This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

All the technology companies, which compete in different parts of the world, attract customers at any price, to the point of taking losses per trip.

In the business model of mobility platforms, such as Uber and Cabify in Spain, there is a maxim that is imposed: capture and grow in the largest possible number of customers to dominate greater market share than your rival. An objective that until now has been tried to fulfill at any price, losing money for each trip that is made.

In this dynamic has been imposed a strategy that has been to lower the prices of travel based discount coupons, specific promotions and even - although in a phase still to be further developed - loyalty programs to retain passengers in the platform and prevent them from jumping on the competition.

Uber and Cabify have done it in Spain, to the point of offering free trips for a full day. They offer promotions to attract customers, although it seems that the intensity will change in the coming months.

This has been advanced by the Californian platform, present in more than ten Spanish cities. It has already announced, after the presentation of its last accounts in the United States, that the fever of the discounts has the days counted. Its large losses (1.01 billion dollars) force the belt to adjust now that it is listed, where investors can punish the company.

It was Nelson Chai, Uber's Finance Director, who warned. He noted in a conference call that they will reduce promotions to customers, in addition to marketing expenses in relation to revenue. The objective is to do it facing the second quarter, when they hope that the red numbers are not so striking.

Uber announced that it would reduce the fever of the discounts after the presentation of its last results

At the moment, in Spain, no immediate changes are announced. Sources of the company clarify that the marketing department works with two lines: the one of plans of big discounts, like Uber Airport, in which the campaign is fully identified, and concrete plans, in which the discounts are offered based on the type of user (if it is your first trip or not, for example) or the group to which it belongs.

The company directed by Dara Khosrowshahi extends its discounts to its modality of Uber Eats, the home delivery division of food. Their promos here do not have much mystery: they must be placed before placing the order, they can not be combined even if they accumulate and must be used depending on when they expire, forcing the user to exchange the coupon that previously expires and not the most beneficial one.

Cabify opts for a 'more for more'

Cabify, whose presence in the cities of Spain is very similar to that of Uber - except in the case of Barcelona and Valencia both compete in Madrid and in different areas of Andalusia - has not lowered the pace of promotions, aware that it influences the margins of the business, which are already narrow.

Cabify Discount

One of the most common promotions of Cabify is the discount on the first trips and the promotional codes to invite more users to download the app.

In a new line, still in the test phase - users enter the program by invitation -, the Cabify Plus plan has been launched, with a formula of more for more: offering more discounts to the users as long as it increases the number of travels.

The program consists of three levels: Plus, Silver and Gold. Nothing else to register the client is Plus and, depending on how many trips are made in a period of three months, you can jump to one level or another.

Uber and Cabify also compete in 'discounts' with platforms like MyTaxi

Both Cabify and Uber do not fight only among themselves in Spain; they also do it with some taxi applications, since the enemy sector can compete in the pre-contract mode, unlike the freehand one.

Thus, Free Now, formerly known as MyTaxi, usually makes available 5 or 10 euro bonds per trip, and even discounts of up to 50%. His commercial aggressiveness has even led him to court in Barcelona, ​​where he emerged victorious after being sued for unfair competition.

Lyft and Didi also burn money based on promotions

The struggle for mobility is worldwide. The dynamics that Uber and Cabify have implanted in Spain is not different to that of other companies, such as Careem, Lyft or the Chinese Didi, which operate in the rest of the world.

Didi, better known as the Chinese Uber, launches aggressive discounts when it lands in a new city.

For example, the American Lyft, which in the gossip sector has always been placed as a buyer of Cabify in the future, subsidizes travel in percentage, fixed and also through a flat rate.

Also playing strong Didi, known as the Chinese Uber, who usually throws batteries of discounts when he lands in a territory, something that has made clear on his arrival in cities like Mexico.

In addition to the striking promotions, the Asian company has accompanied these announcements with promises of high fixed salaries to drivers in a country where low salaries are common.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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