade secrets have spoiled the company image and led to the string of the senior departures. The Chief Executive Officer of the Uber, Travis Kalanick took leave for one week with naming other Uber cloned App for the replacement, with a statement after a special board meeting saying the company will run without twelve executive and many of them are new in their jobs. As well as the Kalanick’s former two executives left the company during that time.
According to the data from Second Measure, the annual growth of the Uber slowly reduced from the fifty-five per cent in the previous year to forty per cent in the current value. Uber’s share decline in the market due to the Uber’s CEO, play a role on the President Donald Trump’s business advisory council which encouraged the users to stop using the company’s app and its service. So many unwilling users uninstall the app and it hit hardest in the New York, Boston and San Francisco along with the Uber’s top ten United States markets.
Expansion of Lyft
In the meanwhile, Lyft have steady growth and which completed a six hundred million dollars fund raising in the market. It has seen users number boosted up by the fallout of the Uber. Lyft remains a small prey in the market, with the last year revenues of seven hundred eight million dollars just one-ninth of Uber’s. But somehow it managed to hang on its market share raised due to the Delete Uber campaign and check How to get Uber for x App at cheap price?.
A spokesperson for Lyft said that the second measure underestimated its growth in the gross booking, which the company has one hundred thirty-five per cent in April. Lyft’s gross ride value revenue was more than one billion dollar in the first four months of this year, indicated by the calculation of founder of the Data consultancy System2, Matei Zatreanu. At the same time, according to his estimates of Uber’s gross ride revenue would have been more than four million dollars at the same period in the United States.
Lyft has been particularly successful in San Francisco, where it has captured about forty percent of the market according to the data of the second measure. Consumer survey suggests that the internal turbulence at Uber has an impact that a quarter of its user has a negative view on the company and four per cent of its user has stopped using the app based on the survey by consultancy of cg42. Stephen Beck, one of the managing directors of cg42, points out that for the consumers it is very easy to switching their service.
Investors increases for Lyft
Lyft shares are in demand right now wealthy investors who looking to buy into tech startups through the private market. Ken Sawyer founder and managing director of Saints Capital, San Francisco-based firm that buy the shares for the early stage venture capital firms waiting for the cash out of investment in the earlier of this year.
While saint didn’t purchase any shares of the Lyft ‘ask’ on the private exchanges or what the early investors or employees says they are willing to sell their shares forgone up gradually. Sawyer says that within a decade their company has purchased more than one million dollars worth of the private shares.
In some private deals changing the hand of the Lyft shares in the range between twenty-five dollars and thirty dollars a share, based on the another source who has arranged the sales. They asked to remain incognito to maintain the relationship with clients.
Opinion of Sawyer
A comment for the Sawyer that the while that is less than the thirty-two dollars a share the discount has narrowed since in the start of the year, the value of the latest funding round. There was the lack transparency in the private market, then the prices can vary widely, there will need to pay more for the preferred shares than the common shares.
This trend makes could keep the Lyft employees happy and motivate as the company looks its market share close to the Uber. Now the ride leaders back on their shoes. It thanked for the fresh injection of cash and adding the new features and expanding into the new markets. The Uber struggles helped Lyft’s trust and position with riders. A market research firm TXN solution said the share of the Lyft has risen in the market to just under twenty-five percent.
Uber’s impact on the Carmakers
Jaguar Land Rover disclosed a twenty-five million dollars investment in the Lyft. Careem a Middle East ride-hailing service, Daimler AG took part in five hundred million funding. There are enormous of the other products and that these investments might give to the carmakers access to a new sales channel by rent out their cars to the Uber drivers for example.
It may be atrocious time for the Uber because it reels the stream of crises in the internal and outside of the company. It losing the trust of the riders and gradually reduce the usage of the app. Uber’s Chief Executive was on leave for one week and there may chance to increase the growth of the Uber share along with the alternate track.