20 to 30 members of Malaysian team told they would be laid off
Company withdraws from India, Hong Kong and Indonesia; regional executive leaves
FOLLOWING reports that Rocket Internet-owned Easy Taxi has bowed out of three markets in Asia, Digital News Asia (DNA) has received information that the company’s Malaysian operations have also been downsized.
Nizran Noordin, chief executive officer and founder of TaxiMonger, confirmed with DNA that two soon-to-be-former employees of the company had approached him on Thursday (Dec 18) regarding job opportunities with his rival taxi app startup.
He said the duo reported that approximately 20 to 30 members of their team were informed on Dec 17 that they would be let go at the end of the month.
Requests to Easy Taxi for verification and further comment about its Malaysian operations were not answered as at press time. DNA has also reached out to parent company Rocket Internet for comment.
In a statement released to Josh Horwitz at Tech in Asia, the company said it had made a decision to “focus on core markets” to explain its withdrawal from India, Hong Kong and Indonesia.
“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 company said.
It is also understood that Mario Berta, regional managing director for Easy Taxi in South-East Asia, is no longer with the company.
EasyTaxi confirmed Berta's exit from the company, adding that he had left two months ago and was not involved in the current round of downsizing.
Easy Taxi’s scaling down comes amidst the backdrop of recent high-profile rounds of funding secured by regional and global competitors.
On Dec 4, Malaysian-founded but Singapore-headquartered GrabTaxi announced it had secured additional funding amounting to US$250 million from SoftBank unit SoftBank Internet and Media Inc (SIMI), bringing the total amount it has raised to date to more than US$330 million. It is currently active in 17 cities across six countries in South-East Asia.
On the same day in a different time zone, global competitor Uber, which is active in 53 countries, announced it had raised a new US$1.2 billion round of financing, with investors valuing the company at US$40 billion.
Industry watchers have long pointed out that the e-hailing space is one defined by high capital expenditure requirements, and a stomach for losses as the war for the market share and the hearts and minds of consumers is waged.
In comparison, Easy Taxi had raised US$77 million to fund its global footprint of 162 cities in 32 countries, with the latest round of US$40 million secured in July led by the Russian Phenomen Ventures and with the participation of Tengelmann Ventures.
It is uncertain if Rocket Internet will pump in more funds into Easy Taxi to further fuel or sustain its operations in its current markets.
The Berlin-headquartered company had its initial public offering (IPO) on the Frankfurt Stock Exchange on Oct 2. Bloomberg reported that it was Germany’s biggest IPO since 2007, which priced the US$42-billion sale “at the top end of its range and turning founders Samwer brothers into billionaires.”
The stock opened at €42.50 (US$52.19) and immediately fell to €38 (US$46.67), closing on opening day at €37 (US$45.43), down 13%. The shares traded below the issue price for most of the weeks following the IPO, putting the company’s gross proceeds from the listing exercise at around US$1.74 billion.
Jon Russell (pic), a writer for technology news blog TechCrunch and long-time watcher of the region’s startup sphere, said that given the vast budgets and funding rounds of many of its rivals, the “cautious move” to withdraw from certain markets makes sense.
Asked by DNA to share some insight into wider industry ramifications, he said that taxi-booking apps typically don’t reveal user numbers or much business data, however “there isn’t much evidence to suggest that Easy Taxi has a strong position in any market in Asia.”
“Easy Taxi doesn’t enjoy a dominant position in any market in South-East Asia, so even before today’s news, you’d be hard pushed to say that South-East Asia is anything but a two-horse race, although Hailo has entered Singapore and has some interest in expanding into other markets in time,” he said.
Russell said that Rocket Internet takes a data-based approach to managing its business – both in terms of investing and scaling back.
“Given the sheer scale of investments in many of Easy Taxi’s rivals in Asia, we’ve reached the point of ‘go big or go home’ in some markets.
“I think the fact that Easy Taxi is in over 160 cities in more than 30 countries means Rocket Internet will adopt a more global focus to identify more nascent markets – where its resources will go further and with less competition,” he said.
Statement from EasyTaxi:
“In a move to consolidate our resources to better reflect current business needs, we are undergoing a rationalisation exercise to realign our resources in Malaysia, in line with our business objective to achieve greater operational efficiency while focusing on maintaining customer satisfaction.
Since Easy Taxi’s establishment in Malaysia in 2013, we have made great progress in the country and we wish to reiterate that Malaysia remains one of our key strategic markets in the region.
Globally, Easy Taxi is a well-funded entity and remains as the world’s largest mobile app to book a taxi with presence in 33 countries and more than 170 cities. Given the sheer extension of our footprint, it is therefore natural that within each geography we may occasionally expand and/or reduce local operations according to several factors of relevance to our business.
Because of strategic and confidentiality reasons, we cannot provide information regarding where or when such moves will take place, except that we remain committed in delivering the highest service quality in the markets we operate in.
Moving forward, Easy Taxi reiterates that we shall continue to reinforce our growth in Malaysia and the region, through our cohesive strategy of growing our drivers and passengers base.” – Joon Chan, regional managing director, EasyTaxi Southeast Asia
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