There are many, many ride sharing companies springing up across the globe. Several are now household names in many cities: Uber in many countries, Lyft in the US, Didi Chuxing in China and Ola in India. For South East Asia, many people know of – and use – Grab whilst in Brazil it is a company called 99.
Many of the established companies own stakes in the others: Uber had for several years, a stake in some of the Asian ride share companies and Didi owned part of 99. After Uber’s failed attempt to break into the China market, they sold that business to Didi as well.
However, all of these companies have a connection to one central financier: Softbank, a Japanese investment company with fingers in many industries and markets. Estimates in a recent article published by The Economist magazine suggest that 90% of all global ride share journeys are with companies partly owned by Softbank. By the way that is over 40 million rides per day!
So, with an industry that is still evolving and highly competitive, Softbank has used a Monopoly™ game strategy to ensure that whoever wins the majority of the market will be one of theirs. That means that when this industry starts to make more profits globally, Softbank will start earning big dollars.
As the market is still volatile, Softbank has been able to use its investor power to demand each of its investments change strategy. With Uber, they have successfully persuaded them to stop its global expansion and concentrate on its core markets to reduce the losses in readiness for a planned public offering. They have also been bordering on monopolistic and cartel behaviour by encouraging competing companies (that they have investments in) to stop their price wars and to help increase fares – that is not good for the consumer. That encouragement has been described by Softbank as “advice”!
Ultimately, Softbank wants ride sharing to become autonomous because they see that path as being the least cost model – and that means more profits for them.