Many global investors and Silicon Valley pundits are gradually viewing the rideshare industry as a winner-take-all game.&nbsp; 
 
Chinese powerhouse Didi Chuxing&#39;s acquisition of Uber Technologies Inc&#39;s China operations marked the biggest move yet toward consolidation. On the day, the Didi deal was announced earlier this month, Uber board member Bill Gurley said Uber&#39;s rivals in other markets had a slim chance of splitting the market with the dominant player, just as Uber struggled to erode Didi&#39;s share in China. 
 
After China, the industry will consolidate in other markets, said Hans Tung, an Asia-focused investor and managing partner at GGV Capital, which backed Didi and Grab, a Singapore-based ride service. 
 
&quot;There will be a dominant Number 1,&quot; he said that same day. 
 
Few barriers, perpetual competition&nbsp; 
 
The consensus of 11 economists interviewed by Reuters, however, suggests an entirely different scenario, one of perpetual competition in a business with relatively few barriers to entry. 
 
&quot;That one firm wins is a narrow and not accurate way to think about these firms,&quot; said David Evans, chairman of the Global Economics Group and co-author of a recent book that included Uber, &quot;Matchmakers: The New Economics of Multisided Platforms.&quot; 
 
The growing industry, which UBS estimates to be a $40 billion market, has room for at least two successful players, and perhaps a few smaller ones, ten other economists who have studied ride-hailing agreed.&nbsp; 
 
The industry, they said, has none of the elements that traditionally have enabled single companies to control a sector. If it is the first of its kind, a company can dominate markets that have huge infrastructure costs, such as putting up cell towers or laying pipes; a large workforce of employees with specialised skills; and customers who get locked into a service and have difficulty leaving for competitors. 
 
With free apps that can be downloaded in seconds, ride-services, by contrast, are relatively cheap to start, &nbsp;also because of the dependence on contract labour with no inherent loyalty or specialised skills.&nbsp; 
 
&quot;You may not want to try a new social networking site if your friends aren&#39;t on it,&quot; Evans said. &quot;But you don&#39;t care what app your friends use for ride-hailing.&quot; 
 
&#39;Room for two&#39;&nbsp; 
 
The question of whether on-demand ride services will remain open to new players has vexed startups and investors since Uber started the industry seven years ago. 
 
Companies taking on Uber include Lyft in the United States, Grab in Southeast Asia, Ola in India and newer startups like New York City&#39;s Juno. In the United States, in particular, part of Uber&#39;s attraction to investors is the chance at grabbing the entire industry. 
 
In a statement, Uber said: &quot;The ridesharing industry around the world is highly competitive and innovative. That&#39;s good for riders.&quot; 
 
Uber investor and board member Gurley argued that any competitor would need to pursue a different strategy - perhaps offering more luxury and high-end services - to successfully battle Uber in its strongest markets. 
 
Didi, Ola and Grab did not respond to requests for comment. 
 
When business magnate Carl Icahn invested $100 million into Lyft in early 2015, he told media outlets he saw &quot;room for two.&quot; Chris Sacca, a prominent venture capitalist who invested in Uber, responded &quot;This is a winner-take-all game,&quot; on Bloomberg television. 
 
Lyft has hired an M&amp;A firm and recently explored the possibility of acquisitions by several companies, a source familiar with the discussions said, and reports of a possible sale stimulated talk of whether it could compete with Uber. 
 
Lyft says it can. In the United States, it says it more than tripled its drivers to about 315,000 in the last year. Between October and May, it nearly doubled its annual gross revenue to $1.9 billion - although that figure does not reflect the many rider discounts and promotions Lyft offers. 
 
Uber has 1.5 million drivers and projected $26 billion in gross revenue globally this year, based on a 2015 presentation for investors. 
 
Last year, Lyft hit another benchmark: the wait time for a ride is three minutes, on par with Uber, said president and Co-founder John Zimmer. At three minutes or less, a passenger will almost always complete the ride. 
 
Meanwhile, New York-based Juno has brought on 12,000 drivers since launching earlier this year and already has hit the three-minute wait time in Manhattan, said Co-founder and CEO Talmon Marco. 
 
&quot;This is a fairly local industry,&quot; Marco said. &quot;You can be a hero in New York and you can be zero in California, and it&#39;s OK.&quot; 
 
In India, Uber and Ola are neck and neck around 45 per cent of the market each after Uber&#39;s market share fell and Ola&#39;s rose in 2015, according to market research firm 7Park Data. 
 
The challenge for new startups, however, is that leading companies subsidise their drivers and passengers as they prioritise gaining market share over profit. Both Uber and Lyft have spent heavily on driver bonuses and rider discounts and promotional credits. 
 
Max Wolff, an economist at Manhattan Venture Partners, believes competition will thrive mainly because ride-hailing technologies are not overly complicated and drivers aren&#39;t earning enough money to be loyal to a single company. 
 
