{"id":29621,"date":"2021-03-23T11:09:34","date_gmt":"2021-03-23T15:09:34","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=29621"},"modified":"2021-03-28T01:11:38","modified_gmt":"2021-03-28T05:11:38","slug":"uber-in-china","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/uber-in-china\/","title":{"rendered":"Uber in China: An Embarrassing Defeat"},"content":{"rendered":"\n<p>When did Uber enter China? And why did the ride-hailing giant end up selling its Chinese operations to its Beijing-based rival?<\/p>\n\n\n\n<p>Uber entered China in early 2014, launching its black-car service in Shanghai, Beijing, Guangzhou, and Shenzhen. However, the company ended up selling its Chinese operations because the losses&nbsp;Uber&nbsp;was incurring to win a meaningful market share were unsustainable.<\/p>\n\n\n\n<p>Here is the timeline of events that have led to ceding off Uber China to its biggest competitor Didi Chuxing.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">Uber China Timeline: 2012-2016<\/h2>\n\n\n\n<p>June 2012: Cheng Wei leaves Alibaba and finds Didi Dache after learning of the Hailo-Uber battle.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Among 30+ ridesharing competitors in China, Didi differentiates strategy by giving their free app to younger drivers who already had phones, rather than giving smartphones to drivers.&nbsp;<\/li><\/ul>\n\n\n\n<p>April 2013: Kuaidi Dache raises funding from Alibaba. In response, Didi quickly raises from Tencent.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>In China, dominant share is often established by the startup with the strongest connection to the big 3 &#8211; Tencent, Baidu, and Alibaba.<\/li><\/ul>\n\n\n\n<p>Summer 2013: Kalanick travels to China to try a pilot in Beijing. He meets Cheng Wei and calls him \u201cspecial&#8230;a massive cut above anyone else in the industry.\u201d<\/p>\n\n\n\n<p>Nov 2013: Cheng Wei tries to raise capital in Didi, only to be rejected by multiple investors. He attributes it to Didi\u2019s high burn rate (in 2014, Didi burnt through $100,000 every day).<\/p>\n\n\n\n<p>Feb 2014: Tencent has a big hit with the Red Envelope app, which allows gifting of money as per Chinese custom. Suddenly Alibaba and Tencent get into a mobile payments war, with Didi and Kuaidi as strategic pieces.<\/p>\n\n\n\n<p>Early 2014: Uber launches its black-car service in Shanghai, Beijing, Guangzhou, and Shenzhen.<\/p>\n\n\n\n<p>Oct 2014: Uber introduces UberX in 4 Chinese cities. In December, it raises from Baidu.<\/p>\n\n\n\n<p>Jan 2015: China\u2019s Ministry of Transport rules that private car owners are not allowed to use ride-hailing apps for profit. However, Uber, Didi, and other apps are still allowed to operate, possibly because it helped alleviate transportation issues.<\/p>\n\n\n\n<p>Feb 2015: After burning a lot of money, Didi and Kuaidi decide to merge to form Didi Kuaidi, with Didi controlling 60% of the merged company.&nbsp;<\/p>\n\n\n\n<p>Spring 2015: Kalanick meets with Cheng Wei and asks for a 40% stake in the company, in return for ceding China to Didi. If refused, Kalanick would hand Didi an \u201cembarrassing defeat.\u201d Didi rejects the proposal.<\/p>\n\n\n\n<p>May 2015: Didi says it\u2019ll give away 1 billion RMB in rides. Uber matches it.<\/p>\n\n\n\n<p>Sept 2015: Didi invests $100MM in Lyft. It also establishes an anti-Uber coalition with Lyft, Ola in India, and Grab Taxi in Southeast Asia.<\/p>\n\n\n\n<p>2016: Didi Chuxing (renamed) raises $7B in 2016 and reaches 5,000 employees. It claims an 85% market share in China and is active in 400 cities, while Uber is only in 100. At their peaks, Didi and Uber are both losing $1B per year in China.<\/p>\n\n\n\n<p>Jul 2016: Uber finally cedes China to Didi, getting 17% in Didi and a $1B investment.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When did Uber enter China? And why did the ride-hailing giant end up selling its Chinese operations to its Beijing-based rival? Uber entered China in early 2014, launching its black-car service in Shanghai, Beijing, Guangzhou, and Shenzhen. However, the company ended up selling its Chinese operations because the losses&nbsp;Uber&nbsp;was incurring to win a meaningful market share were unsustainable. Here is the timeline of events that have led to ceding off Uber China to its biggest competitor Didi Chuxing.<\/p>\n","protected":false},"author":7,"featured_media":29623,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,79],"tags":[241],"class_list":["post-29621","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-entrepreneurship","tag-the-upstarts","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Uber in China: An Embarrassing Defeat - Shortform Books<\/title>\n<meta name=\"description\" content=\"Uber entered China in early 2014. 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