NO SMOOTH RIDE FOR UBER IN CHINA
making nearly 1 million trips daily in China. Kalanick also mentioned in the same letter that the company plans to expand into 50 more Chinese cities within the next year. According to Chinese business magazine Caixin, Uber is expected to raise several billion dollars in its current fund-raising campaign in China.
While Uber may be aggressively expanding in China, a recent survey by internet research institution CNIT shows that the US company commands only 11.5 percent of the market share. Didi Kuaidi, Uber’s biggest rival in China, is the leader with 80.2 percent. It is made up of two taxi-hailing firms, Didi Dache and Kuaidi Dache.
Jiang no longer drives for Uber. The 23-year-old quit about a month ago when she realized that the current subsidies aren’t enough to cover her fuel and maintenance expenses for her Audi Q5. She has since switched to Didi Kuaidi, saying she prefers the Chinese ridesharing apps because they allow her to decide whether to pick up a passenger based on her current destination. Didi Kuaidi also doles out attractive bonuses and subsidies, she added.
Another challenge for ridesharing services such as People’s Uber and Didi Kuaidi is their legality. In the eyes of the authorities, private car owners are breaking the law if they earn income from offering transportation services without a taxi license.
Likewise, the Ministry of Transport in China has not given the nod to such private car services. Since November 2014, Shanghai authorities have investigated more than 180 private car owners for using car-sharing apps to shuttle passengers. Uber’s Guangzhou and Chengdu offices were also investigated by Chinese authorities in May, though the app has yet to be officially banned in China.
Shanghai police launched another clampdown on ridesharing apps across the city on the night of July 17. Fifteen drivers were under investigation for running illegal car services using online apps.
According to local website thepaper.cn, these drivers will be fined up to 10,000 yuan and have their driving licenses suspended for three to six months if they are found guilty. The companies of these ridesharing apps will also be fined 100,000 yuan each.
“New things and new technology tend to be questioned in the beginning. But as time passes by, the questions will be gone,” said Yin, adding that Uber also runs other services — UberBlack, UberXL, UberX — with legitimate local car rental companies.
In what could be a further blow to Uber’s ambitions in China, Shanghai’s transport department on June 1 launched a taxi information platform in collaboration with Didi Kuaidi’s taxi-hailing service. This is the first official collaboration between a ride-sharing company and authorities in China, and according to the department’s website, further collaboration on ride-sharing services may follow.