There is room for other players even if Uber is dominant, he said. &quot;They&#39;re not as big, but they&#39;re there, too. They&#39;re not some wheezing, dying remnant.&quot; 
 
(WION with inputs from Reuters)&nbsp; 
&nbsp;

The consensus of 11 economists interviewed by Reuters suggests perpetual competition in a business with relatively few barriers to entry

Many global investors and Silicon Valley pundits are gradually viewing the rideshare industry as a winner-take-all game. Chinese powerhouse Didi Chuxing's acquisition of Uber Technologies Inc's China operations marked the biggest move yet toward consolidation. On the day, the Didi deal was announced earlier this month, Uber board member Bill Gurley said Uber's rivals in other markets had a slim chance of splitting the market with the dominant player, just as Uber struggled to erode Didi's share in China. After China, the industry will consolidate in other markets, said Hans Tung, an Asia-focused investor and managing partner at GGV Capital, which backed Didi and Grab, a Singapore-based ride service. "There will be a dominant Number 1," he said that same day. Few barriers, perpetual competition The consensus of 11 economists interviewed by Reuters, however, suggests an entirely different scenario, one of perpetual competition in a business with relatively few barriers to entry. "That one firm wins is a narrow and not accurate way to think about these firms," said David Evans, chairman of the Global Economics Group and co-author of a recent book that included Uber, "Matchmakers: The New Economics of Multisided Platforms." The growing industry, which UBS estimates to be a $40 billion market, has room for at least two successful players, and perhaps a few smaller ones, ten other economists who have studied ride-hailing agreed. The industry, they said, has none of the elements that traditionally have enabled single companies to control a sector. If it is the first of its kind, a company can dominate markets that have huge infrastructure costs, such as putting up cell towers or laying pipes; a large workforce of employees with specialised skills; and customers who get locked into a service and have difficulty leaving for competitors. With free apps that can be downloaded in seconds, ride-services, by contrast, are relatively cheap to start, also because of the dependence on contract labour with no inherent loyalty or specialised skills. "You may not want to try a new social networking site if your friends aren't on it," Evans said. "But you don't care what app your friends use for ride-hailing." 'Room for two' The question of whether on-demand ride services will remain open to new players has vexed startups and investors since Uber started the industry seven years ago. Companies taking on Uber include Lyft in the United States, Grab in Southeast Asia, Ola in India and newer startups like New York City's Juno. In the United States, in particular, part of Uber's attraction to investors is the chance at grabbing the entire industry. In a statement, Uber said: "The ridesharing industry around the world is highly competitive and innovative. That's good for riders." Uber investor and board member Gurley argued that any competitor would need to pursue a different strategy - perhaps offering more luxury and high-end services - to successfully battle Uber in its strongest markets. Didi, Ola and Grab did not respond to requests for comment. When business magnate Carl Icahn invested $100 million into Lyft in early 2015, he told media outlets he saw "room for two." Chris Sacca, a prominent venture capitalist who invested in Uber, responded "This is a winner-take-all game," on Bloomberg television. Lyft has hired an M&A firm and recently explored the possibility of acquisitions by several companies, a source familiar with the discussions said, and reports of a possible sale stimulated talk of whether it could compete with Uber. Lyft says it can. In the United States, it says it more than tripled its drivers to about 315,000 in the last year. Between October and May, it nearly doubled its annual gross revenue to $1.9 billion - although that figure does not reflect the many rider discounts and promotions Lyft offers. Uber has 1.5 million drivers and projected $26 billion in gross revenue globally this year, based on a 2015 presentation for investors. Last year, Lyft hit another benchmark: the wait time for a ride is three minutes, on par with Uber, said president and Co-founder John Zimmer. At three minutes or less, a passenger will almost always complete the ride. Meanwhile, New York-based Juno has brought on 12,000 drivers since launching earlier this year and already has hit the three-minute wait time in Manhattan, said Co-founder and CEO Talmon Marco. "This is a fairly local industry," Marco said. "You can be a hero in New York and you can be zero in California, and it's OK." In India, Uber and Ola are neck and neck around 45 per cent of the market each after Uber's market share fell and Ola's rose in 2015, according to market research firm 7Park Data. The challenge for new startups, however, is that leading companies subsidise their drivers and passengers as they prioritise gaining market share over profit. Both Uber and Lyft have spent heavily on driver bonuses and rider discounts and promotional credits. Max Wolff, an economist at Manhattan Venture Partners, believes competition will thrive mainly because ride-hailing technologies are not overly complicated and drivers aren't earning enough money to be loyal to a single company. There is room for other players even if Uber is dominant, he said. "They're not as big, but they're there, too. They're not some wheezing, dying remnant." (WION with inputs from Reuters)

Rideshare industry not 'a winner-take-all game', economists see scope of competiton

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Rideshare industry not 'a winner-take-all game', economists see scope of competiton