Uber faces rough ride in second bout with Chinese giant
UBER and Didi Chuxing are again going head-to-head, this time in Estonia.
The Chinese giant with a multi-billion-dollar war chest is backing Estonia’s Taxify with a financial investment and support on technology developments, the companies said yesterday.
The partnership, Didi’s first major move into Europe, will give Taxify a boost to grow in cities from Prague to London and launch in cities including Paris in the coming months, founder Markus Villig said.
“It will be hard for Uber to be No 1 everywhere – we see each region will be dominated by a local champion,” Villig, who is also Taxify’s chief executive, said. “We’re focused to be No 1 in Europe and Africa.”
Last year, Didi bought Uber’s brand, business and data in China, drawing a truce to a bruising battle between the two for leadership in the country.
Didi has since expanded globally by sponsoring local players, and is already an investor in Grab, Uber’s biggest rival in Southeast Asia; Ola, the largest ride-hailing company in India; and Lyft, the main Uber rival in the US.
Taxify’s strategy is broadly to steal market share from Uber in cities from Tallinn, Estonia, to Joburg by focusing on driver pay and training, Villig said. Europe is promising in terms of possible regulatory easing that would unlock markets such as Germany and Scandinavia, while Africa has potential to dramatically grow in terms of number of rides, he said.
“Didi didn’t have a partner yet in Europe and Africa – that’s where we come in,” said Villig, who described Didi as largely a passive investor, whose investment doesn’t entail strategy or management changes at this point.
Despite a number of setbacks in Europe, Uber still dominates key markets, and has been working to win over regulators. It has recently been working with the Estonian Tax and Custom Board on a pilot project on taxation between customers and drivers.
Didi and Taxify declined to disclose the financials of the latest investment. Taxify had raised $2.4 million (R32m) prior to the Didi deal.
Uber and Didi Chuxing are competing – this time in Estonia.