Tag Archives: taxi

INTERNET: Didi Kuaidi a Paper Tiger with US Lyft Deal

Bottom line: Didi Kuaidi’s Lyft investment looks smart but will disappoint those hoping for a more aggressive move into the US, while a new taxi app backed by 2 Beijing fleet operators is unlikely to pose a major challenge to private rivals.

Didi Kuaidi drives into US with Lyft investment

Anyone with big hopes for Chinese hired car services leader Didi Kuaidi following its latest mega fund-raising will be disappointed to hear the company’s highly anticipated move to the US is coming through a minor investment that’s unlikely to yield much results. Many were hoping for bigger things from this aggressive Chinese company, but instead Didi Kuaidi looks set to enter the US through an investment and strategic tie-up with local partner Lyft, a rival of the more high-profile and very aggressive Uber.

My view that many will be disappointed by this move is sincere, but at the same time I would also add that Didi Kuaid’s decision to avoid the US for now looks quite shrewd. History has shown that Chinese start-ups have far better prospects when they make developing markets the first stop on their global expansion road maps, rather than focusing on western markets that are lucrative but also far more competitive. Read Full Post…

MULTINATIONALS: Uber In China Overdrive With $1 Bln Spending Plan

Bottom line: Uber and rival homegrown Chinese hired car services are likely to ultimately get a green light to operate throughout China, providing a much-needed shot of competition to traditional taxi fleets.

Uber plows big bucks into China

Anyone who thought that US hired car services hotshot Uber might be stalling in China might want to reconsider that view, following new reports that say the company has budgeted a cool $1 billion for its China expansion this year. The reports are all citing an internal company email, which strongly suggests that Uber deliberately leaked the message to quash any talk that it might be losing its resolve to push ahead in a China market that is quite difficult but also has huge profit potential.

At the same time, another report is saying that Uber and other providers of similar hired car services could ultimately find their business model outlawed, as a number of cities consider banning or heavily restricting the use of private cars that compete with traditional taxis. I seriously doubt that will happen, however. That’s because Beijing has shown an usual desire to accommodate these newer, high-tech services that have the potential to drive China’s economy in the future as many traditional industries lose momentum. Read Full Post…

GUEST POST: How to Save Uber China

Bottom line: Uber should consider forming closer alliances with local city governments to boost its chances of survival in China.

By Jeffrey Towson

Uber struggles in China

Hired car services giant Uber is now in the situation you never want to be in in China: a foreign company on the wrong side of both the government and powerful local competitors. Ask Google (Nasdaq: GOOG) and Yahoo (Nasdaq: YHOO) how that worked out. However, Uber can still win in China. They have one last move that could reverse the situation. They can do what homegrown rivals Kuaidi and Didi won’t. They can ignore the advice of Alibaba (NYSE: BABA) Chairman Jack Ma and marry the government.

Ma has famously said “Never, ever do business with government. Love them. Don’t marry them. So, we never do projects for government.” Compare this to statements by Kuaidi’s CEO Joe Lee, who said “One thing we learned is if we want to grow fast, we need to make sure the government supports us. Because in China, they can stop you in one day — they shut down your server and you’re out.” Read Full Post…

INTERNET: Car Giant Rises In Uber-Baidu-Yidao Yongche Tie-Up

Bottom line: A Yidao Yongche merger with Uber China continues the rapid consolidation in China’s hired car services, which could be followed soon by a successful bid by Uber and Baidu for Nokia’s digital mapping division.

Yidao Yongche to merge with Uber China

Rapid consolidation is taking place in China’s hired car services market, with word that a new alliance is shaping up between major local player Yidao Yongche and an existing tie-up between global giant Uber and local Internet search leader Baidu (Nasdaq: BIDU). As a longtime Chinese Internet watcher, I’m quite surprised at the sudden and rapid speed of consolidation in this particular sector, since such consolidation in other areas tends to be a slow and painful process that often takes years.

A major factor behind this sudden and rapid consolidation could be the participation by all 3 of China’s top Internet players, including Baidu, alongside social networking giant Tencent (HKEx: 700) and e-commerce leader Alibaba (NYSE: BABA). Two of those companies are also involved in a related headline that is seeing Baidu and Tencent making separate bids for the digital mapping division being sold off by former cellphone giant Nokia (Helsinki: NOK1V). Read Full Post…

MULTINATIONALS: Uber Hits China Speed Bumps In Guangzhou, Chengdu

Bottom line: Recent raids on Uber’s offices in 2 major Chinese cities reflect resistance it is meeting from traditional taxi operators, which could significantly limit its growth potential in the politically sensitive market.

