Speculations will now find peace, as China’s top two tax-hailing services — Kuaidi Dache and Didi Dache — confirmed that they will merge. The two companies will retain their separate identities and will continue to work with each other, rather than against each other.
Media reports had earlier surfaced, saying that China top two taxi apps are looking for a possible merger, in an indirect signal to Uber — stay off our territory. China’s state-run Xinhua news agency also reported merger talks between the two majors, which acts more or less like a confirmatory stamp.
Together, the two account for over a staggering $6 Billion (estimated) of China’s total taxi business, with an astounding 95% share between them. Times are looking tough for Uber, which just launched its services and received a huge $600 Billion ‘strategic investment’ from China’s Google, Baidu. That investment also included a huge impetus for Uber which included an integration with Baidu Maps and other services.
So why are the two biggest players merging ?
Apparently, the two biggest players are vary of Uber’s growing popularity in rest of the world, wherein the U.S. based tax-hailing app, despite encountering numerous regulatory hurdles, continues to grow at an aggressive pace. Moreover, when you are the top two at any business, co-working seems a more viable option than incurring losses through competitive pricing.
However, what is important here, is the fact that the two Chinese apps are backed by China’s biggest internet companies and fierce rivals. While Alibaba backs Kuaidi Dache, Tencent on the other hand, backs Did Dache
The announcement came through their official Weibo account.