Uber News: Why is Uber losing big time in China?
The transportation war has become increasingly brutal in China, with Uber playing catch up since its launch in 2013.The San Francisco-based taxi-hailing company is burning $1 billion to compete against its number one rival DidiChuxing (formerly DidiKuaidi).To put that value into perspective, $1 billion is approximately how much Uber earned per year in its top 30 cities around the world.Didi, heavily armed with financing from local tech giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd., is dominating the market. DidiChuxing raised about $2 billion in its latest round of funding, Bloomberg News reported.
Apple also jumped in, pumping $1 billion into Didi recently. Apple CEO Tim Cook told Reuters that this investment is a way to boost the company's presence in China.Both Uber and Didi are putting up a costly fight in a bid to attract more drivers to sign up through subsidies and to attract more passengers through cash back deals. But it's more than just a money game.
Unlike Uber, which focuses on private-car rides in China, Didi allows users to be picked up by taxi, private car, shared car, shuttle van or bus. The average employee in Beijing travels 15 km to work, which takes about 44 minutes at an average speed of 20 kmh, according to a research report by HSBC. "There is a significant transport vacuum across China as the experience on local buses, subways or taxis is generally poor," Herald van der Linde wrote in that report.Didi is casting a wider net both in terms of geographic coverage and commuting options, and it's working out so far. The company said it handles more than 11 million rides a day. Meanwhile, Uber logged only 1 million daily rides in China in 2015.
