In the latest battle in the war between America’s leading ride-hailing app, Uber, and China’s leading ridesharing service, Didi Kuaidi, the Chinese company has raised the stakes.
Specifically, Didi Kuaidi recently invested in Uber’s top U.S. competitor, Lyft Inc.
Lyft is a privately owned American transportation network based out of San Francisco. The company’s mobile phone app facilitates peer-to-peer ridesharing and provides a service very similar to that of Uber. However, Lyft has not faced some of the headaches that Uber has sustained because Lyft works directly with existing cab drivers in some cities – thus avoiding some of the regulatory problems facing Uber.
By May of this year, Lyft raised approximately $1 billion in funding to add to the $2 billion round of funding raised last July. Included in the list of 2015 investors is Didi Kuaidi alongside China’s leading Internet companies, Alibaba and Tencent.
The main reason that Didi Kuaidi invested in Uber’s competitor? It’s looking to boost the competitive threat to Uber in the United States at the same time Uber attempts to expand in China. Since Uber has called China its most important global market, it announced an ambitious plan to expand its presence to 100 more Chinese cities in 2016.
Obviously the move has not gone unnoticed by Didi Kuaidi.
Presently, Didi Kuaidi dominates the ride-hailing industry in China and claims to control 80% of the market. By investing in Lyft, it hopes that Uber will focus on competition within the United States and maybe distract the company from its efforts in China. Whether that happens remains to be seen as both companies seem to have truly global ambitions.
Along with the major investments that Lyft has enjoyed, Didi Kuaidi has received its own massive amount of funding. The company’s chairman and executive, Chen Wei, stated that the new group of investors is a “vote of confidence in Didi Kuaidi’s leadership in China and our ability to further cement our foothold in the local market.”
As for now, the war between Uber and Didi Kuaidi wages on and don’t expect these heavily financed and hype-aggressive operations to call a truce any time soon.
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