With just $7m, this startup is challenging Uber in Australia

Photo credit: Chris Betcher

Competitors to Uber’s ridesharing crown have been busy throughout Asia, whether it’s Didi Kuaidi in China, Ola in India, or Grab in Southeast Asia. Now it’s time for a new challenger to take on the US-based multicorn (is that acceptable vernacular by this point?), and this one’s in Australia.

GoCatch stresses it won’t use Uber’s surge pricing model.

Sydney-based taxi booking app GoCatch is launching a ridesharing component, the company announced today. Much like Grab’s GrabCar service, GoCatch users will be able to hail a GoCar from within the GoCatch app, getting access to private cars for point-to-point transportation. GoCatch says it will do this while eschewing established practices like surge pricing.

“There are no other players in ridesharing [in Australia at the moment],” GoCatch CEO Ned Moorfield tells Tech in Asia. “We think it’s possible for a local player to achieve similar success to what Grab has achieved in Southeast Asia and Lyft in the US – to be a strong local competitor to Uber.”

The five-year-old startup has been steadily growing in Australia through its taxi-booking service. It currently has 350,000 passengers on its platform and processes 100,000 bookings per month, according to Ned. More than 35,000 taxi drivers are currently registered on it.

Fighting a giant

GoCatch hopes to take on Uber with a number of different weapons. For one, it stresses it won’t use the surge pricing model implemented by the US firm, where large demand leads to inflated prices, attracting more drivers to the affected area. “People really resent surge pricing in Australia,” Ned says. “We hear from a lot of drivers that when surge pricing is on, people stop using the app and liquidity dries up.”

To combat this, GoCar will have clearly defined peak and off-peak rates, peak being weekday morning commutes and weekend evening to early morning rides, he explains. “We think that’s going to help have more supply during those times,” he says.

GoCatch CEO Ned Moorfield. Photo credit: GoCatch.

GoCar will also charge drivers a lower commission – 15 percent versus Uber’s 20 percent – while fares will be 20 to 30 percent cheaper than taxi off-peak fares and 10 to 15 percent cheaper than taxi peak fares. GoCatch says it will pay drivers daily instead of weekly, as Uber currently does.

More significantly, GoCatch is counting on the image of a local competitor versus an international powerhouse as an advantage. “We’ve seen second local players in other markets like Singapore and we think people respond well to a local choice, and to the fact that we’re a 100 percent Australian-owned company and we pay our fair share of taxes here,” Ned says.

GoCatch is counting on the image of a local competitor versus an international powerhouse.

Uber is currently locked in legal battle with Australia’s Federal Court over whether its drivers should pay goods and services tax (GST). Ned feels the customers will respond better to a local company that contributes to the country’s taxes. Still, GoCatch will not prevent GoCar drivers from operating as Uber drivers at the same time, he says.

It’s all legal

Local player, regional partners