Car-hailing app operator Uber Technologies Inc hopes it will be allowed to expand in Chinese cities, where it believes it can create jobs and ease traffic jams, Chief Executive Officer Travis Kalanick said on Tuesday.

The head of the world's most valuable startup said he is "optimistic" about the company's China operations, despite inspections by the authorities and the prominent presence of local car-hailing apps.

City officials in China "are more in line with (the idea of) urban progress ... and they are more used to large positive changes happening quickly", Kalanick, 38, said in an interview with China Daily. He said that he is still learning how Uber can collaborate with Chinese government departments.

Inspectors recently visited the company's offices in Guangzhou and Chengdu to look into possible regulatory violations.

Uber and other local ride-sharing service providers arrange the hire of privately owned vehicles to passengers. But that practice violates rules against private passenger vehicles making for-profit trips.

Didi Kuaidi, the largest car-hailing app operator in China, has also drawn the attention of local regulators for similar practice.

Taxi drivers have criticized the ride-sharing services, saying that they grab cabs' customers while avoiding tax.

Kalanick said that Uber can show the government its business is good for cities because it will boost employment, reduce traffic and ease the environmental impact of driving.

Uber is holding discussions with the government of Guiyang, the capital of Guizhou province, where the average household income lags behind most provincial capitals.

The company did not disclose details of the proposed partnership, but Kalanick said that creating jobs will be one factor that attracts officials. Uber entered the Chinese mainland more than a year ago, and it is operating in nine cities including Beijing, Shanghai, Shenzhen and Wuhan, the capital of Hubei province.

Many Uber rivals are also seeking official cooperation with local governments to give their operations legitimacy.

Didi Kuaidi recently won the first official recognition in Shanghai as local regulators included its app in a government-sponsored taxi-booking platform.

Of business in China, Kalanick said it was "so far, so good" despite the inspections.

He said that the mobile booking service will expand to more cities. "What China considers a small city, to the rest of the world it's a large city," he said, adding that Uber is now functioning in second-tier cities and will eventually reach third-tier and smaller ones.

Uber is a remote No 2 in China's chauffeur service sector by bookings, according to Analysys International. Didi Kuaidi, which serves far more cities, held nearly 80 percent of the market in the first quarter of the year, while Uber had just 10.9 percent.

Wang Jun, an analyst at Analysys, said as a result of the merger of Didi and Kuaidi, the battle of car-booking apps offered by Alibaba Group Holding Ltd and Tencent Holdings Ltd will get fiercer.

The 3-year-old car-hailing market is set for further reshuffles as Yidao Yongche and other smaller, regional providers also aim for a share.

Last week, cash-rich Didi Kuaidi said it would give away 1 billion yuan ($160 million) worth of rides to commuters to promote its for-profit ride sharing and car-pooling service.

Uber, which has a partnership with Internet giant Baidu Inc, has not announced a promotion campaign on a similar scale.

Ma Si in Guiyang contributed to this story.

gaoyuan@chinadaily.com.cn

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