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Uber Makes Big Push to Win Over Chinese Consumers

Uber CEO Travis Kalanick speaks during the Baidu and Uber strategic cooperation and investment signing ceremony at Baidu's headquarters in Beijing, December 17, 2014.
Uber CEO Travis Kalanick speaks during the Baidu and Uber strategic cooperation and investment signing ceremony at Baidu's headquarters in Beijing, December 17, 2014.

Uber, the ride-hailing smartphone application, this month reported it is logging 1 million rides every day in China.

The company is making aggressive efforts to win over consumers and compete with local rivals.

Uber, the San Francisco-based firm, entered the Chinese market just two years ago. But its rapid expansion is quickly changing taxi service across the country.

And like in many other markets where Uber is upending traditional taxi and private car services, longtime drivers are complaining.

Beijing taxi driver Jin Zhu said Uber, in which private drivers use their own vehicles to offer rides, is making it harder for him to find customers and earn a living.

Jin said it's not that they can't find any customers, but that there are not as many as before. He said it's getting harder for traditional taxi drivers to make money.

Chinese rival

Uber’s biggest local rival, Chinese firm Didi Kuaidi, currently has more than 80 percent of the Chinese market and is backed by Chinese Internet behemoths Alibaba and Tencent.

Unlike Uber, Didi Kuaidi also has services that use local taxis, instead of just private cars.

Uber is working to win market share through heavily discounted rides that are 35 percent less expensive than taxis, as well as offering bonuses to drivers.

The company said it has also created more than 60,000 jobs in China. Earlier this month, Uber said it plans to spend $1 billion to expand in the country.

“It seems like, so far, with everything that they have done, they have been pretty aggressive about investing. And they have a tie-up now with Baidu, which has gotten them a lot of extra funding," said Ben Cavendar, an analyst with China Market Research.

"The challenge in China, that they don’t have in a lot of other markets in Europe or Asia, is that there are already a lot of competitors on the ground here,” Cavendar said.

Uber CEO Travis Kalanick has been making regular trips to China to spearhead Uber’s expansion further across the country.

In public speeches, Kalanick has been optimistic about the company’s chances, despite the difficulty many young Western technology companies have faced in trying to win over Chinese consumers.

But Chinese competitors are also keen to take charge of the massive market for ride-hailing services.

Last week, Uber rival Didi Kuaidi said it was well on track to raise at least $1.5 billion in new funding, making the company one of China’s most valuable Internet startup companies.

While the companies battle it out, consumers are enjoying the rivalry.

Using apps

College student Jennifer Hong often uses the two ride-hailing applications.

Hong said she uses Didi Dache, Didi Kuaidi's ride-hailing app, a lot more than Uber. She said she thinks it's pretty convenient to get a cab in Beijing, when the weather isn't too bad.

Like in other markets, there have been protests against Uber in China.

Some drivers oppose Uber’s slashed fares that make it harder for ordinary taxi drivers to compete. Chinese authorities have also raided some offices, accusing the company of operating without proper licenses.

But so far, drivers’ protests are not stopping the ascent of these companies within China.

Kalanick also said Uber plans to expand to 50 more Chinese cities within the next year.