# Taxi boss says Ola and Didi won’t catch Uber



## Jack Malarkey (Jan 11, 2016)

Australian Financial Review:

https://www.afr.com/companies/transport/taxi-boss-says-ola-and-didi-won-t-catch-uber-20200226-p544o7
*Taxi boss says Ola and Didi won't catch Uber*








Simon Evans Senior Reporter

Feb 27, 2020 - 12.12pm

The chief executive of the company which operates the 13cabs taxi network says new ride-sharing entrants like Ola and Didi will find it very hard to make inroads into the powerful position established by Uber because they are only competing on price.

Andrew Skelton, the boss of A2B Ltd which runs 13cabs and a fleet of 9,800 taxis, says in contrast his firm has been investing heavily on lifting driver standards and the quality of vehicles, and that will deliver a long-term payoff.

Mr Skelton says there won't be room in the end for all of the new ride-sharing firms in the market, with Ola and Didi effectively trying to claw away customers from Uber with price-driven strategies.

"I think Uber starts a long way in front and has a big advantage. It is all price-driven. There is nothing really that differentiates them,'' he said.

A2B has undertaken a large modernisation program and invested in technology programs and a rebranding to give 13cabs a more contemporary look and feel, while also forcing taxi owners to retire old vehicles from the roads under age restrictions which began in January, 2019.

Net profit after tax slipped 37 per cent to $3.5 million in the first half of 2019-2020, even though revenue was up 4 per cent to $105 million as it stepped up capital spending. The company kept the interim dividend steady at 4¢ per share. A2B Ltd had spent $6.6 million on in-car equipment in the first half including $4.3 million on safety cameras.

Mr Skelton said the 13cabs brand was resonating with consumers after heavy marketing investment and improvements in technology.

He said 13cabs was actually younger than Uber in many markets, including Sydney where it was launched in November, 2016, four years after Uber arrived. The 13cabs brand began in Brisbane in May, 2018, four years after Uber.

He said the brand was rating higher with customers on perceptions of safety, navigation and driver skill. Customers of taxis also didn't have to deal with surge pricing during busy periods.

Mr Skelton said taxi patronage had stabilised after being buffeted by the entrance of ride-sharing firms.

"That (investment) is starting to flow through to the market metrics we measure,'' he said.

A2B Ltd, previously known as Cabcharge until a name change in 2018, has also started up a more budget offering second-tier brand called CHAMP taxis on the road in Melbourne, Sydney and Perth after finding there was demand for such a service at the lower end of the market.

A2B Ltd's total fares processed for the first half was down 3.2 per cent to $505 million. The company's shares were up by about 2 per cent by noon on Thursday at $1.36. The stock had fallen from $1.64 in mid-November.

Mr Skelton said A2B Ltd would make small cost savings from the dismantling of private radio networks used by taxis which had been use for decades in Sydney and Newcastle, with the company shfiting to public networks which offered better prospects for technology upgrades.

Ola Australia managing director Simon Smith said on Thursday that in ''just two years, Ola has established a very strong business here in Australia and become the fastest growing rideshare company in this market''.

Mr Smith said Ola had a ''clear point of difference as market leaders in safety technology'' and had pioneered a number of features such as 'Start-Code' and 'Guardian' which fight ride-share fraud and bolster passenger safety.


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## WhogivesAF? (Feb 17, 2020)

Who gives A F ? The simple fact is: the more entrants to an uncapped industry means the "pie" gets smaller and smaller. There will always be drivers regardless of how low earnings drop, as long as the dollar stays high on the subcontinent.

But, as for attracting professional full time drivers; those days are long gone. Many still find taxi driving lucrative as they can subsidise their income with unemployment benefits.

Hence the attractiveness of Champ, which doesn't require drivers to log on, and they can work the street (often on set prices). But, as technology improves so does the data matching and as the window of opportunity slowly closes for these drivers. And, there ends the attractiveness of taxi driving.

And, as an ex Field Officer with DSS (now Centrelink) let me tell you, what can be done these days in terms of data matching in comparison to "my day" is absolutely frightening. So, without a "subsidy" and working for less than the minimum wage, the job will attract the same quality of people that destroyed it.


