The deal was announced jointly in Beijing by executives including Uber Chief Executive Travis Kalanick. The amount of the investment is still wrapped under the sheets, but is estimated to be in the vicinity $6oo million.
China had around 18 million taxi app users in 2013 which is set to rise to around 45 million by 2015, according to Chinese internet consulting group iResearch. There is certainly a lot of potential for taxi services to gain a rapid growth in China.
The strategic investment will involve Uber’s drivers to use Baidu’s Baidu Map and Mobile Baidu, which connect to Baidu’s search engine. Since China has censored Google Play Store services in the country, Baidu will help Uber to promote its app via 91 Wireless, Baidu’s app distribution channel that provides alternative for Google Store apps.
Baidu and Uber said they would join hands together to compete with the rival services Kuaidi Dache and Didi Dache, two domestic car-hailing apps backed by Baidu’s rivals Alibaba and Tencent respectively. Uber CEO Kalanick said his company will integrate its service into the popular Baidu Maps smartphone app.
Kalanick further added-
Millions of people open Baidu Maps everyday to look at where they’re going next. We can take them there.
Earlier this month, Uber raised $1.2 billion in a new round of funding that valued the company at $41 billion. Uber obviously needs a local player like Baidu that really understands the Chinese market. The U.S. startup has suffered a number of setbacks this week including bans in some major countries, injunction and a rape incident in the capital city of India involving Uber’s driver.