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Uber gets a run for its money in China

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The mention of Uber spells convenience and efficiency, at least until recently. Before, the online transportation network company headquartered in San Francisco was facing legal charges across continents which really was hurtful to the company’s thrive.

Not so long ago, rumors were going round that the company would shut down from a financial deflation caused by the many incentives and discounts offered by Uber. The company seems to have pulled out a safety card but China has proved hard to hack at least competition wise. Didi, a Chinese transportation network company headquartered in Beijing is giving the company a run for its money.

China being extremely tolerant of taxi disrupters regardless of their local or foreign roots, Uber is not facing regulatory mismatches which means less law suits compared to other states. However, the company is not content with the “Unfair Competition” between taxi hailing companies in China.

Didi, a strongly backed up company in the country provides vehicles and taxis for hire via smartphone. The company was formed from the merger of rival firms Didi Dache and Kuaidi Dache backed by the two largest Chinese Internet companies, Tencent and Alibaba respectively.

Apple too, recently injected invest $1bn into the company funds that have given the Chinese originated company a head start in service execution. The investment is both the US group’s largest minority investment that also marks a departure from its historic aversion to tapping this to invest in start-ups.

Didi handles more than 11 million rides each day in 400 cities in China. The company offers services that include taxi hailing, private car hailing, Hitch (social ride-sharing), Chauffeur, DiDi Bus, DiDi Test Drive, and DiDi Enterprise Solutions.

As the leader in China’s sharing economy initiative, DiDi completed a total of 1.43 billion rides on its platform in 2015, while applying its big-data capabilities to solving the country’s transportation and environmental challenges. In February 2016 DiDi became the world’s second largest online transaction platform, next only to Alibaba.

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The success and firm foundation is hurting Uber’s business. The expensive battle for market share has seen Uber invest extra on recruiting drivers and subsidizing customer fares.

The company is currently in partnership with the Chinese search giant Baidu and is spending heavily to acquire customers and drivers in the Chinese market.  Whether Uber can sail through  the outpace Didi in the driverless-car race (both companies have hinted on)  will be key.

 

 

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Melissa Daniels
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