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Uber Is Making a Big Bet on China — But Will It Work?

The company is locked in a pitched battle to dominate China’s multi-billion-dollar ride-hailing market, which it expects will become the world's biggest and most lucrative.

by Reuters and VICE News
Sep 8 2015, 10:18pm

Imagen por Alex Hofford/EPA

The American ride-hailing company Uber will expand its services to 100 additional Chinese cities over the next year, doubling a previous goal set just three months ago, CEO Travis Kalanick announced on Tuesday. He said that it currently operates in almost 20 cities in China.

Kalanick was speaking in Beijing at the annual corporate conference Baidu Inc., China's Internet search leader, which has invested in Uber.

His remarks came a day after he revealed that Uber's China unit had raised $1.2 billion in the course of fundraising, which is ongoing. Bloomberg News had meanwhile reported that Didi Kuaidi — a Chinese rival that was formed earlier this year when the country's two largest taxi-hailing services merged — was close to securing $3 billion from investors.

Uber and Didi Kuaidi are locked in a pitched battle to dominate China's multi-billion-dollar market of commuters, spending capital to subsidize rides and dole out incentives in order to amass market share. They expect the nation's internet-based transport market to become the world's biggest and most lucrative.

Related: Uber Lawsuit May Signal Big Changes in the 'Gig Economy'

"When we started this year, we were about one percent market share," Kalanick said. "Today, nine months later, we're looking at about 30 to 35 percent market share."

He did not specify whether the market he had in mind was for all ride-hailing services in China, including taxis (which Didi Kuaidi dominates), or just for private cars.

Kalanick said that his company welcomes new regulations expected later this year governing ride-hailing services in China, and spoke of the importance of Uber's relationship with Baidu.

"We can get introductions to the city governments, the government officials that want to shepherd our kind of innovation and our kind of progress into their cities," he said.

The Uber CEO's speech adopted the language of Chinese officialdom, riffing on favored Communist Party themes such as harmony and stability.

"Progress is something we see the government be incredibly open to, whether it be about more jobs and less pollution, less congestion on the streets, better utilization of infrastructure," he said. "That kind of progress always has to be in harmony with stability, and that is one of the big things that we partnered with the government on."