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Uber's China Rival Close to Raising $2B in New Funding
- desireco42 10y agoUber's China rival has a name.
- nxzero 10y agoYes, and the story doesn't even use the correct name, it's now Didi Chuxing (滴滴出行), it was formerly Didi Kuaidi (滴滴快的).
- puranjay 10y agoWhat's the difference between the two names? And was there any reason for this name change?
- eva1984 10y ago滴滴出行 -> Didi Travel & Transportation 滴滴快的 -> Didi Fast Taxi
- jzwinck 10y agoGiven that they changed their name, I am surprised they left in the part which when romanized is the slang for penis (didi). Does that seem odd to you, given how much the Chinese enjoy those sorts of linguistic games?
- untog 10y agoBut how many Bloomberg readers would be able to identify that name in a headline?
- desireco42 10y agoIt is a billion dollar company, just because it is not US based, we should know it's name.
- untog 10y agoRight, but we don't. If you took a poll right now I'd bet the vast majority of HN does not know its name. So IMO Bloomberg are absolutely right to not use the name in a headline - they do use the name in the article, which makes total sense.
- dopamean 10y agoThere are a lot of billion dollar companies. We should know all of their names?
- desireco42 10y agoI am really sorry for you guys, seems you are proud of your ignorance. It is business news, they are an important business in a biggest market in the world. What would you want me to say. You don't have to recognize it's name, but I think it is important to know if you are interested in business. You don't have to know who Warren Buffet is, but it is kind of person whose name you should know if you are interested in business and investing. It is just off-hand comment you took maybe too seriously.
- icebraining 10y agoThere are 1922 publicly traded companies and a few hundred private companies in the world with sales of $1 billion or more. Do you know them all by name?
- desireco42 10y agono importante не важно 不重要 महत्वपूर्ण नहीं :)
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- GordonS 10y agoWhat would they do with that much money?
- shivpat 10y agoUser acquisition costs (lol)
- jnardiello 10y agoTransfer 1% to their personal accounts in Bahamas and puf - disappeared.
- nxzero 10y ago(Buy companies.)
- joeblau 10y agoBoth need capital to pay for recruiting drivers and subsidizing customer fares. Last sentence, 3rd paragraph.
- deleted 10y ago[deleted]
- GordonS 10y agoYes, but... $2B?!
- viscanti 10y agoIt costs a lot of money to give away rides to millions of people. They're trying to keep the market unprofitable in the hopes that competitors like Uber think the price of subsidization is too high. They want to buy liquidity and make it too expensive to compete. Once they have liquidity and no competitors it will be almost impossible for a competitor to come in. Customers want the quickest ride. At scale, didi could provide a car in less than 5 minutes for most places. Competitors would have trouble gaining traction (even if they gave away free rides) if they can't get a car to riders in less than 20 minutes. So their strategy is to buy market share now to get to liquidity and to keep the burn going long enough that they're the only ones left standing. Then they dial back the incentives and have a large and hopefully profitable business without any competitors.
- krzrak 10y agoIt's sad when they write about you on Bloomberg and instead of your name there's only "Uber's China rival"...
- Fennhella 10y agoEspecially when that makes it sound neck on neck when in reality Uber is trailing Didi Chuxing (formerly Didi Kuaidi) by a wide margin. Didi Chuxing has 87.2% of the market according to research from the China Internet Network Information Center. http://news.xinhuanet.com/english/2016-01/11/c_134998758.htm http://news.xinhuanet.com/english/2016-01/11/c_134998758.htm
- AustinMunday 10y agoI feel like that is expected. Uber can't win China if they don't want it too. The Chinese state and people naturally want to produce this service (and others, i.e. search engine) themselves, they don't need or want foreign companies taking their market.
- realitycheckx 10y agoDisagree. Uber is not winning in China for one reason only - Didi is better than Uber. It has nothing to do with Chinese government or people. Chinese people love foreign brands, which are seen as being better and higher quality. They buy iPhones, go to Startbucks etc.
- tluyben2 10y agoI have used Didi quite a bit, it's somewhat easier to arrange custom deals with the drivers, like all-day-driver, etc. But the Uber experience was a lot smoother for simple rides from A->B, at least for foreigners. This is in Shanghai/Beijing and surrounding cities.
- modanq 10y agoBoth companies are hemorrhaging cash by operating in China. Its a game of who can survive longer, capital infusions are a way to lengthen the runway. Seems like an ugly battle.
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- fossuser 10y agoI'd heard that the Chinese government unfairly favors local companies. Is this no longer the case? Seems like it'd be difficult for uber to compete in a rigged game.
- MacsHeadroom 10y agoIt is still the case, as it is in nearly all countries (albeit to a greater degree than most).
- realitycheckx 10y agoIt is a myth that Chinese government bans foreign companies for the explicit goal of protecting local players. Chinese businessmen are better at figuring out what works in China, than some arrogant foreigners - that & few other factors is why they win in China[1]. The goal of banning certain companies is not protectionism of local companies, but protection of Chinese government and the bureaucrats(by censoring certain media and disabling channels that could be used for forming groups, which could upset social order). Remember, Chinese government doesn't respond to people or commercial entities. They don't need the money for political campaigns from entrepreneurs, which is why they don't need to promise them anything like ban of foreign companies. [1]https://www.linkedin.com/pulse/20130605230952-18448-why-ebay-failed-in-china https://www.linkedin.com/pulse/20130605230952-18448-why-ebay...
- fossuser 10y agoInteresting - if you're still getting banned, but the cause is censorship and control rather than protecting local companies that's arguably even worse. I guess it might only affect information companies though so maybe it's less widespread.
- realitycheckx 10y agoYes - Startbucks, Walmart, McDonalds and many other International companies are NOT banned in China. One thing these companies that are not banned have in common is that they do NOT threaten the social order of the country. Could Starbucks help start a revolution, like Facebook could? No, that is why Startbucks is not banned and Facebook is. You know, there are many local competitors of Starbucks, so why isn't government banning Starbucks to protect Chinese companies? Because they don't care about opinions of people or local_entrepreneurs. Their goal is not protectionism. Uber will not be banned, since it is harmless to government.
- yueq 10y agoI have used DiDi quite often when I was in Shanghai last year. It was a very pleasant experience comparing using Uber in China. I'm very confident Didi will have a much larger impact than Uber, at least in Chinese market.
- epynonymous 10y agocouple of notes, uber is backed obviously by google, but also by baidu which has deep governmental ties in china (sorry no reference, but the fact that it's the number 1 search engine in china all these years should tell you enough). uber, in fact, uses baidu maps in china for gps. didi is backed by tencent which is the whatsapp clone maker (wechat) and i think alibaba. essentially it's very easy for the chinese government to block out foreign web apps/services, just create a rule on the great firewall followed by regulation to enforce large fines. but they havent done it yet, why? because imho uber and didi help to solve one of the government's biggest urban problems, efficient transportation. yes, sometimes they have small scale crackdowns at airports and train stations to catch uber drivers, but that's just for show to calm down the taxi companies which are government backed and didi, taxi companies have been known to go on strike causing the government to have to resolve things. it used to also be that uber was only paying taxes in usa, but now they're also lawfully paying taxes which should be another revenue stream for the government which is needed in this current economy.