Uber’s challenges in China go beyond the country’s boundaries: one of its chief competitors in Southeast Asia recently raised a stunning $400 million in a financing round sponsored by China’s Sovereign Wealth Fund.
The $740 billion fund, China Investment Corporation, was the principal financier in Singapore-based GrabTaxi’s newest round, boosting the value of the South East Asian taxi app at an approximated US$1.8 billion.
The taxi-hailing app, GrabTaxi operates in 22 cities in six countries in Southeast Asia, and intends to utilize its new funds to further grow in the region.
The app is not the CIC’s first foray into the cab-hailing industry.
Last month, the fund participated in Chinese industry leader Didi Kuaidi’s record-breaker $2 billion investment round, which placed the firm’s worth at $15 billion.
Though the Chinese app currently commands 90 per cent of the local cab-hailing industry, it has had to deal with stiff competition from US-based Uber, which recently allocated$1 billion for additional expansion in China.
Uber chief executive Travis Kalanick reported in June that China was the number one priority for their global team.
However, the growth has not come without problems.
In May the corporation’s official quarters in Chengdu and Guangzhou were invaded by the authorities, and it has sparked protests from cab drivers who blame the app of introducing unfair competition in the business.
The public turbulence spilled over into Hong Kong early this month.
Police officers raided Uber’s offices in Hong Kong and arrested two employees. They also detained a number of Uber cab drivers for running business without a car-hire license and operating without appropriate insurance.
The decision came after a number of charged protests organized and executed by cab drivers in the city in the past few months against such apps as Uber.
Last week, Uber struck back with an intensive public relations crusade, attracting about 50,000 signatures to an appeal supporting its operations in Hong Kong.
On Sunday, the city’s Consumer Council leader Wong Yuk-shan reported the supervisory body will scrutinize the cab app industry, cautioning that there was an insurance problem involved in utilizing car-hailing services.
Uber has constantly insisted that its drivers have satisfactory insurance.