Uber rival Gett may exit US amid rising costs

TEL AVIV • Gett, the ride-hailing app that competes with Uber Technologies, is weighing an exit from the United States, just over a year after spending US$200 million (S$273 million) to enter the market.

The Israeli tech company may sell Juno, the New York-based start-up that it bought in April last year, said people familiar with the deliberations, who asked not to be named. Juno represents the bulk of Gett's US operations.

There is no guarantee that Gett will sell Juno, the sources said, adding that alternative options are still being considered.

The reason for the withdrawal stems from a struggle to contain rising costs at Juno, the sources said. However, a person with direct knowledge of the company said Juno made a profit in the first quarter of this year, and that Gett aims to be profitable in the first quarter of next year.

The retreat from the US would be an about-face in Gett's attempt to bolster its chances against the world's largest ride-sharing platform. Juno operates only in New York, competing with Uber, Lyft and Via Transportation, and previously had plans to expand into other US cities.

Gett, whose investors include Volkswagen, started considering plans to exit the US after muted interest during a recent funding round, the sources said.

  • US$80m

    Amount raised by Gett last month, well below the US$500 million that the company was seeking just a few months before.

Gett raised US$80 million last month, well below the US$500 million that the company was seeking just a few months before.

Outside the US, Gett is focused on Russia, where it competes with the combined operations of Uber and local provider Yandex. It is also available in Britain and in its home market of Israel.

Its investors include billionaire Len Blavatnik's Access Industries and Swedish fund manager Vostok Nafta Investment.

Once seen as a viable challenger to Uber and Lyft in New York, Gett attracted more than US$300 million from Volkswagen in 2016. Since then, the German carmaker has changed focus to funnel resources into its home-grown mobility unit called Moia and other operations.

Gett, which currently operates in more than 100 cities, would not be the first to scale back plans for global expansion. Didi Chuxing muscled Uber out of China, as Grab did the same for South-east Asia.

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A version of this article appeared in the print edition of The Straits Times on July 16, 2018, with the headline 'Uber rival Gett may exit US amid rising costs'. Print Edition | Subscribe