Uber: Competing as Market Leader in the US versus

Being a Distant Second in China

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Table of Contents
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Summary Page 3

Study Questions Page 4

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Summary
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Uber has seen great success in the United States as well as sixty other countries around
the world since its launch in 2009. Uber’s business strategy has worked far and wide,
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successfully suppressing its competition of taxi services and Lyft. Upon expanding into Asia,
Uber was hit with a roadblock in China where their ease of transition to foreign markets came to
an end. Since Chinese citizens already had a mobile application that allowed them to hail taxis
and track other means of public transportation, Uber did not have the edge they were accustomed
to in North American markets. Initially, they caused a disruption to the Chinese marketplace by

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 attempting to replace the taxi service industry altogether.

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Study questions
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How could Uber retain its dominant position in the US market? Are there services and/or
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geographic niche markets where Uber should accommodate Lyft?

In order to retain its dominant position within the US market, Uber can continue to
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establish themselves as a multi-service provider and expand upon existing services such as Uber
Eats. Examples of future business ventures for Uber include, UberDelivery/UberPick-Up in
which drivers could deliver groceries, packages and home amenities right to your door.
Lyft has a weaker position in markets that Uber is predominantly used. If Uber continues
to pave the same path and invest in marketing, Uber has the potential to become a household
name and leader in the transportation industry.

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 How could Uber effectively compete with Didi? Should it compete head-on in China, or should it
side-step competition by focusing on niche markets through service innovation, and geographic
expansion within China?

Uber could better compete with DiDi by better understanding the markets needs. While
DiDi began as a taxi-hailing service, they built up customer loyalty prior to the introduction of
new features. For example, they began to expand upon their business model by adding “Hitch”
as an alternative to taxis altogether. Uber on the other hand came into the market with a business
model found to be successful in the U.S., but not so much in a market still dominated by taxis.
Competing head-on with DiDi in China proved to be unsuccessful in the beginning. Uber
lacked the financial support of investors in the Chinese market and along with their business
model replacing taxis altogether, they initially set themselves back further than they had

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anticipated. Focusing on niche markets could potentially increase the usage of Uber in Chinese

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markets. Innovation of new services will be key moving forward as Uber has had to play catch-

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up, therefore Uber needs to bring the ride share service to the Chinese market. Since the only

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way Uber can truly compete with DiDi will be by expanding on the ride share service like
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UberPOOL since that is currently under served by DiDi in China.
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