Uber's Ignited 'Super App' Dream, and the Meaning It Holds Inside?[Next.Jjin]

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] 'Super Application (App)'. This is the goal that the world's largest ride-hailing company Uber has brought up again this year. It means integrating all services into one app so that users can book, pay for, and use cars, airplanes, hotels, and more within the Uber platform. Dara Khosrowshahi, Uber's CEO, announced the super app plan one year after moving from Expedia in 2017, but it is only now, three years later, that the plan can be revived?due to COVID-19.

According to Bloomberg and others on the 13th (local time), Uber plans to add train, bus, airplane, and rental car services to its UK app this year. Starting as a pilot service, Uber intends to expand to other countries once the business stabilizes. Jamie Heywood, head of Uber UK, revealed this last week, saying, "Customers have been able to book bikes and scooters through Uber over the past few years," and emphasized, "Uber will become a 'one-stop shop for travel.'"

Until now, Uber created separate apps for each service rather than providing multiple services in one app. For example, users had to use different apps for ride-hailing, food delivery, or scooter and bike rentals. However, CEO Khosrowshahi judged that increasing the time users spend on the app is important, so he set a strategy to bring all services into a single app.

Partnerships Are Key... Joined Hands with Taxis

Uber's super app strategy centers on 'forming partnerships.' This means Uber does not operate the services directly but acts as a connector. For example, if Uber offers train booking services in its app, it partners with train operators to facilitate bookings but does not issue tickets or operate the service itself. Without partners, Uber's super app would be impossible. Uber takes only a small commission in this process.

Heywood said Uber continuously strives to secure partners. He mentioned potential collaborations with aggregators like Trainline, Skyscanner, and Expedia, which collect and provide information on products or services from multiple companies on a single website. Some interpret that Uber, which has not made significant profits from its mobility business, finds it difficult to operate travel services directly and thus aims to generate revenue by leveraging its platform. In other words, Uber intends to be a platform, not an online travel agency.

[Image source=AP Yonhap News]

Uber's efforts to secure partners also apply to taxis. Uber is famously known for its tense confrontations with the global taxi industry, including in South Korea. However, last month, Uber partnered with New York's iconic yellow taxis. Now, 13,600 yellow taxis in New York can be booked through the Uber app. Discussions are also underway for partnerships with taxi companies in San Francisco, where Uber's headquarters are located. Including taxi industries in Spain, Germany, Austria, Turkey, Hong Kong, and others with which Uber has already partnered, Uber has expressed its ambition to add all taxis worldwide to its app by 2025.

'Latecomer' GoTo Thrives with Super App... What About Uber?

When discussing Uber's mobility business, we cannot overlook Indonesia's GoTo Group. Founded one year after Uber in 2010 under the name Gojek, it started ride-sharing services in Indonesia and rapidly grew in Southeast Asia, where mobile payments and booking cultures spread. The success of Gojek was due to its super app. By integrating over 20 services, including ride-sharing, delivery, and online shopping, into one super app, it established itself as an app-based economic platform.

[Image source=Reuters Yonhap News]

It then expanded to neighboring countries such as Vietnam, the Philippines, Thailand, and Singapore, becoming Indonesia's first decacorn (a company valued at $10 billion) with support from Google and Alibaba Group. Last year, it merged with e-commerce company Tokopedia to form the GoTo Group holding company. On the 11th, GoTo went public on the Indonesian stock exchange, raising $1.1 billion. This was the third-largest IPO in Asia and the fifth-largest IPO worldwide this year.

The market expects GoTo to grow further, considering the growth potential of Southeast Asia, including Indonesia. Uber's environment is somewhat different, as it operates mainly in developed countries like the US and Europe. There are many forces opposing Uber's growth. At an investor briefing last month, CEO Khosrowshahi said Uber would achieve annual growth of over 20% in its existing mobility sector while integrating all taxis worldwide into its platform and diversifying travel-related products. We will closely watch whether Uber's super app strategy will succeed.

Editor's Note[Next.Jjin] means 'looking ahead to the real next of business' and is a section delivering overseas news on future businesses such as metaverse, artificial intelligence (AI), robotics, and startups of major companies. We will uncover and explain both major visible issues and small but important hidden issues in an easy-to-understand way.