Uber is up in arms against Chinese tech giant Tencent over what it terms anticompetitive business practices by the social network. Uber executives have come out strongly to protest the repeated anticompetitive tactics being used against the popular ride sharing app to make sure it does not penetrate the Chinese market, a market analysts have said will be the largest ride sharing market in the world.
Uber executive Emil Michael recently complained in an interview about Chinese company Tencent’s anti-competitive strong arm tactics. He was referring to the banning of Uber from WeChat, China’s most popular messaging app, wholly owned by Tencent.
Uber’s problems stem from the fact that the company is jumping head first into the Chinese market, in direct competition with Didi Kuaidi, a homegrown car sharing service. Didi Kuaidi is backed by three of mainland Asia’s strongest corporates Tencent, Alibaba and Softbank.
Softbank is already sponsoring Uber’s rivals in Singapore and India while in mainland U.S., Alibaba is funding rival cab sharing service Lyft.
The move by Tencent to ban Uber from WeChat, which enjoys a registered market of over 350 million Chinese citizens, has been seen by analysts as the first draw of blood from dominant nationalist Chinese companies. More artillery could be fired through Alibaba, which owns Uber’s preferred payment vehicle, Alipay.
Though the tactics do bear the persistent coating of intolerance to competition, the underdog image does not suit Uber in any way, especially since the company itself used some of the tactics against competition in the U.S.
An investigation by The Verge one year ago revealed that Uber had initiated an operation codenamed ‘SLOG’ to completely frustrate rival Lyft.
The operation involved leveraging investors to block attempts by Lyft to raise capital in the U.S. The operation also involved hiring secret agents to take Lyft taxis and use any means possible to convince the drivers into ditching the startup for Uber. Could Uber be suffering from a bad case of a dose-of-your-own-medicine?
Michael, however, was quick to point out that the company would not be backing down from the Chinese market and expected to see rival companies slow down on their hostility.
He said, “I think as we continue to succeed, and it’s clear we’re in this for the long haul—we’ve got Chinese investors behind us; we’ve got partnerships with cities; we're spending money in the local economy; local investors have an interest in our success—then we’ll get into more of a détente mode.”
Valued at $50 billion, Uber is planning to go public in 18 months. The Chinese market presents a potent entrance into populous Asia, which the company will need to both thrive in future and raise capital in their IPO.
With Uber being an American company and presenting a threat to the local establishment, hostility from Chinese companies will not be going down anytime soon.