Uber’s retreat from Southeast Asia makes India, the Middle East and Latin America the next battlegrounds

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Uber is whittling down the international markets it operates in so it can focus on core regions it feels like it can win.

Uber’s path to global dominance was once perceived to be a certainty as it rapidly expanded into new cities around the world, placing special importance on major markets like China, India and Southeast Asia.

Uber’s mission was to bring reliable transportation for everyone, to everywhere. But after it sold its businesses in Russia, China and Southeast Asia to local competitors, “everywhere” has shrunk to the U.S., Europe, parts of Latin America, India and the Middle East.

The international selloffs told us two key things: Subsidies — bonus payments to drivers to retain and attract more vehicles — cut into its business, making it too expensive to compete against its homegrown competitors in China and Russia. Second, the strategies that helped the company maintain its dominance on its home turf would not always work against well-funded players in foreign markets.

Uber’s latest retreat, selling its Southeast Asia business to Grab, was a stark example of this same phenomenon.

In the wake of Didi’s acquisition of UberChina, local regional players like Grab thought Uber’s withdrawal from China would create more competition as it would free Uber up to invest more in their region.

“With the deal in China, we expect Uber to turn more attention and divert resources to our region,” Grab CEO Anthony Tan wrote in an email to employees in the wake of the merger.

But recent comments from Uber CEO Dara Khosrowshahi indicated the company’s $ 700 million investment in Southeast Asia since it launched five years ago was not panning out in the way Uber hoped it would.

“The economics of that market are not what we want them to be,” Khosrowshahi said at the New York Times Dealbook conference. “I think it’s over-capitalized at this point. We’re going in, and we’re leaning forward. But I’m not optimistic that market is going to be profitable any time soon.”

In addition to capital, Grab has long touted its hyperlocal advantage over Uber. Even in the face of growing concern that Uber would double down on its efforts in the region, Tan continued to believe that advantage would be what helped the company become the dominate player.

“But we have seen that when the local champion stays true to their beliefs and strengths, they can prevail,” Tan wrote in his email to employees after Uber exited China.

While the Grab deal was in part an admission that the company couldn’t compete with its homegrown rival, it was also a sort of call to arms in markets like India, Latin America and the Middle East.

So what does Uber have to do?

Each region requires a different strategy. Through its three international exits, the company has learned it’s not enough to throw cash at a market and hope that the strategy that helped it grow in the U.S. will work elsewhere. The primary thing Uber has to do is to become more attuned to the local nuances of the market.


In the case of India, Uber’s chief competitor is Ola, which saw Uber’s exit from China as a reassuring sign, a source close to the company told Recode at the time. Given the similarities in the complexities of the Chinese and Indian markets, Uber’s loss in China, the source said, meant Uber would have an equally difficult time gaining traction in India.

Indeed, India is a vast market that accounts for 10 percent of Uber’s trips with 10 million rides a week, so ceding ground there will be undoubtedly damaging to the company.

“India is a key component of our growth plan,” Khosrowshahi told the Economic Times during a recent trip to India. “If you look at the market, it’s one of our healthiest markets in terms of growth rates.”

But the ride-hail company has a tough battle ahead as it fights it out with a competitor that is in more than 100 cities, has its own digital wallet called OlaMoney and offers unique services like Prime Play — a service that comes with an in-car entertainment platform for longer trips.

During a recent trip to India, Khosrowshahi admitted that the company needs to better serve the local needs of its consumers and drivers.

“As a global company, we’re constantly building out systems and technologies that are global in nature, but in a country like India we have to be able to be relevant locally as well,” Khosrowshahi said during a recent trip there.

The company recently matched Ola’s own motorcycle-hailing and auto-rickshaw-hailing products. This, however, will be the second time Uber is attempting to launch an auto-rickshaw service after shuttering a similar pilot in 2015 — so doing it right is no small feat.

Uber has to also contend with a decreasing albeit still relatively high proportion of India’s consumers who haven’t adopted credit cards or don’t have bank accounts, making it more difficult to tap into digital services like ride-hail. To solve that issue, Ola built out a payments platform that can be refilled with cash. Grab has done the same.

The company is also still facing backlash from some drivers complaining of low fares. Uber embarked on a campaign to win back its drivers in the U.S., and the expectation is it will do the same for its international markets.

Latin America

In Latin America, the company has seen incredible success as the region quickly became its fastest growing. But Didi’s recent entrance into the market through an acquisition of Brazilian player 99 and its early recruitment efforts in Mexico gives reason for concern for Uber.

Uber is also still navigating regulatory hurdles in Brazil, the world’s fifth-largest market by population that only recently came out of its longest-ever recession. That means the market is still incredibly price sensitive. Parts of Latin America, like in India, also still rely heavily on cash payments.

So Uber has to focus on launching cost-effective services that still provide a level of convenience for consumers and is profitable for Uber.

