Didi Chuxing founder and CEO Cheng Wei expects that “China will lead the world in the sharing economy and become the center of transportation reform in the following 10 years.” While Mr. Cheng’s prediction may seem overstated, the Chinese ride-hailing giant is quickly becoming the leading backer of ride-hailing apps around the world.
Last month, Didi Chuxing sealed a “strategic partnership” deal with Careem, a UAE-based ride-hailing app that has operations in countries across the Middle East, North Africa and Central Asia, including Pakistan, Turkey, Egypt, Qatar, Lebanon, and Palestine. “Growing urban populations and economic and social diversity in the MENA region present enormous opportunities for the ride-hailing economy,” Mr. Cheng said in the announcement of the partnership, adding that through technology exchange and co-development, they look to support the continued growth and transformation of the region’s transportation industry, and foster more innovative services for a broader network of communities around the world.
A week before the announcement of the company’s deal with Careem, Didi Chuxing announced another “strategic partnership” that would bring the Chinese giant to Europe and Africa through its backing of Estonian startup Taxify. Taxify operates in 18 countries across Europe, including Hungary, Romania, the Baltic States, and in African cities in Kenya, Nigeria, and South Africa. Taxify will launch in London later this week, where it will contend with Uber’s 40,000 drivers and three million users by promising passengers cheaper fares – with a higher percentage of the profits going to drivers.
These developments cement Didi Chuxing’s position as Uber’s largest rival globally. In August 2016, Uber was edged out of China when it agreed to sell off its subsidiary company, Uber China, to the Chinese ride-hailing app in exchange for a 17.7 percent stake in the merged operation. By that, Cheng wins a seat on Uber’s board, and Uber’s CEO Travis Kalanick wins a seat on Didi Chuxing’s, but loses out on opportunities in China and elsewhere in the region. After testing the waters in other parts of Asia, Didi Chuxing outran Uber and co-led the current financing round of Grab, the leading on-demand transportation and mobile payments platform in Southeast Asia.
In September 2015, Didi Chuxing, named Didi Kauidi at that time, pumped around $30 million in Ola, Uber’s rival in India. India is second only to China when it comes to the market growth potential of the ride-sharing market. When Ola heard the news about the Uber-Didi merger a year later, the company asked: “Did they (Didi Chuxing) just give money to our competitor? Did they just hand a war chest to Uber to beat us in India?” Ola was also concerned about the indirect share Uber now had in Ola. An unidentified senior executive at Ola also said that the Didi-Uber merger isn’t looking good for the Indian company. “We can’t go to any other country where the alliance exists and there is no market Ola sees in Europe. So, we are stuck here.” Yet, the executive is optimistic since the market is “still big.”
But Didi Chuxing’s battle for the ride-hailing market is hardly limited to Asia. In fact, Didi Chuxing has gone as far afield as San Francisco, pumping US$100 million into Lyft in September 2015. Even Apple Co. has found a seat on the board of Didi Chuxing after investing US$1 billion in the Chinese ride-hailing giant, which is the single largest investment the company has received to-date.