6 ms·

Uber just closed a $1B round of funding for its China branch

35 points by doppp 11y ago

ylem 11y ago
Just curious--I believe that you can use WeChat to book a ride using some of Uber's competitors. Can you book an Uber using WeChat?
- ylem 11y ago
  Sorry for my laziness. A bit of googling reveals: http://economictimes.indiatimes.com/small-biz/startups/ubers-quest-to-win-over-china-faces-wechat-hurdle/articleshow/48675838.cms http://economictimes.indiatimes.com/small-biz/startups/ubers... and http://venturebeat.com/2015/08/24/ubers-wechat-drama-exposes-the-unique-challenges-of-winning-in-china/ http://venturebeat.com/2015/08/24/ubers-wechat-drama-exposes... Apparently they've been blocked from WeChat...
- Kunlun 11y ago
  No you can not, only Dididache (滴滴打车) through the WeChat wallet.
msoad 11y ago
When a company raises so much in "start up" mode wouldn't it be harder to turn it into a profitable public company?
- toxicFork 11y ago
  Reminds me of the episode of Silicon Valley mentioned in this Techcrunch article: http://techcrunch.com/2015/06/03/when-silicon-valley-is-too-much-like-silicon-valley/ http://techcrunch.com/2015/06/03/when-silicon-valley-is-too-...
- dylanjermiah 11y ago
  Uber probably isn't going public anytime soon. They've got at least 6+bn in the bank and will do 5bn gross in 2016.
  - jonknee 11y ago
    Rumors are an IPO coming in 18-24 months, so they're definitely not itching to have to do quarterly updates. http://recode.net/2015/08/21/leaked-doc-uber-nears-2-billion-in-revenue-expects-ipo-in-18-24-months/ http://recode.net/2015/08/21/leaked-doc-uber-nears-2-billion...
  - deleted 11y ago
    [deleted]
  - rokhayakebe 11y ago
    $5B in 2016. And one can see Uber growing 10 times bigger.
    - dylanjermiah 11y ago
      Well, that's 5bn on 25bn in bookings. Once there's no driver it'll immediately be 5x higher gross. By the time that comes, I have no idea, Uber will be far larger. Easily see them doing 100bn/year
- mkagenius 11y ago
  Uber seems to have big plans, they are investing in driver less cars too. Imagine every car being driven by AI in 2025 and uber/google being at the center of it. Profit has to come.
  - seiji 11y ago
    goober
    - mkagenius 11y ago
      Funnily, in Hindi that literally means "cow dung" :)
monkeyprojects 11y ago
That is a hell of a risky investment given the approach the Chinese competitors are using in China is to block Uber's access to the devices most people book rides on... see https://pando.com/2015/08/24/wechat-blocks-uber-its-step-one-didi-kuaidi-using-ubers-playbook/9ac6400d1a40d371cfea75e8c28eba9bc0430f9d/ https://pando.com/2015/08/24/wechat-blocks-uber-its-step-one...
- Danilka 11y ago
  Check out the list of investors.
  - RaSoJo 11y ago
    >Investors in Uber's Chinese unit include Hillhouse Capital, Asia's biggest hedge fund, Chinese Internet giant Baidu Inc, China CITIC Bank Corp Ltd, China Life Insurance Co Ltd, Ping An Insurance Group Co of China among others, said one of the people. I completely agree! Sounds like sufficient local power there to thwart any untoward action from the competition.
    - Kunlun 11y ago
      It seems that it will indeed allow to push things forward. Now to see what and who the concurrents have in their pockets.
- jsprogrammer 11y ago
  Isn't the larger risk a true p2p solution that cuts out the middlemen (Uber and its investors)?
- erikb 11y ago
  And not just them. In China you always need political support to succeed. I don't think they have spent the last 10 years making Guanxi there. And the current leadership is also not very pro America.
  - 11y ago
contingencies 11y ago
China has had non-Uber, Uber-like services for years. I've never heard of anyone using Uber here, then again I don't spend time in the megacities. The main service I am aware of is dididache or 嘀嘀打车 in Chinese which was apparently launched in 2012 (same as Uber). My observation is that a lot of people just call their preferred driver, too. In the event that the driver is busy, they generally forward the business to a trusted friend. It's pretty hard to compete with free, personally reputation-audited referrals and 24 hour service. Further, only certain cities have functional traffic: Chengdu being a prime example. Many Chinese cities' road networks have been so oversubscribed by the millions of new cars that have appeared in the last half decade or so that calling someone to pick you up is a physically impossible model during large portions of the day. Yet another source of competition are e-bike or e-trike taxis, which have a few hundred dollar entry cost, hang around on many city corners, are totally unregulated and generally faster and cheaper (5-15元 = $1-3) than regular taxis (due to lack of road space). I am skeptical Uber can generate any profits whatsoever in this market.
- rahimnathwani 11y ago
  "I am skeptical Uber can generate any revenues whatsoever in this market." Uber has _already_ generated non-zero revenues in China. I know because I have paid them money myself. You are right that services like didi dache are head-on competitors. You are wrong about calling a preferred driver. Sure, I do this when I want to pre-book an out-of-town journey or trip to the great wall. But, if I want a car in 5 minutes, from a random part of town, there's no way I can achieve that reliably by calling a guy, even he has a 1st degree connection who happens to be 5 minutes away from my current location.
  - contingencies 11y ago
    Apologies for poor word choice. I meant to indicate profits rather than EBITDA. While you may be in the tiny-to-irrelevant minority of people in Beijing that use Uber and find it useful (probably mostly foreigners?), Beijing is not a normal Chinese city and in the scale of the Chinese market foreigners are statistically insignificant. I remain deeply skeptical "a car in five minutes" is reliably available in Beijing from Uber in many locations outside of the center of the city.
netcan 11y ago
An interesting possibility for Uber in China, assuming they "win," is that the timing could work for leapfrogging car ownership. The timing is right for that in china. They're just entering where more centre of the curve people can afford cars, but most don't yet. It's not ingrained in the culture yet, so they will be more open to alternatives. Also, with driver salaries are lower in China that US & Europe and that will reflect in uber prices. This means that the uber/private car equation is more weighted in Uber's favor. Between those two things, it gives uber a decent shot at becoming a top tier mode of transport. The crazy thing about the market Uber is biting is that it is a massive, massive market. Once you start talking about about market share in transport, you are in crazy territory. Side note: It's pretty wild how much money is available in the "private" markets these days. So, I agree with other commentors that (1) the scale of money coming in is confusing the definition of "startup" stage and (2) I agree that the risks are pretty substantial. That said, (A) the potential reward is pretty hefty too and (B) they seem to be actually operating as an enormously oversized startup. They're taking startup-ey risks and developing the product-market in a startup-ey way. IE, it seems that their current form is not their medium term goal. Say what you will about Uber, they have balls.

