Easy Taxi, the Rocket Internet-backed rival to Uber and others, has aborted plans to launch in India and ducked out of two other markets in Asia.
All the money going into Asia’s taxi app business over these past few months have cranked up the competition and sent prices dropping, and this is the first evidence of a company taking a conservative approach to that challenge.
Tech In Asia reported the market withdraws today, and an Easy Taxi spokesperson confirmed it with us too:
Easy Taxi confirms that it is scaling down operations in Hong Kong and Indonesia in order to focus on other core markets. The app will continue operational in these countries as long as service levels are acceptable, and we are providing any necessary support for our local partners. India was not yet fully operational and we have simply decided not to continue pursuing the full launch.
The Brazil-headquartered company isn’t just active in Asia, its app covers over 160 cities in more than 30 countries with a particular focus on emerging markets, as is often the case with Rocket Internet firms.
Easy Taxi added that it will “occasionally adjust our footprint” in other markets, which could suggest that it is not prepared to play the aggressive price reduction game that is going on in many places. In India, for example, SoftBank led a $210 million round in Ola, freshly minted Uber recently ran an aggressive five-day period of free rides nationwide, and half a dozen other domestic firms also compete.
Competition is also hot in Southeast Asia. SoftBank invested $250 million in GrabTaxi, which serves six markets in the region including Indonesia’s capital city Jakarta, while Hailo is a rival in Singapore and Japan with plans to expand in time.
These mega funding rounds make the $40 million Series D round that Easy Taxi raised in July seem paltry, particularly when you consider that the sum was put towards expanding operations in both Latin America and Asia.
So far, Easy Taxi has raised a total of $77 million from investors — that’s a very small portion of the wealth that its rivals in Asia have gathered. Much of that capital is being put towards price reductions and other incentive programs as each company tries to undercut its rivals.
Rocket Internet-backed companies aren’t adverse to pulling out of markets where they don’t feel the numbers play in their favor — remember how it ran from Turkey overnight back in 2012? — and now Easy Taxi is showing that the race to win in Asia is a capital-intensive affair.