Abstract

Based on business ecosystems in the sharing economy age, the internet based cab service

platform introduces an on-demand business model. The application based taxi services

became widespread and common worldwide as a viable alternative complementing the

facilities of public transport. This research provides a case study analysing the ongoing feud

in between worldwide giant Uber and DiDi Chuxing. We have compared and evaluated the

business model features of the two platforms and our evaluation and comparison of the

strategic placement and execution of the two platforms reveals both the success factors of

DiDi and the sources of Uber's failure in Australian market. This research offers significant

insights into business model developments and consequences for the evolution of future

transportation platforms in the sharing economy.

1.0 Introduction

Uber is a drive-hailing app that enables customers to order a personal or shared car with a

few taps of a mobile app, with payment from user accounts automatically. It also provides

service at a significantly reduced price point, as well as being more convenient than hailing a

traditional taxi. Uber was founded in 2009 and quickly became a reinforced transportation

alternative. It has provided an extra transport option and choice for customers in the point-to-

point transport industry since its launch in Australia in October 2012. With its low-cost

ridesharing option, uberX, over 10 million rides have been finished across Australia, resulting

in a variety of advantages for its customers. But with the inclusion of other competitors like

Ola, DiDi etc. into the internet based taxi services has made a very negative impact over the

performance of this company in many segments.

1.1 Research objectives

This research will provide an overview estimation of the increasing competition in taxi

service market over the financial performance of Uber. The main focus will be on DiDi’s
introduction into Australian taxi sector which has started creating troubles for Uber in

keeping their existing brand reputation, customers and staff.

Furthermore, while this study discusses certain regulatory problems in passing, it does not

examine or provide suggestions for the legislative framework for ridesharing in fields such as

tax, industrial relations or particular regulations relating to transport.

1.2 Research questions

1. What are the main impacts of DIDI on UBER?

2. Why is most of UBER drivers and customers preferred DIDI over Uber since its
launching in July 2019 in Australia?
3. What are recommendations for UBER?
4. What are the impacts in share market of UBER and DIDI?

1.3 Research scope

 It will help in identifying reasons why most of the drivers and customers associated

with Uber since long time are shifting towards DIDI.

 Understanding the business model followed by DIDI in order to provide more

lucrative and safe rides to the customer.

 This study will further help in analysing both impact and the extent by which DIDI

has impacted the business performance, brand image, share market of Uber since its

launching in Australia.

2.0 Literature reviews

Comparison of business models adopted by Uber and DiDi

After two years of intense rivalry for getting a lead in Australian market, Uber has witnessed

a major downfall into its services and financial performance since last few years (Kirby,

2016). Several studies have shown that Uber has invested more than $1 billion a year in

development company since Uber started its service in Australian market in 2012. It has
spent nearly $1.5 bn during 2015, comprising 60% of Uber's worldwide expenditure DiDi

Chuxing, the biggest rival of Uber was formed by the merger process of two major

application service based cab provider of china (DiDi Dache and Kuaidi) and is also

receiving financial supports from Alibaba and is integrated with WeChat's messaging app to

provide unique service to its customers. Being the biggest competitor of Uber in Australian

taxi service market, DiDi invested around $3-4 billion within a span of year to increase its

existing capacities and acquire its control as well as deep reach among masses. And, it has

been observed to be successful in acquiring a major portion of can service market and today,

it is the most dominant and largest cab service provider in Australia.

Although Uber is regarded to be the most successful start-up company with profound global

achievement, owing to its loss in Australian market, some current study evaluated the main

reasons for its failure. Wirtz & Tang (2016) attempted by displaying their company model to

discuss Uber's distinct operating policies in world markets. Salomon (2016) proposed that

Uber was poorly placed to capitalize the Australian market and also outlined the complexity

involved in running its operations.

Value propositions and strategic positions

In 2012, Uber entered into the Australian market whereas DiDi Chuxing was introduced by

Beijing Xiaoju Technology Company, which was founded in June 2012. DiDi accomplished

strategic merger with its Chinese national competition company called Kuaidi Dache

(invested by Alibaba) in February 2015 and then gained market lead status with a complete

registered user scale of 250 million and 80% of market share. Currently, Didi has evolved

from a taxi-hailing software to a one-stop travel platform that includes taxis, carpooling,

chauffeur, car rental and other mobile services. In 2015, the total order volume for the Didi

platform reached 1.43 billion, almost twice the total order quantity of all taxis in the United

States in 2015 (IBISWorld & Statistic Brain, 2016).