35 points by doppp 11y ago

ylem 11y ago

Just curious--I believe that you can use WeChat to book a ride using some of Uber's competitors. Can you book an Uber using WeChat?

ylem 11y ago
Sorry for my laziness. A bit of googling reveals: http://economictimes.indiatimes.com/small-biz/startups/ubers-quest-to-win-over-china-faces-wechat-hurdle/articleshow/48675838.cms http://economictimes.indiatimes.com/small-biz/startups/ubers... and http://venturebeat.com/2015/08/24/ubers-wechat-drama-exposes-the-unique-challenges-of-winning-in-china/ http://venturebeat.com/2015/08/24/ubers-wechat-drama-exposes... Apparently they've been blocked from WeChat...
Kunlun 11y ago
No you can not, only Dididache (滴滴打车) through the WeChat wallet.

msoad 11y ago

When a company raises so much in "start up" mode wouldn't it be harder to turn it into a profitable public company?

toxicFork 11y ago
Reminds me of the episode of Silicon Valley mentioned in this Techcrunch article: http://techcrunch.com/2015/06/03/when-silicon-valley-is-too-much-like-silicon-valley/ http://techcrunch.com/2015/06/03/when-silicon-valley-is-too-...
dylanjermiah 11y ago
Uber probably isn't going public anytime soon. They've got at least 6+bn in the bank and will do 5bn gross in 2016.
- jonknee 11y ago
  Rumors are an IPO coming in 18-24 months, so they're definitely not itching to have to do quarterly updates. http://recode.net/2015/08/21/leaked-doc-uber-nears-2-billion-in-revenue-expects-ipo-in-18-24-months/ http://recode.net/2015/08/21/leaked-doc-uber-nears-2-billion...
- deleted 11y ago
  [deleted]
- rokhayakebe 11y ago
  $5B in 2016. And one can see Uber growing 10 times bigger.
  - dylanjermiah 11y ago
    Well, that's 5bn on 25bn in bookings. Once there's no driver it'll immediately be 5x higher gross. By the time that comes, I have no idea, Uber will be far larger. Easily see them doing 100bn/year
mkagenius 11y ago
Uber seems to have big plans, they are investing in driver less cars too. Imagine every car being driven by AI in 2025 and uber/google being at the center of it. Profit has to come.
- seiji 11y ago
  goober
  - mkagenius 11y ago
    Funnily, in Hindi that literally means "cow dung" :)

monkeyprojects 11y ago

That is a hell of a risky investment given the approach the Chinese competitors are using in China is to block Uber's access to the devices most people book rides on... see https://pando.com/2015/08/24/wechat-blocks-uber-its-step-one-didi-kuaidi-using-ubers-playbook/9ac6400d1a40d371cfea75e8c28eba9bc0430f9d/ https://pando.com/2015/08/24/wechat-blocks-uber-its-step-one...

