Steering group: A bold scheme to dominate ride-hailing

, Internet, Retail, Tarjetas y Pagos Electrónicos, Telecomunicaciones

And to take a firm grip on the future of personal transport.OF ALL his ambitious plans, Masayoshi Son’s most audacious is to create an informal business group among the world’s leading ride-hailing firms. SoftBank has put $20bn into these businesses, starting in 2014 with an investment in India’s Ola. It soon added a stake in Grab, which operates across South-East Asia. Its first investment in China’s Didi came in 2015; it later added an investment in Brazil’s 99 (which is controlled by Didi). Its 15% stake in Uber was acquired in January. How sound a bet this web of investments is remains uncertain, given low barriers to entry and the fact that none of the firms is profitable. But now that around 90% of rides hailed in the world—45m a day—use one of the firms in which SoftBank has stakes, success for the industry will almost inevitably mean success for Mr Son.
In the near term, the focus is on encouraging the ride-hailing firms to compete less feverishly and push up fares. Mr Misra has called on Uber to concentrate on its core markets of North and South America, Europe and Australia in order to narrow its losses before an IPO expected in 2019. In March SoftBank pulled off a coup when Uber agreed to sell its business in South-East Asia to Grab in return for a 27.5% stake. Uber will stop operating in Singapore, the Philippines, Malaysia and Vietnam, leaving the field clear, in theory, for Grab to raise prices.
SoftBank is now urging consolidation in India, where Uber is battling Ola. Mr Son and Mr Misra are encouraging meetings between the firms’ bosses and stress the benefits of a deal. But having backed out of Russia, China and South-East Asia, Uber is determined not to cede in India. It will test the relationship between Uber and its new, biggest shareholder. “Masa can be forceful but it is advice only,” says Dara Khosrowshahi, Uber’s boss.
In the longer term Mr Son sees ride-hailing as a way to profit from a wider upheaval in transport, as the firms develop autonomous cars and roll out electric vehicles. He may invest in charging stations, as well as leasing and financing vehicles. Mr Son’s family of firms could help. Nauto, for example, collects data about drivers’ behaviour that will be useful for self-driving cars. As Mr Khosrowshahi notes, it is another example of Mr Son putting the pieces together and seeing the end state in an industry. And then backing the idea with lots of money.

This article appeared in the Briefing section of the print edition under the headline “Steering group”


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