Didi’s resurgence in Latin America. What next?
Didi is increasing investments in Latin America to boost growth ahead of an IPO in early 2025. Uber is increasing investments in response to maintain share.This move is not unprecedented. We have seen Lyft and GoJek make similar moves in the US and Southeast Asia prior to their IPOs. During that period, both companies and their competitors experienced short-term margin pressure.
However, competitive dynamics prevailed. There were minimal market share shifts, and the #2 quickly reined in investments to minimize unsustainable losses and industry profitability improved rapidly.
We expect this to play out again in Latin America. We see limited competitive threat to Uber. The most likely outcome is that the #3 in the market (Cabify, Bolt) will be squeezed out. There is a risk that Didi becomes the undisputed #1 in Mexico, but there is equal opportunity that Uber dominates in Brazil & Chile.
We see limited downside to expectations. Profitability in Latam may be under pressure, but it accounts for
Uber Technologies provides ride hailing services. The company develops application for road transportation, navigation, ride sharing, and payment processing solutions. The company serves customers in the United States and Canada, Latin America, Europe, Middle East, and Asia Pacific markets, excluding its discontinued China operations.
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