Middle East

Didi is also an investor in Careem, Uber’s main rival in the Middle East and Pakistan. The startup was founded in 2013, but it has attracted more than $ 550 million in funding from players like Rakuten, Daimler and Coatue Management. Here, too, Uber has to navigate both cultural and economic realities that are often vastly different from that of the U.S.

Recently, for example, Saudi Arabia introduced value-added tax, which forced Uber to raise its prices.

Like in Latin America and Southeast Asia, the company’s strategy in the Middle East and North Africa has to be further customized around the local nuances of each country within the region. In other words, what works in Saudi Arabia may not work in Egypt.

Didi’s investments in regions around the world present a definite challenge to Uber. Ironically, with the Grab deal, Uber’s international strategy appears to look more like Didi’s as the company becomes pickier about which markets to enter.

That doesn’t mean the company isn’t open to making deals in those regions going forward. But, Uber is confident those deals will lean more in the company’s favor and doesn’t expect to pull its operations out of anymore major markets, according to sources familiar with the company’s thinking.

The company only attained a minority stake in the resulting merged entities that came out of its deals with Didi, Grab and Yandex. Uber doesn’t expect that to happen in the event that it strikes some form of an acquisition deal in places like India and the Middle East.

Ola and Uber also share an investor in SoftBank — a connection that may be a boon to any future deals in the way it was for Grab.

SoftBank, which recently acquired a 15 percent stake of Uber, publicly encouraged the company to focus on its core markets such as the U.S. and Europe. The firm holds a board seat in both companies, allowing merger talks between Grab and Uber to begin soon after SoftBank closed its funding deal with Uber.

Recode – All

Cash For Apps: Make money with android app

Netflix deal provides a much-needed boost in the Middle East

Despite what it seems, Netflix isn't a dominant force everywhere on the planet. In fact, it's struggling in the Middle East and northern Africa — Netflix and Amazon combined represent 21 percent of the local subscription video space. The company is…
Engadget RSS Feed

The middle booster of SpaceX’s Falcon Heavy rocket failed to land on its drone ship

Though the Falcon Heavy’s outer cores successfully landed after launch this afternoon, the middle core of SpaceX’s huge rocket missed the drone ship where it was supposed to land, a source tells The Verge. SpaceX later confirmed The Verge’s reporting in a press conference.

The center core was only able to relight one of the three engines necessary to land, and so it hit the water at 300 miles per hour about 300 feet from the drone ship. As a result, two engines on the drone ship were taken out when it crashed, SpaceX CEO Elon Musk said in a press call after the rocket launch. “[It] was enough to take out two thrusters and shower the deck with shrapnel,” he said.

It’s a small hiccup in an otherwise successful first flight. The Falcon…

Continue reading…

The Verge – All Posts

Netflix hid a fake bio-tech booth in the middle of CES

Venture beyond tech whales like Samsung and Sony, beyond the rows of smart speakers and giant TVs and you'll discover that there are weirder things to be found at CES. That might be why Netflix's trojan horse public relations move, establishing a fic…
Engadget RSS Feed

Google and Amazon Square Off, Ignoring Customers in the Middle

A long-simmering dispute between Google and Amazon has escalated into a front-burner feud, following Google’s decision to block its YouTube video service from Amazon’s Echo Show and Fire TV. Google apparently decided to cut off YouTube as retaliation for Amazon’s refusal to carry its products, including Chromecast and Google Home. Further, Amazon has not made its Prime Video service available to Google Cast users. Amazon also recently stopped selling some smart home products from Nest, another subsidiary of Google parent Alphabet.

NASA goes back to the middle ages for its rover tire design

The Mars Curiosity rover has been a big success, but NASA's modern tech couldn't save its tires from breaking down in the harsh conditions of Mars. For future missions, the agency has gone back to the age of knights. Based on the principals of chainm…
Engadget RSS Feed

Digitize or Die book extract: The importance of leadership and middle management for IoT

Even though the digital transformation has been building up for over a decade, most businesses have yet to recognise it as a high priority. This is especially true of larger corporations with solid, apparently unassailable channels and markets.

It is true that some businesses will not be impacted by what IoT brings to the table. But are you truly confident, as you read these sentences, that your business is immune to the IoT revolution?

Many leaders may not see the threats to their business and are blinded by their current analog profitability. Our brain is ‘inherently lazy’ and will always ‘choose the most energy efficient path’ if we let it, writes Tara Swart, a senior lecturer at MIT, in her book Neuroscience for Leadership. “[The brain’s] need [to survive] focuses attention on the sources of danger and on trying to predict where the next threat will appear, on escape or full-frontal battle rather than on an innovative or creative solution, on avoiding risk rather than managing it towards a new suite of products, market or way of doing business,” Swart writes.

