Uber faces rough ride in sec­ond bout with Chi­nese gi­ant

The Star Early Edition - - COMPANIES - Bloomberg

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.

PHOTO: AP

Uber and Didi Chux­ing are com­pet­ing – this time in Es­to­nia.

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