UBER’S GLOBAL CHALLENGE

Uber, well-known for its aggressive marketing worldwide, has recently retreated from their global vision after battling with local competitors:

  • In China: Uber sold its holdings to competitor Didi Chuxing after a long marketing battle with them; and
  • In Russia: Uber scaled back operations and holds a minority stake in a new partnership with Yandex, Russia’s answer to Google.

This trend suggests Uber is being pushed out of emerging economies such as China and Russia due to a number of factors:

  • Lack of cultural insight and local expertise
  • Inability to infiltrate pre-existing competitors
  • Governments hostile to U.S. business; and
  • Consumer preference for ‘home grown’ companies.

Uber has also been aggressively marketing in India, stating that “India is a global priority market [for us] and our second-largest after the U.S. in terms of [total] trips.” The way that Uber operates in India is a bit different than how it operates in the U.S.—i.e., transactions can be cash-based, cars are typically owned by a transportation contractor and drivers work full-time.

Will Uber stay competitive with its India competitor Ola? Uber has been slow to assimilate within India’s transport industry and unable to penetrate key cities as quickly. Ola’s auto-rickshaw service is a trusted brand within the market due to its availabilty and reliability.

In India recently both Ola and Uber reduced incentives for drivers. The result was many drivers going on strike. Going forward a viable option may be for Ola to purchase Uber’s local market share enabling reduced operating cost and an increased price point for the combined entity.

REFERENCES

https://www.theguardian.com/technology/2017/jul/13/uber-russia-yandex-chinese-business

https://www.bloomberg.com/news/articles/2016-11-14/uber-s-kalanick-might-have-last-laugh-amid-new-chinese-rules

Uber in India is fundamentally different from Uber in the West

http://economictimes.indiatimes.com/small-biz/startups/uber-is-no-match-for-auto-mated-ola-here/articleshow/58817104.cms

https://www.quora.com/Which-taxi-service-do-Indians-prefer-Uber-Ola-Meru-or-EasyCabs

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AGTECH & HEALTHY FOOD SECTORS RISING INDIA’s CHANCE FOR INCREASED TRADE WITH AMERICA

U.S.-India trade has grown to $115billion. The U.S. is India’s top export partner while India remains the America’s 9th largest trading partner. Growth in exports, imports, and Foreign Direct Investment remains steady but is dependent on defense, Tech, commodities, and garment sectors. A number of adjustments are imminent, particularly in Tech, due to technological and political headwinds.

Agriculture technology (agtech) is a high impact growth segment of modern technology. In the midst of India’s Decade of Innovation, it is critical to focus on the opportunities in agtech. By doing so the economic interests of nationalist leaders with slogans like “Make in India” and “America First” can be realized through job creation in both nations.

India requires expertise in finding more efficient methods for food storage, processing and packaging, distribution, yield per farm and other advancements that the U.S., with its technological prowess, can provide through:

  • Big Data
  • AI/Machine learning
  • Drones; and
  • Robotics

The growing demand for natural/organic food lifestyles has led to alternatives to meats, milk, eggs, and other animal-based food products. Retailers such as Whole Foods, Trader Joes, Harris Teeter, Aldi, and Wegmans reflect this growth. India can leverage its historic use of plants and herbs for food to help lead the health food trend while expanding trade within America’s food and nutraceutical market.

India’s investors should be encouraging its start-up sector to expand in the nutraceutical-health-food sector, using its proprietary advantage, versus American commodity businesses–e.g. Ola for Uber, Flipkart for Amazon, Paytm for PayPal, etc. How about an Indian-based Beyond Meat, Blue Apron or Honest Tea, all unicorns with billion dollar valuations?

By focusing on its strengths and creating intellectual property around trending consumer demand for agtech, healthy food and nutraceuticals, Indian companies will experience huge growth opportunities.

https://www.forbes.com/sites/robleclerc/2016/07/05/the-next-phase-for-agriculture-technology/#3e8a178f6b88

https://ustr.gov/countries-regions/south-central-asia/india

https://www.brookings.edu/wp-content/uploads/2016/06/23-india-us-trade-investment-relationship-meltzer.pdf

https://www.fas.usda.gov/data/india-agricultural-trade-expanding-export-opportunities-amid-persistent-limitations

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THOUGHTS ON THE UPCOMING MODI-TRUMP MEETING

PM Modi is arriving in Washington, D.C. on June 25 for his first face-to-face meeting with President Trump. There is some concern over how this meeting will go given the fact that Trump singled out India and China’s environmental practices as one of the reasons for exiting the Paris Climate Change Accord.He also has had his ups and downs with foreign leaders.

My sense is that Modi and Trump will get along fine. Modi built a strong relationship with President Obama despite the administration banning him from visiting the U.S. when he was Chief Minister of Gujarat. Modi is a pragmatist and decided to move forward versus holding a grudge. Expectations are that he will apply the same pragmatism during his upcoming visit.

Following are my top five suggestions for PM Modi as he embarks on fostering a good relationship with President Trump:

  1. Talk about defense contracts: India is a top buyer of U.S. defense equipment so engage the President on past and future deals. Recall how the arms deal with Saudi Arabia was considered a big win.
  2. Offer assistance to reduce prescription drug costs in the U.S.: India is a low cost provider of generic medicine to the U.S. This puts India in a good spot to encourage more deals that reduce cost given Trump’s focus on healthcare policy.
  3. Point out that Indian companies have contributed to jobs in U.S.: Discuss how Infosys and other companies have recently created 10,000 jobs here. Remember it’s all about jobs, jobs and more jobs!
  4. Do not bring up H1b: President Trump was elected on the premise of offering Americans available jobs before those on a visa. Domestic politics usually takes precedent over geopolitical considerations.
  5. Do not bring up the Climate Change Agreement: Trump is not going to change his mind about exiting the Paris Climate Accord anyway. It’s a done deal and a promise he made during the campaign.

Modi’s visit is supposed to be low key but can be leveraged nicely as he’ll see President Trump again soon at the G20 Summit. Best wishes for a good dialogue!

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Connected Transport: The Digital Revolution in Motion

While there are significant differences in how transportation has been deployed over time globlaly, we are now at an inflection point in this sector commonly known as Connected Transport.

Connected transport is leveling the playing field in terms of developed and emerging economies through international cooperation, investment and implementation.

Many urban center civic leaders across the U.S., Europe and Asia primarily are experimenting with various aspects of connected transport through a ‘bottoms up’ approach. This is being accomplished through partnerships with technology giants, investors and transportation companies. Other cities are applying a ‘top down’ approach that links connected transport with broader initiaitives underway across Smart City technologies. “Transportation will play a key role within Smart/Conencted Cities” according to the U.S. DOT.

Connected transport refers to a set of technologies that include but are not limited to:

  • Autonomous vehicles for individuals, fleet and public transport
  • Freight and supply chain logistics technology renewal for rapid delivery of goods
  • Real time information availability exchange within and between vehicles
  • Safety devices and applications for drivers and autonomous vehicles
  • Networked road devices for optimal communication and efficiency
  • New, intelligent ‘super skyways’ with high speed vehicles for safe, rapid and environmentally sound travel

References

Driverless cars could lead to transport revolution – ABC News, Sept 2016 Reinventing Transportation –  Texas A&M Transportation Institute, Jan 2016
Dynamics of Smart/Connected Cities – The National Tranportation Systems Center – Oct 2015

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