China News Start-ups outside India

Lyft Announces Strategic Partnership With DiDi As Latter Confirms $100 Million Investment To Take On Uber

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They say an enemy of your enemy is really your friend and currently it looks like Lyft and Didi have become friends against their common and perhaps every taxi company’s global competitor, Uber.

In a joint conference by US based Lyft and Chinese DiDi Chuxing (formerly DiDi Kuaidi), the two announced a partnership under which Lyft users while travelling in China would be able to hail DiDi cabs from the same app and pay them in their local currency and vice versa.

The company also confirmed the $100 million investment made by the Chinese company in the $530 million funding round held earlier this year.

Partnering with Didi, the only company that provides complete coverage in all major Chinese cities, is the best way to provide a simple, seamless experience when people travel to China and the United States.

read the Lyft blog post announcing the partnership.

John Zimmer, co-founder and president of Lyft, said in an interview, 

If I’m an American traveling to China, I can land in Beijing, step off the plane and have the best coverage possible to find a ride.

According to the International Trade Administration, in 2014, 2,188,000 people traveled from China to the US, and 5,694,000 U.S. residents traveled to China and the number is expected to only increase in the future.

These are huge numbers and indicate towards the potential of China as the largest market for any taxi company and also the reason behind $1.2 billion funding Uber raised for China, As a matter of fact, Uber’s round is greater than the total funding raised by Lyft till date.

The implications of the latest bonding between the two taxi companies may result into more troubles with Uber who already recently admitted being a victim of anti-competitive behaviour after it was blocked from using WeChat in China by Tencent.

In addition to it, when CEO Travis Kalanick visited China earlier this year and proposed an investment in DiDi Dache, the offer was rejected by Cheng Wei, then head of Didi Dache. Cheng Wei had later openly challenged the supremacy of Uber and told WSJ in an interview,

His message was they had conquered the whole world and would also conquer China. You are earlier than us globally, but there will be a day when we will surpass you.

Didi on the other hand has recently announced raising $3 billion in a new round of financing, led by investors including the China Investment Corporation, the Capital International Private Equity Fund and Ping An Ventures. It is now valued at $16 billion and has been successful so far in thwarting Uber’s plans of expanding in China.


 

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