Uber Losing $1 Billion Per Year in China
Ride-sharing app Uber has had some real problems in China. About a month after CEO Travis Kalanick made China a priority and announced plans to invest $1 billion in the Chinese market, the government decided to raid Uber’s offices in Guangzhou and Chengdu over a law banning private drivers from offering taxi services. In addition, Uber has faced stiff competition from the country’s existing ride-hailing app, Didi Kuadi.
All of this has added up to Uber losing about $1 billion per year in China. Kalanick expressed his frustration with the competition to Betakit.com, saying, “We have a fierce competitor that’s unprofitable in every city they exist in, but they’re buying up market share.”
Didi Kuadi is back by two massive Chinese tech companies, Tencent and Alibaba, and recently partnered with Uber’s GM-backed American rival Lyft (and, by extension, India’s Ola and Southeast Asia’s GrabTaxi), to allow their users to hail cars and taxis in each others’ territories. This partnership would allow international travelers to simply continue using the app that they are used to to gain access to the network, and will lead to a sharing of technology, products, and local information between the companies.
In response, Uber has gone on another fundraising run, this time raising about $200 million to help compete with its aggressively expanding competitors.
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