Didi Kuaidi, which means “Beep Beep Fast Cab,” was a $6 billion merger of China’s two main apps for booking traditional taxis. It soon expanded into also offering Uber-style ride-hailing.Beep beep yourself, said Uber and entered the market too.
Beijing resident Rachel Zhang, 30, says she rides with both. “For a while, Uber was more convenient because their high subsidies for drivers meant you could get a ride fast,” she says. “Recently, I’m using Didi more, because they have more types of ride services, and Uber’s fares have gone up.”
To fuel their China expansion, the rivals are building war chests. Uber is raising a billion-dollar funding round for UberChina and secured prominent Beijing-based fund manager Hillhouse Capital Group as an investor in a convertible bond for Uber’s global parent company, say people familiar with the deals. Hillhouse is also an investor in Didi Kuaidi.So far, we've got benefits for riders. But don't forget labor;
The companies compete for drivers, as retaining them is crucial to keeping rider wait times low. “How to keep the drivers, how to grow the drivers,” Didi Kuaidi’s Ms. Liu says, is “a major challenge for anyone who wants to build something big in China’s mobile transportation sector.”And bureaucrats;
Both companies have sought to woo drivers with bonuses to those who rack up rides. Uber has offered larger bonuses in an effort to catch up in scale, earlier this year giving as much as 7,000 yuan weekly [$1,100!] to Beijing drivers who completed a high number of rides—quadruple a traditional taxi driver’s wages, according to drivers.
Although analysts say Didi Kuaidi has a leg up on government relations as the local player, Mr. Kalanick [Uber Exec Travis] has crisscrossed China hobnobbing with government officials and businesses. He says Uber is basing its data centers for its China business in the country.The only people so far who aren't prospering are the investors. Which is the way capitalism is supposed to work.