Uber faces increased competition in China as top 2 rivals merge

Adam Westlake - Feb 15, 2015, 12:00pm CST
Uber faces increased competition in China as top 2 rivals merge

Bad news for Uber and its plans to break into the Chinese market has just emerged: the country’s two biggest taxi-hailing services have decided to merge. Didi Dache and Kuaidi Dache, each already strong competition to Uber on their own, have decided to end a years long rivalry and merge into a single business entity valued at roughly $6 billion. The smartphone apps from the two taxi-hailing services, when combined, are used by around 150 million people, making up 95% of the Chinese market.

It’s easy to see what brought Didi Dache and Kuaidi Dache to their senses, as San Francisco’s Uber, valued at $40 billion, made clear their intentions to increase their presence in China. Chinese search engine Baidu has even invested $600 million in Uber. The former domestic rivals have realized their efforts are better spent working together.

Didi Dache and Kuaidi Dache have said they plan to continue operating as separate brands, making co-CEOs out of the existing execs. The two services have received their own big budget financing from large Chinese firms Alibaba and Tencent, and, as TechCrunch notes, their alliance means they together stand a better chance at surviving any forthcoming government regulations on private taxi services.

It also appears that the war against Uber will take place across third-party apps as well. As part Uber’s funding from Baidu, services like Baidu Maps were integrated with the taxi-hailing app. Tencent, who previously invested in Didi Dache, is the creator of the WeChat messaging platform, which is very popular in China and now connects with Didi Dache’s own app.

VIA TechCrunch
SOURCE Reuters

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