Uber has a billion-dollar China problem. When residents of China want to hail a ride via a smartphone app, many are hitting the Didi Kuaidi icon, which gets them a ride from Uber s chief competitor, affectionately known by millions of Chinese as Didi. We re profitable in the U.S.A. but we re losing over $1 billion a year in China, Uber CEO Travis Kalanick complained in a talk at a Vancouver, Canada startup hub, the Canadian tech-news site BetaKit reports.
Didi Kuaidi has a massive advantage in the Chinese market: the half a billion fanatical users of Chinese messaging app WeChat can call a Didi via the app, which belongs to Chinese Internet company Tencent. Uber has a similar arrangement with Facebook, but Facebook is blocked by the government in China.
In December, Uber boasted that it had booked 1 billion rides globally since starting in 2009, then Didi Kuaidi, with specific reference to Uber, put out its own figure in January: 1.43 billion rides – just in 2015, according to Re/Code. However, Didi wasn t really playing fair – its ride number came from seven transportation services it provides in China, according to Re/Code.
Kalanick went on to gripe a bit more about its Chinese nemesis. We have a fierce competitor that s unprofitable in every city they exist in, he claimed, but they re buying up market share. I wish the world wasn t that way. I prefer building rather than fundraising. But if I don t participate in the fundraising bonanza, I ll get squeezed out by others buying market share.
Didi Kuaidi was born in 2015 as a merger between fierce ride-hailing rivals Didi Dache and Kuaidi Dache. The impetus for their merger? Uber s entry into the Chinese market, according to Forbes.
Photo: An Uber app on a phone with traffic behind. (Andrew Caballero-Reynolds/AFP/Getty Images)
The post Uber hitting a competitive wall in China appeared first on SiliconBeat.
