Uber seems to be getting its butt kicked in China

Didi Kuaidi’s new president, Jean Liu, is helping the app keep its lead over Uber in China. Photo: Shawn Koh

Uber and its Chinese rival Didi Kuaidi are locked in a billion-dollar battle to control the world’s largest ride-hailing market. And Uber’s losing.

Or at least, that’s what Didi Kuaidi would have you believe. On Tuesday, the unicorn startup–valued at $16 billion with $4 billion in venture capital funding–released new data on its position. Didi Kuaidi claims that it is the “market leader” in all of the 259 cities where it provides private-car hailing, including a 90% share of Beijing, home of 21 million people, where the company fields over 1 million daily ride requests.

Didi also wants credit for not losing quite as much money as it did previously. The startup claims to have “broken even” in “over 100″ cities in 10 provinces it which it operates. Of course, that is less than half of all its active cities, and Didi plans to expand to 400 total cities in the next three months. The move keeps it ahead of Uber, who said in September that it would enter 100 new Chinese cities over the next year.

“At Chinese New Year in February 2016, Didi Private Car will be available in over 400 cities to form the world’s largest ridesharing network. We hope Didi’s private-car service will be in each and every city in China soon,” Didi’s VP of Corporate Strategy Stephen Zhu said in a statement.

Didi and Uber China (technically a separate mainland-based operation from Uber global) have spent hundreds of millions of dollars each on subsidies to convince Chinese drivers to opt for their service over their competitor’s. Both have big backers–Didi counts Alibaba and Tencent, while Uber China partners with Baidu. While Uber is the global behemoth in the nascent ride-hailing market, with a valuation that exceeds $50 billion and a funding war chest of more than $7 billion, it’s fighting an uphill battle against local competition in many foreign markets like China.

Both companies are expanding rapidly in geographic coverage and new service offerings. Didi is adding “Express Pool” in over 20 of China’s largest cities. The service, much like Uber Pool and Lyft Line, matches riders going in the same direction to share a car. Didi says that during a one month trial period, it completed 6.5 million carpooling requests in 6 cities, and then another 5 million requests after expanding to 14 cities for a week.

The carpooling function has potential to maximize driver use and lower prices for customers, but so far it’s been a money-loser for ride-hailing apps, since the fares are lower and the companies have had limited success matching multiple riders traveling the same route. Didi claims its ride overlap on carpooling requests is “close to 70%.”

According to a report by Analysys International last month, Didi Kuaidi leads China’s private-car ride-hailing market by a wide margin. The report says Didi represents 83.2% of active users, while Uber comes in at 16.2%.


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