If leaders don’t see the threat and opportunities of the IoT and fail to understand how they can leverage that for their company’s benefit, then they are in danger of becoming yet another case study like Kodak, Nokia, and Polaroid.

On the other side of the coin, there are leaders who fully acknowledge that there are some risks and that those might be potentially deadly to their business. They struggle to raise the urgency of change and the associated orchestration among their employees. When properly tackled, digital transformation can ignite a sense of purpose among your teams, and more importantly raise the overall satisfaction and therefore increase buy in from them which often increases productivity. Studies show that when a clear digital strategy is being established and shared with employees, the satisfaction of those employees raises from 10% to nearly 90%.

The importance of leadership

John Kotter, professor of leadership, emeritus, at the Harvard Business School, author of numerous books on leadership, highlights this importance of leadership and the difference between leadership and management when dealing with change management:

  • Management gets the regular work done well, reliably and efficiently, even in exceptionally large and complex systems
  • Leadership sets the vision and the associate strategy. They have the capability to energise their troops to trigger innovation despite the recognised changing problems and opportunities.

Both are important when dealing with a digital transformation strategy in a complex environment and organisation. Leadership is a key success factor when dealing with market niche or in a world where opportunities and technological trends can change greatly. Good management is a key success factor in large organisations operating in protected markets and environments that changes little.

The importance of digital mine canaries

Another important aspect when dealing with people in a digital transformation environment is that there is often someone who will understand the necessary steps to digital transformation before the rest of the peers and thus challenge the status quo. Those within the corporation who recognise the need for change often face marginalisation from the minds of the ‘analog’ leaders and scepticism from peers.

Carl Yankowski joined Polaroid in 1988 as vice president in charge of the business imaging, US consumers and industrial marketing.

He quickly identified the necessity for Polaroid to embrace the digital transformation by acquiring electronic imaging technologies. Unfortunately, MacAllister Booth, his CEO, vetoed the plan and gave clear ‘analog’ feedback, “Anyone who says instant photography is dying has his head in the sand.” Even the next CEO, Gary DiCamillo, had a very similar analog approach. He stated in 2008 at a Yale interview that “People were betting on hard copy and media that was going to be pick-up-able, visible, see able, touchable, as a photograph would be.” A couple of years later he analysed the situation: “We knew we needed to change the fan belt, but we couldn’t stop the engine. And the reason we couldn’t stop the engine was that instant film was the core of the financial model of this company.” This is very similar to Fujifilm’s model; the major difference is that Fujifilm’s management made a clear strategic choice to cannibalise their own market in order to enable the transformation to happen and build a longer term success.

Such an environment unleashes the opportunity to get early warning detection systems for your business, much like a canary in a coal mine. So, keep in mind that the canaries are not the problem. Rather, it’s the way you, as a leader and as a company, leverage them to create value for your customers, your channels, your company and its employees and the shareholders.

Carl Yankowski was Polaroid’s canary, and unfortunately for them, he was ignored.

Polaroid could have been a pioneer in digital photography if the leaders had embraced original ideas and set a vision that included the understanding that failing fast, protecting teams that challenge the status quo, embracing culture change can create the conditions for successful digital transformation. Unfortunately, Polaroid failed in those areas mainly because they did not have the conditions for its employees to embrace change and accelerate the needed digital transformation. This example highlights the importance of the people side of digital transformation and in particular the role of middle management when dealing with change and adaptation of organisations.

The importance of middle management

When dealing with digital transformation, leadership must first set a vision and clearly state and envision the result of the changes that are necessary. But vision and leadership is not enough. The Polaroid case clearly shows that even though they had performed thorough market research, even though they could have acquired the technology and even though they had leaders that had perceived the opportunity behind the risk, they did not realise the importance of middle management in digital transformation.

George Caspar Homans was an American sociologist (August 11 1910 – May 29 1989), founder of behavioural sociology and the Social Exchange Theory. He expressed in his different publications the importance of middle status of individuals in social organisations as well as their capabilities to absorb and drive creativity.

He considers that any hierarchical social organisation is constituted of:

  • ‘Low status individuals’: individuals do not fear status loss as they feel that they do not have anything to lose. Status can be defined as respect, honour, influence on other groups with the associate benefits such as credit, control, attention, influence as well as material benefits.
  • ‘High status individuals’: interestingly high-status individuals have a very similar reaction to their social status in that they are not afraid of losing social esteem, but not because of the same reasons. The consequence of being at the top of the social pyramid are the associate advantages such as ego satisfaction, financial freedom and well-being which in turn gives those individuals a lot of freedom in their everyday life and decisions.
  • ‘Middle status individuals’: Those individuals are on the opposite side, when talking about fear of losing status, of both the low and high-status individuals. The threat of status loss is the highest in this category of individuals as they are respected and can influence the low status individuals while at the same time dealing with the high-status individuals that are more respected and influential to the whole group.