Danilka 11y ago
Check out the list of investors.
- RaSoJo 11y ago
  >Investors in Uber's Chinese unit include Hillhouse Capital, Asia's biggest hedge fund, Chinese Internet giant Baidu Inc, China CITIC Bank Corp Ltd, China Life Insurance Co Ltd, Ping An Insurance Group Co of China among others, said one of the people. I completely agree! Sounds like sufficient local power there to thwart any untoward action from the competition.
  - Kunlun 11y ago
    It seems that it will indeed allow to push things forward. Now to see what and who the concurrents have in their pockets.
jsprogrammer 11y ago
Isn't the larger risk a true p2p solution that cuts out the middlemen (Uber and its investors)?
erikb 11y ago
And not just them. In China you always need political support to succeed. I don't think they have spent the last 10 years making Guanxi there. And the current leadership is also not very pro America.
- 11y ago

contingencies 11y ago

China has had non-Uber, Uber-like services for years. I've never heard of anyone using Uber here, then again I don't spend time in the megacities. The main service I am aware of is dididache or 嘀嘀打车 in Chinese which was apparently launched in 2012 (same as Uber). My observation is that a lot of people just call their preferred driver, too. In the event that the driver is busy, they generally forward the business to a trusted friend. It's pretty hard to compete with free, personally reputation-audited referrals and 24 hour service. Further, only certain cities have functional traffic: Chengdu being a prime example. Many Chinese cities' road networks have been so oversubscribed by the millions of new cars that have appeared in the last half decade or so that calling someone to pick you up is a physically impossible model during large portions of the day. Yet another source of competition are e-bike or e-trike taxis, which have a few hundred dollar entry cost, hang around on many city corners, are totally unregulated and generally faster and cheaper (5-15元 = $1-3) than regular taxis (due to lack of road space). I am skeptical Uber can generate any profits whatsoever in this market.

rahimnathwani 11y ago
"I am skeptical Uber can generate any revenues whatsoever in this market." Uber has _already_ generated non-zero revenues in China. I know because I have paid them money myself. You are right that services like didi dache are head-on competitors. You are wrong about calling a preferred driver. Sure, I do this when I want to pre-book an out-of-town journey or trip to the great wall. But, if I want a car in 5 minutes, from a random part of town, there's no way I can achieve that reliably by calling a guy, even he has a 1st degree connection who happens to be 5 minutes away from my current location.
- contingencies 11y ago
  Apologies for poor word choice. I meant to indicate profits rather than EBITDA. While you may be in the tiny-to-irrelevant minority of people in Beijing that use Uber and find it useful (probably mostly foreigners?), Beijing is not a normal Chinese city and in the scale of the Chinese market foreigners are statistically insignificant. I remain deeply skeptical "a car in five minutes" is reliably available in Beijing from Uber in many locations outside of the center of the city.

netcan 11y ago

An interesting possibility for Uber in China, assuming they "win," is that the timing could work for leapfrogging car ownership. The timing is right for that in china. They're just entering where more centre of the curve people can afford cars, but most don't yet. It's not ingrained in the culture yet, so they will be more open to alternatives. Also, with driver salaries are lower in China that US & Europe and that will reflect in uber prices. This means that the uber/private car equation is more weighted in Uber's favor. Between those two things, it gives uber a decent shot at becoming a top tier mode of transport. The crazy thing about the market Uber is biting is that it is a massive, massive market. Once you start talking about about market share in transport, you are in crazy territory. Side note: It's pretty wild how much money is available in the "private" markets these days. So, I agree with other commentors that (1) the scale of money coming in is confusing the definition of "startup" stage and (2) I agree that the risks are pretty substantial. That said, (A) the potential reward is pretty hefty too and (B) they seem to be actually operating as an enormously oversized startup. They're taking startup-ey risks and developing the product-market in a startup-ey way. IE, it seems that their current form is not their medium term goal. Say what you will about Uber, they have balls.