Mexico City is about to become the setting for a ride-hailing demolition derby.
Didi Chuxing (滴滴出行), the Beijing-based behemoth that drove Uber Technologies Inc out of China, said it will butt heads with Uber in Latin America’s biggest metropolis, starting as soon as next month.
A Mercedes Benz-owned start-up called Beat said it is muscling in, too, with its own launch planned by March next year.
Photo: Reuters
“We want to be ruthless,” Nikos Drandakis, Beat’s 55-year-old cofounder and chief executive, said in a telephone interview. “We’ve got what it takes to carve out a sizable piece of the Mexico City market.”
Drandakis’ firm has become the go-to ride-sharing app at home in Athens and in Lima, but it has never gone head-to-head with deep-pocketed Uber or Didi in a market that really mattered to them.
Mexico City is a prize because the densely populated metropolis of 21 million has inadequate public transport and plenty of people who need supplementary work, which means willing drivers.
“This is a big market and it’s a good market, because mobility is such a big problem here,’’ said Fernando Paez, a transportation consultant at the World Resources Institute in Mexico City.
Drandakis and three friends started Beat in Athens in 2011 as a taxi-finding app during Greece’s debt crisis. At first, they had to recruit drivers by handing out leaflets on the street.
However, the business took off once drivers saw it actually helped them get more passengers.
Now, about one-third of the city’s 3.1 million people use the service, Drandakis said.
In 2014, Drandakis expanded to Lima, where Beat started offering its service to drivers other than cabbies and became the No. 1 car-hailing app, doubling rides every year and outcompeting Uber, which started in the city at just about the same time.
Last year, the company was bought by Mercedes Benz-owner Daimler AG, which paid about US$45 million and left Drandakis in charge.
Since then, Beat has quadrupled in size to 400 employees and rolled out in Bogota and Santiago, where it signed up more than 1 million users in its first year.
Now comes Mexico City, a much bigger challenge, because Uber has already built a commanding lead there and Didi is also angling to break in. Beat actually tried the city once before, in 2014, but lack of funds forced it to withdraw.
Armed this time with Daimler’s money, Drandakis in June sent a team of five staffers to the city to figure out how to tailor their service to the market.
Moving between neighborhoods to get a feel for the whole place, they rode with Uber drivers and talked to riders to see how they could pull them away.
Drandakis would not say what they found out.
However, he said he hopes to recruit thousands of drivers before launching, and build an on-the-ground team of 40 to 50 people including marketing reps and pricing specialists.
The plan is to be the No. 1 ride-sharing company in the city within three years, he said.
“We’re smaller, but we’re more agile and capable of innovating faster than our larger global competitors,” he said.
Within a few months of the Mexico City rollout, Drandakis plans to launch in Guadalajara, Monterrey and Colombia’s Medellin and Cali.
By 2022, he wants to be in every major city in Latin America.
“We have the resources and capital to do it, and we have the know-how,” he said.
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