Didi-Lyft merge marks new monopoly in China’s ride-sharing market
In light of the latest ride-sharing shakeups and hookups, Uber’s fate hangs in the balance in China
Things are shaking up in the taxi app market, with so-called David Didi Kuaidi and Goliath Uber seeing interesting developments.
Lyft is Uber’s biggest rival in the US. Didi Kuaidi is Uber’s biggest competitor in China.
Lyft and Didi Kuaidi have joined forces in a “global ridesharing alliance,” announced a press release on September 16, bringing Lyft into China and Didi Kuaidi into the States.
The deal allows Lyft users to use the app in China to access local transportation services and vice versa. It is set to go into motion next year.
“We are partnering with China’s largest rideshare company, Didi, to make it easier for people to get friendly, safe and reliable rides when they travel between the US and China,” Lyft stated on its blog.
As part of the deal, Didi Kuaidi has also invested US$100 million in Lyft.
Uber has long been trying to break into the mainland market. CEO of Uber Travis Kalanick said in a leaked memo in June that China was the team’s number one priority.
According to the International Trade Administration, in 2014, over two million people travelled from China to the US. And 5,694,000 US residents travelled to China. With these numbers estimated to rise, it is a lucrative market for any ride-sharing platform to tap into.
Funding, funders, familiar logos
Aside from teaming up with Lyft, Didi Kuaidi has been making headlines for the last week, where a number of things unfolded. First, the announcement of its funding: Didi raised US$3 billion in a funding round last week. Its investors include Alibaba Group and Tencent.
Meanwhile, Uber China raised US$1.2 billion to expand in China, with funding from lead investor Chinese search engine giant Baidu.
Then came the unveiling of Didi’s new logo, as part of its rebranding efforts.
The debut raised a few eyebrows, for those who noticed the similarity straight away. The new logo, with the letter ‘D’ rolled over on its curve with a small chunk taken out the right-hand tip, reminded many of rival Uber’s logo.
Can Uber make a comeback in Asia?
Although Uber is the unstoppable giant of a unicorn in the US, it has seen its fair share of woes in foreign markets such as India, France, Spain, Indonesia and lately, China and Hong Kong.
Also Read: Uber offices raided in Hong Kong, five arrested
Uber had a bigger chance of being a main player in the mainland before Didi Kuaidi became what it is now. In February, Didi Dache had merged with its then biggest competitor in the mainland, taxi-hailing app Kuaidi Dache, leading to a near domination of the taxi-hailing business there.
This is not the first time the Asia market has proved hard for taxi-hailing services to survive. Brazil-based Easy Taxi is said to be scaling down operations in Singapore. Last year, it closed operations in Hong Kong due to competition from Kuaidi Dache (pre-merger).
Also Read: Easy Taxi caves in to rivals; bows out of Singapore’s e-hailing market
Perhaps Uber’s one chance of survival is to explore a similar union or offer promotions to compete. For Singapore’s upcoming Forumla 1 event, both GrabTaxi and Uber are offering free supercar rides. Apart from the big players, there are other ride-hailing apps in Asia for Uber to consider partnering with.
In Singapore, GrabTaxi was polled to be the most popular, after local app, Comfort-Delgro. Uber came in third for taxi bookings. Last year, GrabTaxi launched GrabCar, similar to Uber’s Black programme.
All competition aside, the effects of this development will certainly have an impact on the traditional taxi service in China.
We have reached out to Didi Kuaidi for comment. At the time of publication, none were forthcoming. Stay tuned for updates.
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