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Uber: Rising Valuations Amidst Ethical Woes
EVOLVING INDUSTRY
According to Aswath Damodaran (Damodaran), Professor of Finance at the Stern School of Business of New York University, the market size of the global taxi and limo services was around US$100 billion in 2014. According to Damodaran, Japan was the most lucrative cab market in the world with estimated annual revenue of US$20-25 billion in 2014. The second largest market was the UK with estimated annual revenue of US$14 billion, most of it contributed by London, followed by the US market with estimated annual revenue of US$11 billion, the major portion coming from New York, which contributed about US$3 billion in 2014 (Refer to Exhibit I). These three markets were expected to grow at the rate of 2-3% till 2024. |
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However, the global taxi business would grow much faster than this rate as there were many underserved cities mainly in Latin America and Asia. It was estimated that the overall market would touch US$183 billion by 2024.
Uber was the first player in the mobile app-based transportation network. But, others were quick to jump on to the bandwagon as the entry barriers were low. Some of the most notable players were Curd , Didi Dache , Flywheel , GrabTaxi , Hailo , Haxi , Kuaidi Dache , LeCab , Lyft , Line Taxi , Olacabs , and Sidecar . These companies had a common model built around mobile apps. However, Uber was the clear leader as it was the first mover and had deep pockets thanks to its robust funding