If you apply those categories to a standard medium size company, you could categorise the groups as follows:

  • ‘Low-status individuals’: skilled or semiskilled workers, administrative personnel, transversal function with low influential power, etc.
  • ‘High-status individuals’: executive teams and their associate N-1. Transversal functions with influential power.
  • ‘Middle-status individuals’: middle management that refer to high status individuals to seek for approval and or final decisions, etc.

Middle management and innovation

Recent studies seem to show that when dealing with innovation and transformation and change in a social organisation such as a company, the middle status individuals will be more concerned than other groups to follow the rules at the cost of creativity and innovation. From an innovation point of view (organisational, R&D, process and so forth), being criticised and negatively evaluated for suggesting creative ideas may be particularly salient to middle status individuals. Middle status individuals tend to be less creative than those with high or low status but on the other side they can boost the group’s performance by focusing on productive tasks and filtering out irrelevant information.

High status individuals seem to have more willingness to risk the expression of creative ideas due to the fact that they are well established as high status individuals and do not fear losing the position. Interestingly Michelle M. Duguid and Jack Goncalo in their article “Squeezed in the Middle: The Middle Status Trade Creativity for Focus” seem also to show that, even if the high-status individuals’ creative ideas are objectively not more creative than ideas from the middle or low status individuals, their status and associate confidence makes them more confident to persuade the rest of the group.

In the Polaroid case, middle management didn’t embrace the high-status individuals’ beliefs and because of that they were pushed to the side. This caused major issues with innovation, digital transformation, cohesion and keeping digital talents in the company.

Analog company leaders willing to embrace the IoT should help the company’s middle management to understand the goals and outcomes, as well as the risks and threats to the existing business.

Setting a vision and giving a sense to the mission is not only about defining what needs to be done but also about creating the environment in which employees can challenge the status quo such as the business model, processes, products and services and to the corporation itself and creating enhancements to those.

Explaining the ‘why’ to middle management and more importantly enabling innovative action in the edge of the ‘mothership’ creates the environment for change and adds a sense of urgency and accountability amongst the middle status individuals.

Editor's note: This is an extract from Digitze or Die, by Nicolas Windpassinger. You can find out more about Digitize or Die and purchase it here. All benefits from the book will be donated to the Alzheimer’s Association and Fondation de France.

iottechnews.com: Latest from the homepage

Silver Spring Networks introduces IoT developer program to Europe and Middle East

Silver Spring Networks has launched its IoT Developer Program in a large number of European nations and some selected countries in the Middle East.

Presenting at the Smart City Expo World Congress, Silver Spring Networks said that expansion of the Internet of Important Things to the new countries will help in speeding up innovation. The expansion for Internet of Important Things into EMEA includes the following: Developer Portal; Milli Shield Dev Kit for Arduino boards and IoT Edge Router, Dev Edition. While the Milli Shield Dev Kit for Arduino boards and IoT Edge Router, Dev Edition are already available to European customers, they will be available in the Middle East by early 2018.

According to Silver Spring, the Developer Program is open to both fresh and existing customers and developers who are formulating sensors, actuators, devices, and applications for use in sectors such as smart city and industrial IoT (IIoT).

Itai Dadon, Senior Director of IoT Product, Silver Spring Networks, said: “By offering developers a proven platform on which to create new solutions, they can focus their innovation on game changing applications to solve real-world challenges. We view these new regions as critical to the growth of the Internet of Important Things and are excited about the future of the program and the potential it holds for the broader smart cities and IoT ecosystem.”

In what was described by the company as ‘an intelligent strategic move’, Silver Spring Networks was acquired by energy and water resource management provider Itron for an amount of £615.6 million (approx. $ 830 million) in September. With the purchase, Itron anticipates nearly $ 50 million in cost synergies on yearly basis, which will be substantially accomplished within 36 months of completing the transaction by optimising combined operations and expenses.

iottechnews.com: Latest from the homepage

Watch: Will AI Result in Mass Unemployment or a New Middle Class?

Artificial Intelligence is coming to take our jobs. But is it really their fault, or the company that can’t figure out how to create new ones?

The post Watch: Will AI Result in Mass Unemployment or a New Middle Class? appeared first on Futurism.


The Internet of Things is sending us back to the Middle Ages

Internet-enabled devices are so common, and so vulnerable, that hackers recently broke into a casino through its fish tank. The tank had internet-connected sensors measuring its temperature and cleanliness. The hackers got into the fish tank’s sensors and then to the computer used to control them, and from there to other parts of the casino’s network. The intruders were able to copy 10 gigabytes of data to somewhere in Finland. By gazing into this fish tank, we can see the problem with “internet of things” devices: We don’t really control them. And it’s not always clear who does – though…

This story continues at The Next Web
The Next Web