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  • Finally, Uber China has to be compromised with capital game

    Post by : expatree
The big news that Uber China eventually agrees to accept a buyout proposal by Didi (滴滴), a local taxi calling application. Before Didi has absorbed another local competitor, Kuaidi (快滴), now it turns to be in charge of all Uber business service in China. This story becomes true even if two companies always denied this kind of rumor several months ago. To our opinion this is a vivid lesson telling an embarrassed picture of problems foreign innovative companies now face in China. Of course, this results in a diversity of mixed public opinion.

Obviously a few Uber staffs are not excited with this merger anymore, quoted from some staffs saying, We are young and we eager to win this battle. But sadly they have not tried all efforts by chance suddenly have to accept a final result. In most public mindset, Uber always gives “out of box” surprise rather than other competitors, no matter in marketing promotion, or in user experience of product aspects. Even sometimes there is so crazy idea but young generation is willing to chase Uber’s value.

In the other hand, Uber continues “burning money” to attract new users against a huge capital investment in Didi. It’s reported that in 2015 Uber offers driver with an amazing incentives by “7000 RMB financial rewards per 85 orders”. Uber and Didi, both used “discount + allowance” pricing strategy to keep returning passengers and drivers guaranteed, unfortunately no one could take a further step to get rid of opponent , “burning money” model seems have to be endless. Not limited to struggling for the pricing war, Uber faces doubt voice of legality issue in China at the same time, “sharing economic” is a creative business model but not accepted by everyone, especially for traditional taxi drivers. “Unsafe” scandal news was frequently reported on the public media, made Uber drivers decreased a lot.

Thanks to the competition situation, local Chinese users can enjoy this benefit except backroom investors. Apple, Alibaba, Baidu, Tencent and Softbank etc. these technology industry giants have intention to stop fundraising on two companies. A strong signal shows as long as “merger”, new company Didi’s market value will be estimated up to 35 billion US dollars, investors prefer this alternative and the final winner should belong to them.

Review on local opinions, most people pay attention on changes of taxi tariff. With the end of “coupon” distribution, the taxi rate has continued going up since June. We have no idea if this merger will finally become a kind of monopoly on taxi service industry, but we believe lack of competition means this lost driving force for transformation and innovation in the future. “Born to be Proud”, we quote this Uber’s value to pay our respects to those companies, who is keeping innovative attitude until now.
Date:2016-08-05 11:44:08
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