Uber vows to quell Didi Kuaidi chal­lenge

Car-hail­ing provider un­veils multi-pronged strat­egy for grow­ing its pres­ence in China

China Daily (Canada) - - LIFE - By GAO YUAN gaoyuan@chi­nadaily.com.cn

On­line car-hail­ing provider Uber Tech­nolo­gies Inc said on Wed­nes­day that it will up the ante in China from next year on­wards to quell the threat from lo­cal chal­lengers such as Didi Kuaidi.

The United States-based com­pany said its China arm will launch new ser­vices, ex­pand into more cities, make new in­vest­ments and ap­point its first China chief ex­ec­u­tive soon.

Liu Zhen, the “strate­gic of­fi­cer” who over­sees the com­pany’s China op­er­a­tion, said the San Francisco-based mo­bile ap­pli­ca­tion provider is trans­form­ing into a lo­cal­ized firm with many Chi­nese in­vestors, China-spe­cific prod­ucts and a lo­cal man­age­ment team.

“Uber is fully lo­cal­ized in China. Since other Chi­nese In­ter­net com­pa­nies also re­ceive over­seas in­vest­ment, we are no dif­fer­ent from them in cap­i­tal lev­els,” Liu said, dis­pelling doubts that over­seas tech com­pa­nies may find the go­ing tough in China.

In Oc­to­ber, Uber an­nounced a plan for $1 bil­lion in­vest­ment in the coun­try and set up an in­de­pen­dent China branch in Shang­hai, try­ing to play down its over­seas com­pany sta­tus.

Liu said both Uber and its China sub­sidiary will soon release the names of Chi­nese in­vestors. She did not give the ex­act date, say­ing it was sub­ject to the com­pany’s global team.

Liu also said Uber will an­nounce a China CEO more than a year af­ter it en­tered the mar­ket, but re­fused to pro­vide a timetable. Liu, who joined Uber in April, cur­rently leads the China op­er­a­tion.

Ex­pan­sion will be the buzz­word for Uber China in 2016. The com­pany is in cut-throat com­pe­ti­tion with Didi Kuaidi and other play­ers for pas­sen­gers and driv­ers.

Didi Kuaidi, backed by tech gi­ants such as Alibaba Group Hold­ing Ltd and Ten­cent Hold­ings Ltd, is op­er­at­ing in more than 100 cities while Uber only reaches 21 as of to­day.

Cities with more than 2 mil­lion pop­u­la­tion will be a po­ten­tial tar­get for Uber in the next year, ac­cord­ing to Liu. China has at least 250 cities that fit the size.

The com­pany said its mar­ket share in the chauf­feur ser­vices sec­tor grewfrom about 2 per­cent to 35 per­cent over the past nine months.

Didi Kuaidi also claimed a ma­jor­ity share, but both claims lack third-party sup­port.

Analysys In­ter­na­tional, a re­search firm that tracks on­line car-book­ing mar­ket, said Didi Kuaidi took more than 80 per­cent of the mar­ket

Since other Chi­nese In­ter­net com­pa­nies also re­ceive over­seas in­vest­ment, we are no dif­fer­ent from them in cap­i­tal lev­els.”

share while Uber, a re­mote No 2, con­trolled 16 per­cent at the end of the third quar­ter.

Didi Kuaidi’s high mar­ket share was driven by its large taxi driver base, a seg­ment that does not be­long to chauf­feur ser­vices.

ZhangXu, a re­searcher from Analysys In­ter­na­tional, said the reg­u­la­tors’ un­cer­tain at­ti­tude to­ward car-hail­ing apps will re­main the big­gest hur­dle for Uber, DidiKuaidi and their chal­lengers.

“The gov­ern­ment needs to an­nounce a clear pol­icy as soon as pos­si­ble to erase the un­cer­tainty in the mar­ket,” Zhang said.

Last month, the Min­istry of Trans­port pub­lished a draft reg­u­la­tion that ne­ces­si­tated pri­vate cars to un­dergo a strin­gent reg­is­tra­tion process be­fore be­ing given ac­cess to car-hail­ing apps. The draft had evoked wide­spread crit­i­cism.

Liu from Uber said both app providers and the reg­u­la­tors will need a less strict “Plan B” to re­solve the dis­agree­ment. But she ad­mit­ted that it would be a time-con­sum­ing process.

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