The car-sharing service Uber reported in June it is receiving one million requests for rides every day in China. The American-based company is taking steps to win over Chinese consumers and compete with local businesses.
Uber entered the Chinese market just two years ago. But its quick expansion there is changing taxi service across the country. The company reaches large numbers of Chinese with its smartphone application.
And as it has done in other markets, Uber is making business difficult for traditional taxis and private car services. This is making longtime taxi drivers very unhappy.
Jin Zhu drives a taxi in Beijing. He said Uber is making it hard for him to find customers and earn a living. He said it is not that he and other taxi drivers can't find any riders, but that there are not as many as before.
Chinese rival
Uber’s biggest rival in China, Didi Kuaidi, currently has more than 80 percent of the market. It has help from two major Chinese businesses, the Internet companies Alibaba and Tencent. Unlike Uber, Didi Kuaidi has services that use local taxis, instead of only private cars.
Uber is working to win market share by offering rides that cost 35 percent less than taxis. The company is also offering bonuses to drivers.
The company said it has created more than 60,000 jobs in China. Last month, Uber announced it plans to spend $1 billion to expand in the country.
Ben Cavendar is with China Market Research. He says Uber has been aggressive about investing. Last December, the Chinese Internet company Baidu invested in Uber.
“It seems like, so far, with everything that they have done, they have been pretty aggressive about investing. And they have a tie-up now with Baidu, which has gotten them a lot of extra funding.”
Mr. Cavendar says one issue for Uber in China is that there are already local companies offering similar services.
“The challenge in China, versus in a lot of other markets in Europe or Asia, is that there are already a lot of competitors on the ground here.”
Uber’s chief executive officer, Travis Kalanick, has been making trips to China to lead its expansion across the country. In public speeches, he has expressed hope about the company’s chances. However, many young Western technology companies have faced difficulty in trying to win over Chinese consumers.
And Uber’s competitors are also expressing hope about the future. Last week, Uber rival Didi Kuaidi said it expects to raise at least $1.5 billion in new financing, making it one of China’s most valuable Internet start-up companies.
Like in other countries, there have been protests against Uber in China. Some drivers oppose its low prices that make it harder for traditional taxis to compete. Chinese officials have also raided some offices. They accuse Uber of operating without the right government permits.
But so far, drivers’ protests are not stopping the growth of these businesses within China. Mr. Kalanick of Uber says the company plans to expand to 50 more Chinese cities within the next year.
Words in This Story
rival - n. a person or thing that tries to defeat or be more successful than another
bonus - n. an extra amount of money that is given to an employee
start-up - n. a new business