The popular ride-sharing app Uber is having a hard time continuing its intense pace of global expansion, as countries increasingly enact regulatory laws and competition from similar services becomes more aggressive.
Last week was a busy week for the ride-requesting service. One week ago, police raided the European headquarters of Uber, which is located in the Netherlands. In France, two of the company’s top executives faced a criminal trial. Plus, the company has recently been banned from Brazil’s capital city of Rio de Janeiro. Meanwhile, the major cities of London and Toronto have proposed new regulations that could hinder their services.
Uber’s alternative service known as Uber Pop, which allows people to receive rides from unregistered users of Uber has been banned in virtually all of Western Europe. In Australia, Uber is basically illegal, but the service remains popular. Major court cases are set to take place in the near future.
In Asia, Uber is facing major competition from alternative ride-sharing services and the expansion of local transportation markets. In some cases, Uber has expanded into the business of traditional car renting services. Some believe that this is the company’s response to local Asian market conditions. China in particular has not been an easy place for Uber to conquer.
Back in the United States, Uber is facing a lawsuit in California that might require contract drivers of the company to be treated as employees.
More than $7 billion of capital is invested into the service, as the company is seeking the possibly unrealistic goal of total global market share. Uber is now available in 60 countries worldwide. The company was founded in 2009. Since October of 2012, there have been at least 172 lawsuits against the company in the United States alone.
Uber might also be facing financial troubles. Leaked documents have indicated that Uber lost more than $100 million in the 2nd quarter of 2014. The company reportedly has a total fund of up to $2.5 billion to increase its expansion in China.
Many analysts say that Uber is adopting a “shock and awe strategy” that is of very high risk.
Uber has functioned in the United States by creating heavy amounts of enthusiasm and then pressuring local politicians to establish laws that enable the service to exist. It has adopted a similar strategy across seas.
The company admits that it has expanded at an extremely fast pace. However, leaders of Uber claim that if they hadn’t grown as fast as they had, clones of their services would have beaten them to the game in countries worldwide. Uber says they had to get there first.
However, some countries are not happy about Uber’s growth. Uber Pop has been banned in France, Germany, Italy, and Spain. Additionally, the company is appealing bans in the Netherlands and Belgium. Making matters worse is that the European Court of Justice might lay down more restrictions against Uber.
Even though Uber faces challenges worldwide, the company is still eyeing its next target. Uber wants to achieve success in China, the world’s most populated country. The company is willing to spend billions of dollars to make that happen. However, it faces competition from China’s dominant ride-sharing service, Didi Chuxing. Uber has responded by establishing a subsidy system to win over the Chinese.
While Uber’s path has not been easy, the company is doing whatever it takes to grow and succeed. It seems as if they will do whatever it takes to develop into the globe’s primary source of transportation. It remains to be seen if rules and regulations will ultimately be able to slow it down or if the company will just find the next loophole.
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