Chinese Ride-Sharing Company Takes Surprising Swing At Uber


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Ryan Pickrell China/Asia Pacific Reporter
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Just days after UberChina merged with Didi Chuxing, China’s largest ride-share company, Didi took a surprising swing at Uber, and invested in its biggest Southeast Asian rival.

Uber fought tirelessly for two years to gain a solid foothold on the Chinese mainland, but was ultimately forced to fall on its sword before Didi — the far more popular choice when it comes to ride-sharing in China.

Uber sold its China operations to Didi on Monday, in a deal that will offer UberChina investors a 20 percent share in the company and bring in $1 billion in investments for Uber. The deal effectively ended Uber’s attempts to independently operate in China, and set Didi on a path towards a domestic monopoly.

Reports came in Wednesday that Didi — along with Softbank, a venture capital firm — is preparing to invest heavily in Grab, a Malaysian company and Uber’s primary Southeast Asian rival. This round of financing, which could be completed as early as next week, is expected to offer Grab more than $600 million, pushing the company’s available funds over $1 billion.

Uber is currently sending 150 engineers to Southeast Asia to boost its operations there, yet Didi seems determined to see Uber encounter the same challenges it encountered in China. Didi’s actions suggest that the  tensions may continue outside of China.

Last year, Didi invested $100 million in Lyft, an Uber competitor in the U.S., and $350 million in Grab. Together with India’s Ola, these companies formed an anti-Uber alliance.

Following the Uber/Didi merger announcement, Anthony Tan, the CEO of Grab, said, “After more than a year of intense competition, our investor and global partner Didi has effectively won the battle for market share dominance in China.” He added, “Localized solutions best solve local problems.”

Whether the anti-Uber alliance is still intact or how the merger between Uber and Didi will play out is still unclear. Didi could be intentionally fueling competition between Uber and Grab in order to weaken both companies, potentially creating more space in international markets for the possible expansion of Didi operations.

In Southeast Asia, Grab is the more popular service, but Uber is definitely giving them a run for their money financially. Given Grab’s disappointing financial situation, Didi may very well be preparing to eventually purchase Grab.

At present, the Didi/Uber merger has yet to be officially approved by the Chinese Ministry of Commerce, which reported today that it “has yet to receive the notification of intent from Didi Chuxing and UberChina.” Ministry officials continued, “If Didi Chuxing and Uber intend to proceed with the buyout, they cannot do so without formal notification.”

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