The taxi-hailing service Uber is fighting a multi-billion dollar fight with competitor Kuaidi Chuxing. And despite the huge losses, it does not look like Uber is going to throw in the towel, says business analyst Andy Mok to ABC News.
In Australia and other many cities around the world, Uber’s biggest challenge has been regulators and the traditional taxi industry.
But in China, the $80 billion tech giant is an underdog in a two horse fight for control of the rapidly growing market.
ANDY MOK: The competition between Uber and Didi Chuxing is actually throughout the entire country of China, and it’s incredibly ferocious.
Both of these companies are throwing literally billions of US dollars into winning the market and hoping to knock the other one out.
BILL BIRTLES: Beijing-based start-up consultant Andy Mok has watched the battle between the two companies unfold.
He wasn’t surprised when Uber recently announced it had spent more than a billion dollars in China in just the last year.
ANDY MOK: So they’re spending that money on offering subsidies, so for example if a cab ride normally cost $5 say, they would say to the customer, to the consumer, well we’ll only charge you $2. And therefore subsidise the other $3 of that cab ride.
But they’ll still pay the cab driver $5 in fact, may even pay more than $5 to encourage more drivers to join their platform.
So that’s where all the money is being spent…
ANDY MOK: In theory at least, this could go on for quite a long time because the amount of capital available globally is enormous.
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