Even though Didi Kuaidi, the biggest cab-hailing service in China, owns as much as 95% of the entire taxi market in the country, Uber has made good use of the 5% it shares with other services. In an e-mail leaked to Financial Times, Uber CEO Travis Kalanick revealed how Uber is now faring as many as 1 Million trips a day in China, with plans to expand further.
Kalanick further writes that China is set to become Uber’s largest market, leaving behind its home nation US, with plans to expand to 50+ Chinese cities with an average of 5 Million residents (thats the size of Miami, one the most populated US cities). This, is in stark contrast to the general notion which Uber has developed for itself in the country, of an outsider struggling to gain any significant market share.
In fact, there have been reports that Uber drivers are logging in fake rides onto their accounts, which is the reason behind Uber’s strong growth figures (via TechCrunch). A New York Times report had earlier pegged Uber’s daily rides in China ay just 100K, which is a tenth of what Kalanick is claiming right now.
Kalanick further mentions, that China is set to become his company’s largest market, surpassing the U.S and that four out of the top 10 cities worldwide — on the basis of rides — belong to China. He stresses on how his company has been reversing the general trend of US companies not faring well in the Chinese markets, even though Uber China’s operations timeline is far shorter as compared to the U.S. Kalanick mentions in the e-mail,
Guangzhou, Hangzhou and Chengdu have all surpassed New York as our three largest cities on a trips basis. Impressively, Hangzhou and Chengdu have accomplished this feat in just 9 months, compared to New York which is 4 years old.
Here’s the chart put up by Kalanick showing Uber’s staggering growth figures :
Kalanick has put down some other interesting stats too :
- Trips in China have grown at a 100% monthly compound rate since the beginning of the year.
- China now represents the largest region outside the US and, at the current growth trajectory, will most likely surpass the US before year-end. Uber aims to accomplish this even though the US business continues to grow ~4x YoY.
- Uber is apparently now creating over 100,000 new full-time equivalent jobs per month across the country.
Kalanick says that China is currently “the #1 priority for Uber’s global team”, and says he’s “personally” overseeing Uber China’s day-to-day operations. Such importance is obvious, considering his feelings for Uber’s “one” competitor (referring to Didi Kuaidi). Kalanick further blasts out at his competitor, saying that it “has cloned our core product line and is attempting to transition from its legacy taxi business to a similar P2P model”. And incidentally, Didi Kuaidi just recently launched its own peer-to-peer service.
The e-mail further reveals that Uber is planning to invest as much as $1 Billion, and that sum could rise even further as uber plans to raise a fresh investment round, specifically for its Chinese side of business. This round will be in addition to the $1.5 Billion it is raising, valuing the company at a staggering $50 Billion.
However, Uber’s run in China may not be as troubled a it has been for other U.S. giants. The reason being the backing it received from Baidu, in the form of a $600 Million strategic investment, giving it a trusted partner to help in the company’s China ambitions.