Uber vows to quell Didi Kuaidi challenge

Car-hailing provider unveils multi-pronged strategy for growing its presence in China

Online car-hailing provider Uber Technologies Inc said on Wednesday that it will up the ante in China from next year onwards to quell the threat from local challengers such as Didi Kuaidi.

The United States-based company said its China arm will launch new services, expand into more cities, make new investments and appoint its first China chief executive soon.

Liu Zhen, the "strategic officer" who oversees the company's China operation, said the San Francisco-based mobile application provider is transforming into a localized firm with many Chinese investors, China-specific products and a local management team.

"Uber is fully localized in China. Since other Chinese Internet companies also receive overseas investment, we are no different from them in capital levels," Liu said, dispelling doubts that overseas tech companies may find the going tough in China.

In October, Uber announced a plan for $1 billion investment in the country and set up an independent China branch in Shanghai, trying to play down its overseas company status.

Liu said both Uber and its China subsidiary will soon release the names of Chinese investors. She did not give the exact date, saying it was subject to the company's global team.

Liu also said Uber will announce a China CEO more than a year after it entered the market, but refused to provide a timetable. Liu, who joined Uber in April, currently leads the China operation.

Expansion will be the buzzword for Uber China in 2016. The company is in cut-throat competition with Didi Kuaidi and other players for passengers and drivers.

Didi Kuaidi, backed by tech giants such as Alibaba Group Holding Ltd and Tencent Holdings Ltd, is operating in more than 100 cities while Uber only reaches 21 as of today.

Cities with more than 2 million population will be a potential target for Uber in the next year, according to Liu. China has at least 250 cities that fit the size.

The company said its market share in the chauffeur services sector grew from about 2 percent to 35 percent over the past nine months.

Didi Kuaidi also claimed a majority share, but both claims lack third-party support.

Analysys International, a research firm that tracks online car-booking market, said Didi Kuaidi took more than 80 percent of the market share while Uber, a remote No 2, controlled 16 percent at the end of the third quarter.

Didi Kuaidi's high market share was driven by its large taxi driver base, a segment that does not belong to chauffeur services.

Zhang Xu, a researcher from Analysys International, said the regulators' uncertain attitude toward car-hailing apps will remain the biggest hurdle for Uber, Didi Kuaidi and their challengers.

"The government needs to announce a clear policy as soon as possible to erase the uncertainty in the market," Zhang said.

Last month, the Ministry of Transport published a draft regulation that necessitated private cars to undergo a stringent registration process before being given access to car-hailing apps. The draft had evoked widespread criticism.

Liu from Uber said both app providers and the regulators will need a less strict "Plan B" to resolve the disagreement. But she admitted that it would be a time-consuming process.

gaoyuan@chinadaily.com.cn