Uber’s offices raided in Chengdu, Guangzhou

The turmoil in China’s overheated market for paid car services has cruised into the offices of global fast-riser Uber, which has been raided twice in the last 2 weeks over its aggressive move into the market. The first raid came last week, when local officials visited the company’s offices in the southern metropolis of Guangzhou, sometimes also called Canton. (Chinese article) Now the raids have extended to the interior city of Chengdu, where Uber’s offices have again been visited by local officials conducting an unspecified investigation. (English article) Read Full Post…

INTERNET: Baidu Steers Marriage Of Uber, Yidao

Bottom line: The Baidu-led union of Uber and Yidao in China looks like a smart move for all 3 parties, but could come under strain due to internal and external factors that could ultimately lead Baidu to buy out the venture.

Yidao, Uber to merge in China

China’s rapidly evolving paid car services realm is creating some strange marriages, bringing together e-commerce leader Alibaba (NYSE: BABA) and social networking giant Tencent (HKEx: 700) last month with a merger of their taxi app services. Now we’re getting word of another unusual marriage, this time as leading search engine Baidu (Nasdaq: BIDU) steers domestic heavyweight Yidao into a union with global giant Uber.

This latest deal would come just 3 months after Baidu made a large investment in Uber, reportedly worth $600 million, and would give Baidu a solid foothold in the fast-growing market for Internet-based car hiring services. China’s other 2 Internet majors, Tencent and Alibaba, already had major Internet hired car assets through their strategic stakes in industry leaders Didi Dache and Kuaidi Dache, respectively, which surprised the industry when they announced a plan to merge last month. (previous post) Read Full Post…

INTERNET: Taxi App Mega-Merger Hits Monopoly Speed Bump

Bottom line: China’s regulators are unlikely to veto the merger of taxi apps Didi and Kuaidi, and should encourage similar consolidation to allow for creation of Internet firms that can be globally competitive.

Yongche accuses Didi-Kuaidi of creating monopoly

Just a day after China’s leading 2 taxi apps announced their plan to merge, a series of observers are voicing concerns that the marriage would be anti-competitive and should be vetoed on antitrust grounds. The sudden debate about the merger of Kuaidi Dache and Didi Dache isn’t too surprising, since it would create a company that would control the vast majority of China’s market for taxi and private car services. But the regulator will need to decide whether such talk of monopoly is justified, since in many ways the newly merged company is still quite small and will also face strong competition from global rivals. Read Full Post…

Shanghai Street View: Irrational Appetites

Cabbies can’t get enough of taxi apps

I’ve refrained from writing before about Shanghai’s ongoing brouhaha over taxi apps, mostly because it seemed too local and didn’t have any broader significance beyond the unruly adoption of a new technology. But Shanghai’s latest move forbidding cabbies from taking new orders while they still have passengers seems worth writing about, as it speaks to a broader issue that looks like simple greed at first but is really a much larger part of the modern Chinese psyche. Read Full Post…

Shanghai Street View: Drab Cabs

Shanghai's beat-up taxi fleet
Shanghai’s beat-up taxi fleet

It may sound like a small and unimportant detail, but taxi cabs form one of the first and strongest impressions that people get when they travel to other cities. Cabs are equally significant for local residents, constituting part of the fabric of everyday life for many urban dwellers in their hometowns.

That’s why I was excited to read that after years of using the boxy and flimsy looking Volkswagen Santana for its taxi fleet, Shanghai was preparing to choose a replacement for the thousands of cabs that ply the city’s streets. According to the latest reports, Volkswagen’s small but much sportier Lavida is the prime candidate to replace Santanas, which have recently ceased production. Read Full Post…

News Digest: May 28, 2013

The following press releases and media reports about Chinese companies were carried on May 28. To view a full article or story, click on the link next to the headline.
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  • EU Duties On Chinese Solar Panels Losing Member State Support (English article)
  • Lashou in Acquisition Talk with Renren’s (NYSE: RENN) Nuomi – Source (English article)
  • Japan’s Line Aims For No.2 in China’s Mobile IM Market (English article)
  • Baidu’s (Nasdaq: BIDU) iQiyi Completes PPS Merger, To Cut 5 Pct Staff (Chinese article)
  • Shanghai Bans “Fare Boosting” Software For Taxis (Chinese article)

China Regulates SMS Spam, Taxi Apps

Beijing regulates taxi apps

When in doubt, regulate. That seems to be the growing attitude in Beijing these days towards China’s tech sector, following the latest media reports that one government agency is getting ready to tackle the problem of mobile spam, while another prepares rules for the newly emerging industry of apps that help people call taxis. I do agree that many problems like mobile spam need to be controlled, and that emerging sectors like taxi apps could always use some guidance to promote orderly development. But China’s growing tendency to try to regulate all things in the tech realm is a bit worrisome, and reflects a broader national love of rules, regulations and bureaucracy. (previous post) Read Full Post…