FOREIGN internet giants often struggle in China. Facebook, Twitter and Google are largely irrelevant on the mainland. Uber, an American car-hailing app that is conquering markets everywhere else, is also finding China hard to crack. But unlike those other tech titans, the taxi disrupter is not being frozen out by unfair Chinese regulations favouring local firms. Uber’s biggest problem is that it has encountered a world-class local upstart.
Didi Kuaidi was forged last year by the merger of rival taxi-hailing apps controlled by Alibaba and Tencent, two Chinese internet giants. It now dominates China’s online market for personal transport. Last year it arranged 1.4 billion rides in China, more than Uber has done worldwide in its history. It has perhaps two-thirds of the market for private-car service (the source of most of its revenues) and provides a taxi-hailing service in several hundred cities. Uber has a strong presence in only a handful of Chinese cities, though this week it said it will expand to cover 55 of them. Both have spent heavily on subsidies to lure drivers to sign up.
Unlike Uber, which in China focuses on private-car...Continue reading
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