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Tech

Uber Can’t Catch a Break in China

Lyft and Didi Kuaidi are teaming up to get 8 million China-US jet setters using anything but Uber.

Uber may dominate in the US, but that hasn't been the case abroad, particularly where taxi drivers and other apps already have footholds. China, for example, already has two major ridesharing companies that merged in anticipation of Uber's arrival: Didi and Kuaidi.

But Uber could be facing even stronger competition soon—not from any one company, but foreign alliances.

Competing US-based ridesharing service Lyft announced on Wednesday that it's partnering up with China's de facto car hailing service Didi Kuaidi in a bid to bring each other's services to each company's respective countries without actually having to expand. Lyft users will be able to hail Didi drivers while in China, where Lyft doesn't have a market, and vice versa, using either company's app.

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It's basically a concerted effort to get 8 million China-US jet setters using anything but Uber. Chinese visitors can use their own Didi app and see Lyft drivers while in the US, and Lyft customers can see Didi drivers in China without having to download another app.

Didi has a lot at stake in keeping Uber from dominating in China. It's a market that's plenty wary that it's being proselytized by American-owned companies looking to the country as an emerging market. iPhones, for instance, have finally gotten a foothold in China after being branded as a second-class phone under domestic companies like Huawei, Xiaomi, and Lenovo.

Perhaps that's why Didi also invested $100 million in Lyft's latest round of funding earlier this summer, a drop in the bucket next to Didi's $16 billion valuation.

"You are earlier than us" globally, Didi CEO Cheng Wei told Uber CEO Travis Kalanick in The Wall Street Journal, "but there will be a day when we will surpass you."

Joining forces might be the only way that smaller companies like Lyft and a myriad of other foreign ridesharing companies can stand a chance against Uber. It's too big to topple, but in markets the company hasn't already gained a firm grasp on, partnership allows companies to share coverage, trade tips, and gain exposure in markets they otherwise wouldn't have the budget for.

It may very well be one of the few things stopping Uber from dominating in every single market. After all, laws haven't ever stopped them for long.