Both companies claim to control huge market shares, but the more interesting question is if they can phase-out subsidies
Digging up the correct figures on China’s ride-hailing market can be a challenge for onlookers, though it is apparently also a struggle for the companies themselves.
According to Liu Zhen, the Senior Vice President of Strategy at Uber’s China division, the U.S.-founded company will overtake Didi Chuxing to become China’s top provider of private-car ride hailing services within 12 months.
“Last year we were only operating in eight cities with only a 1 percent market share,” she said at a Wall Street Journal conference on Friday, noting that the company has since accelerated to take over a third of the market.
True to the fierce competition in China’s ride-hailing market, Uber’s statistics are at sharp odds with how much of the market Didi Chuxing believes they own.
Just two days earlier, President of Didi Chuxing, Jean Liu, casually announced that Didi owns almost 90 percent of the country’s private-car ride-hailing market. “They’re [Uber] actually in the industries we are in which is the private car service, where we have [an] 87 percent market share,” said Liu in a conversation with Recode’s Kara Swisher and Walt Mossberg.
Also Read: A one-month evaluation of Go-Pay implementation
Didi Chuxing originally found dominance in securing the ride-hailing market for taxis, a market it now claims to own “almost 100 percent.” Taxi services aside, the two companies compete directly in virtually every other aspect.
The confusing myriad of services run by both companies in China has further muddied the distinction between which company owns what in a landscape of varied ride-hailing options. Both companies operate carpooling services alongside private car and black car services. However each company is also working on a handful of initiatives, from Didi’s foray into bus services to Uber’s latest route-oriented carpooling service.
It’s also important to note that drivers in China are not necessarily loyal to either service, using whichever option is most busy or profitable on the day. One Didi driver told Technode that while she earned more using Uber’s service per ride, she found herself often driving Didi passengers because they were more frequent, swapping between the two apps.
The two companies also disagree on another factor that lies at the heart of a successful China campaign: their relative abilities to phase out subsidies. Both companies have relied heavily on subsidized services to expand rapidly on the mainland, and the race is now on to see which service can successfully transition into a more sustainable model.
On Friday Ms. Liu noted that UberChina will break even in China “soon”, spending 80 percent less per trip it did a year ago. In March this year Uber CEO Travis Kalanick noted that UberChina will break even within two years, and that they are spending roughly a billion USD per year in the market. Didi Chuxing claims to be profitable in 200 of the 400 cities they currently operate in, noting that less mature markets receive higher subsidies than some of the company’s more mature markets.
Also Read: Can the world’s most famous taxi app UberEATS the competition?
Both companies continue to fundraise at a breakneck speed, funneling funds into subsidies as well as technology. Recently Uber’s global operation received a $3.5 billion USD boost from a Saudi Arabia’s Public Investment fund, some of which would be spent on UberChina’s operations Liu Zhen confirmed on Friday. Last month Didi Chuxing sealed a 1 billion USD investment from U.S. tech giant Apple as part of a larger fundraising effort.
The original article Didi And Uber Can’t Agree On Who Owns What In China’s Fierce Ride-Hailing Market first appeared on Technode.
Photo courtesy of Uber.
The post Didi and Uber can’t agree on who owns what in China’s fierce ride-hailing market appeared first on e27.
from e27 http://ift.tt/1XvCLxO