![Cabcharge and goCatch are finding out that Uber is a formidable competitor.](/content/dam/images/g/q/w/a/d/2/image.related.afrArticleLead.620x350.gr18j8.png/1472456896613.jpg)
Imagine trying to take on a company which has billions in the bank, no pressure from the public markets to perform and an absolutely fearless attitude towards regulators and governments.
This doesn't require a huge leap of the imagination because that company exists. It is called Uber Technologies, it has a gigantic valuation, a multi-billion war chest and it continues to cut a swathe through Australia's personal transportation market.
Last Friday, ASX-listed Cabcharge posted a 45 per cent decline in profits for the 2015-16 financial year, and its shares, which have fallen sharply since Uber arrived on these shores, tumbled another 10 per cent.
Cabcharge said its recovery plan would involve an overhaul of its digital services to better compete with Uber.
![Ned Moorfield, founder of goCatch, abruptly vacated his position as CEO and moved to the US.](/content/dam/images/g/n/0/e/c/b/image.imgtype.afrArticleInline.620x0.png/1472441992211.jpg)
Or how about GoCatch, the taxi booking app with a star-studded shareholder register that has attempted to position itself as the key app-enabled ride-hailing alternative to Uber in this country?
To say the past few weeks have been tumultuous for GoCatch would be an understatement. First, the company's original CEO Ned Moorfield abruptly vacated that position amid rumours of an acrimonious dispute with co-founder Andrew Campbell.
Then, as first reported by Fairfax Media's Adele Ferguson, the company embarked upon a surprise $3 million capital raising from existing shareholders and at a deep discount to its then valuation of $20 million.
Moorfield has since relocated to San Francisco and couldn't be reached for comment. His replacement, David Holmes, was keen to praise his contribution to the company. "Ned is fantastic, a very good entrepreneur," he said. "We would not be here without him."
Holmes confirmed the company had secured $3 million from existing shareholders in recent weeks. The raising was "oversubscribed", he said, although not all shareholders took up their rights.
![GoCatch has attempted to position itself as the key app-enabled ride-hailing alternative to Uber in Australia.](/content/dam/images/1/m/a/z/q/q/image.imgtype.afrArticleInline.620x0.png/1427684104317.png)
The company is burning through cash, but he said the funds would be used to expand its services, particularly its ridesharing product, which is already live in Sydney and will soon come to Melbourne and Brisbane after governments in both cities paved the way for legal services there.
"Our model works and we are now aggressively expanding into other markets," he said. "The biggest problem I've got is that not enough people know about us."
Uber's challenges
The funny thing is, while Uber appears to be on an absolute roll in Australia, its path to world domination has in recent weeks become a bit more complicated.
We're not even talking about self-driving technology here, which could be a complete game changer and the subject of an entirely separate column.
Depending upon who you listen to, Uber either secured, or was forced into, a significant tactical retreat in China, a hugely lucrative market where it had been burning through significant amounts of cash.
Earlier this month, it agreed to merge its operations in the country with dominant player Didi Chuxing, a member of the global anti-Uber alliance that has formed in key markets, and which happens to count Apple as a shareholder.
Last week, media outlets reported Uber had lost at least $US1.2 billion globally in the first six months of the year. According to Bloomberg, which broke the story, subsidies to drivers accounted for the bulk of the losses.
This is not shocking to anyone that has followed Uber's progress. The company is effectively engaged in a price war with competitors, and investors have been prepared to back this, because if Uber outlasts its rivals, it would have the market for personal transport to itself, and would surely become a tremendously profitable enterprise.
Yet, the key question in ridesharing remains: is this a winner takes all industry? GoCatch for its part, is betting that it isn't.
"We are of the strong belief that there is room for more than one player in this market," says Holmes. "We don't share Uber's binary view that ridesharing is better or worse than taxi, it's just different."
While consumers clearly like Uber, the global experience suggests drivers are less enthused. And since they aren't employees of the company, it is hard to stop them driving for anyone else. That could hint at the path forward for competitors such as goCatch.
Failing that, the company could pursue a tie-up with another member of the global anti-Uber alliance, such as Singapore based Grab (previously known as GrabTaxi) – as rumours in Sydney's close knit start-up community suggest.
"We talk to everyone, but not about acquisitions," Holmes said "There is a lot to be learned about what's going on in other markets. I like GrabTaxi, they have done a very good job."
AFP