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## tohunt4me (Nov 23, 2015)

WhogivesAF? said:


> Who gives A F ? The simple fact is: the more entrants to an uncapped industry means the "pie" gets smaller and smaller. There will always be drivers regardless of how low earnings drop, as long as the dollar stays high on the subcontinent.
> 
> But, as for attracting professional full time drivers; those days are long gone. Many still find taxi driving lucrative as they can subsidise their income with unemployment benefits.
> 
> ...


Every Falsely Accused Unjustly Terminated Uber Driver
Will give their All for DiDi.

Just for Payback.


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## Krusty (Jan 26, 2018)

"Taxi boss says Ola and Didi won't catch Uber"

... Why?, because they are a gingerbread man?


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## Lien Left (Aug 28, 2019)

All he's doing is telling us what we already know, which is the fact that Uber will always be number 1 in Australia.

Ola and DiDi are fighting for 2nd and Ola's manager for Australia (Simon Smith) has acknowledged this himself. He's been quoted saying that Ola are aiming to provide an alternative to Uber, which saves pax money and leaves more money in the pockets of drivers. DiDi on the other hand think they can topple Uber to become Australia's number 1 rideshare.

At this stage, Ola definitely have the upper hand over DiDi in the battle for Australia's number 2 rideshare.


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## Wild Colonial Boy (Dec 26, 2019)

It all boils down to good old WII-FM (What’s In It For Me). Basic sales courses always hammer home that, unless there is a benefit for the users, they aren’t going to purchase just to do the seller a favour. A benefit doesn’t necessarily have to be financial (remember the old saying ‘live by price, die by price’) and can be anything customers value. However well over half of all buyers use price as their sole criteria, and with rideshare probably even higher. However, quite a few people (myself included) are prepared to pay extra for non-price benefits, such as comfort, prestige, safety, brand, quality, etc. The Ubers, Olas and DiDis of this world will always be in a race to the bottom, and once started it is hellishly difficult to turn around. It’ll be interesting to see if 13Cabs can tap into a non-price market or change price buyers into prestige buyers. Current market behaviour seems to be going the other way.


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## Sandhills (Feb 9, 2018)

I don't agree, I think Ubers position was supported by a larger marketing budget which is the only point of difference like coke vs Pepsi ...coke had the bigger budget so was seen as cooler

I think uber is a higher cost venture and will have cash flow problems sooner rather than later at that point the others marketing , which has been next to zero, will ramp up and quickly take market share


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## Bulzulkie (Mar 4, 2020)

The CEO of Blockbuster had a similar outlook in the early-mid 2000's about NETFLIX 

Uber is a technology company and will continue to invest in new technology which will eventually eliminate the need for a paid human to operate, in the long run, this will most certainly come at a much lower cost than the current model.


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## Miuipixel (Dec 2, 2019)

I don’t know about Didi 
Ola is run by ppl who have no idea of how this trade works


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## ANTe (Aug 22, 2019)

Sandhills said:


> I don't agree, I think Ubers position was supported by a larger marketing budget which is the only point of difference like coke vs Pepsi ...coke had the bigger budget so was seen as cooler
> 
> I think uber is a higher cost venture and will have cash flow problems sooner rather than later at that point the others marketing , which has been next to zero, will ramp up and quickly take market share


I look at these rideshare wars being akin to the cola wars.

Uber = Coke
Lyft = Pepsi

Who would be the rideshare equivalent of Pepsi here in Australia though?
Ola, DiDi or Bolt?


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## Waingro (Aug 29, 2016)

I had a guy from Lyft here a few years ago and he was scouting the Australian market and said that it was still too small. 
It is good that there is competition. It brings it all in play. My mates that are in Taxis have been able to keep their hourly rate decent but are renting the car for less. 
If you have a look at A2B information it's taken the hit that was coming and is now stabilised. 
Competition is good but this race to the bottom for Rideshare could be very damaging to each other.


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## Westside Rider (Apr 12, 2020)

Taxi boss is spot on.

Uber reign supreme as king 😎


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## Cil (Dec 27, 2018)

They can catch Uber if they want too
Just turn the app on not hard 😂


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## Westside Rider (Apr 12, 2020)

Ola and DiDi could start with offering things apart from cheaper rides for pax.

Starting with more ride options other than the 4 seater Camry and 6 seater Sportage.


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