Uber Adds auto-rickshaws in Dhaka, Uber's Transportation Aggregation, and Mobility's New Players

Uber has added and made CNG auto-rickshaws available on its platform for hire for its users in Dhaka city, per The Daily Star. Uber users now can see and hire CNG auto-rickshaws along with regular UberX, Premier, Moto, and UberXL options. The company, however, did not make any announcement of the launch. Uber has been working with CNG auto-rickshaws in Chittagong since 2019. This is a natural expansion for the company and goes well with its ambition to become the “Amazon for transportation services” in every market it operates in.  

With the addition of CNG auto-rickshaws, Uber effectively covers almost all major transportation services for users in Dhaka except for buses and a handful of other public transport options, which, to speculate, the company is likely to add in the coming days. I would not be surprised if Uber moves to add options like buses and trains in the coming months. 

The majority of tech marketplaces are about aggregation play — on both demands and services ends — because aggregation drives growth, market power, and enables competitive moats. 

Uber’s transportation aggregation play and competition  

From Uber’s Transportation Aggregation Play In Dhaka:  “Uber CEO Dara Khosrowshahi wants to build ‘the amazon of transportation’. Uber’s moves into broader transportation play and integrating last-mile transportation services and public transit facilities in many cities prove that Uber genuinely wants to be the ultimate transportation aggregator. 

This same strategy has been in the work in Bangladesh. The company has been working hard to build a portfolio of transportation services. Today, it offers over seven different types of transportation services via its app. If you open the Uber app, you will get seven different options to choose from and are likely to find transportation options for your every need starting from Ubermoto to Uber Hire. This has significant strategic implications for Uber’s competitors in Dhaka.”

• The increasingly aggressive move on the part of Uber to become the ultimate transportation aggregator is likely to upend the competitive landscape in the market. Aggregators are powerful because they enable a virtuous cycle that is quite impossible to stop. More transportation options in the Uber app means more customers will download and use the Uber app, which means more trips for driver-partners, which means more driver-partners will join Uber leaving other competing platforms. If this works, the resultant environment could leave other players in a difficult competitive environment. 
• I wrote in Uber’s transportation aggregator play: “Every single player in the transportation space in Dhaka is behind building some sort of bundle. Shohoz wants to become a super app. It has been moving into all these services. Pathao has been into “one app for all your needs" for as long as I can remember. And here Uber is patiently building a transportation bundle. These are important strategic moves with long-term consequences.”
• Until now, Obhai has been the leader in the CNG auto-rickshaw vertical. Pathao and Shohoz don’t offer CNG options. Now that Uber has moved into the vertical, a new competitive dynamic is likely to ensue. Obhai will face greater competitive pressure and other players are likely to join the race. 
• For the last two years, the ride-hailing sector suffered a significant decline in demand due to the coronavirus pandemic. Pathao and Shohoz have tried several initiatives outside of transportation such as healthcare, delivery services, ecommerce, etc to manage the fallout from the pandemic. 
• Uber continues to maintain its lead across ride-hailing verticals while other players look to expand into more verticals outside of ride-hailing. 

New mobility players

• At least two new players, Jatri and Shuttle, are making moves with some headway into the transportation with a different strategy. While until now, most ride-hailing companies focused on private and individual transportation, Jatri and Shuttle are looking predominantly into large-scale public transportation. 
• Jatri started with covering public buses in Dhaka and is now moving into rental cars and other relevant group transportation solutions. 
• Shuttle started with focusing on safe group transportation options for women in Dhaka and is now, with a new round of investment, looking into broader public transportation space. 

Public transport is a big market and is a real problem. The problem ride-hailing companies, in general, have been trying to solve with bikes and private cars, public transport options such as buses solve it more efficiently. To that end, Jatri and Shuttle have greater relevance. The challenge for both players would be potential competition from the existing players like Uber that are likely to expand their options in the coming days.