Is it time to try another rideshare app?
For the longest time, the rideshare options of your average Australian have been limited to Uber, taxis or piling into the backseat of your housemate’s i20.
But this is changing, and changing fast.
With industry-wide revenue rising at an annualised 130.4% in the five years through to 2018-19, the rideshare industry in Australia is booming and understandably some of Uber’s biggest global rivals have decided now is the time to set up shop Down Under.
But what does this mean; not just for the riders, but those behind the wheel?
We’ve taken a look at some of the new kids on the ridesharing block. Is their emergence just a flash in the pan? Or is it time for riders (and drivers) to try a new ridesharing app?
What’s Uber been doing right?
Uber has the lion’s share of the Australian rideshare market now, but reaching this point has been anything but straightforward. From legal battles to protests, clashes with regulators and hefty ‘industry adjustment packages’, Uber has had to jump through a fair share of hoops.
But, while it may have been an at times bumpy ride, Uber is starting to see some benefits to being first on the ground.
Uber is the first rideshare app to be officially legalised in all states and territories, and the company’s local business boomed in 2018, making a gross profit of $785 million (although much of this went towards a service payment to the company’s US parent).
It’s this ground work that makes Roy Morgan Research CEO Michele Levine, believe Uber is well placed to take on any competition.
In a 2017 paper, she said, “The growth in the Uber market is coming across all age groups but as the app finds more widespread appeal older age groups are increasingly recognising the value and savings available via the service.”
Where has Uber been dragging its feet?
Aside from being caught in surge pricing and the odd GPS issue, most riders don’t have too many issues with Uber and are enjoying the convenience.
And if you’re an Uber driver odds are you’ve made a dollar or two from the app. But you’ve probably also picked up your fair share of gripes along the way.
Diren Gokal, who used to drive for Uber, didn’t feel like enough was done to support drivers.
“The uncertainty of the paycheck would really bother me,” he said.
“I had no control over the rate, and had no rights, since I didn't actually work for Uber. I don't think the passengers get that. In their model, the drivers are self-employed, and carry the burden of running the cost of the car, insurance, fuel etc.”
If the May 8 strikes (admittedly not as widely participated in Down Under as they were worldwide) are anything to go by it’s fair to say many drivers are dissatisfied with the way Uber has been going about its business Down Under.
Who are the competitors?
As services like Lyft are widely adopted as a viable alternative to Uber worldwide, we’re finally seeing some strong competition in Australia with as companies like Ola, Didi, GoCatch and Taxify start to set up shop Down Under.
For riders there’s an obvious financial incentive to try the competition, and Ola Managing Director of Ola Australia Simon Smith believes this has been a great way to enter the market.
“I think it’s always good for consumers when you’ve got a high degree of competition,” he said.
“We have a new member offer as well as ongoing discounts to keep people engaged. And the drivers benefit as well. They’ve been very keen; they’ve been crying out for more competition. They love the fact they can earn effectively 30% more with us.”
Smith also pointed to feedback suggesting that many riders appreciate drivers being able to get a better rub of the green with competitors.
“Our success has shown in Australians actually care about that,” he said.
“Aussies really do appreciate the fact that their driver is getting a fair go as well as they are. We’re also finding a lot of drivers, even when they are driving someone on the competition are actively trying to switch them over to drive with Ola as well.”
So, should you switch?
When it comes to any web-based app, there aren’t too many benefits to loyalty.
So if you’re a driver or a rider who can get a better deal by switching between apps it’s probably in your best interest to do so. As the industry consolidates new players will come and go. The important thing is there is competition.
“We think the market can certainly support two major players, and while it’s important to note that while it is a market where there are certain networks effects within a city, it’s unclear how bit those network effects are internationally. If you’re big in one country it doesn’t necessarily mean you’ll be big in another,” Smith added.
“It’s more important to offer a great service.”
Ben Squires is a freelance writer based in Sydney interested in all things travel, finance and comedy.