Global Uber App Abandoned in China

Acquisition of UberChina

In August， Didi Chuxing an- nounced its acquisition of UberChina. On August 1st， Didi Chuxing announced it had reached a strategic agreement with Uber to acquire all assets of UberChina including brand， business and data to operate on Chinese mainland.

After the two parties reach the strategic agreement， Didi Chuxing and Uber will hold each others shares and become each others minority shareholder. According to Didi Chuxing， UberChina will maintain its independence in brand and operations， and drivers and passengers will continue to get stable services.

With the cooperation of the two parties， many people are wondering if there will still be subsidies to drivers and passengers and whether the fare will rise. Didi Chuxing offered some reassurance， saying it will still take improving users trip experience as one of the business directions in the future， and the red envelope subsidies to passengers and awards to drivers will continue to be provided for a considerable time.

Abandoning the Original Global App

In December， four months after Didi Chuxing made its landmark acquisition of Ubers operations in China， Uber China has been severed from the international ride-sharing company it had branched from.

Users who were still using the earlier version of the Uber app were moved over to the new one， the iOS version of which is developed by Didi Chuxing.

Abandoning the original global app is a sign that Didi is steering toward total integration with Uber， said Zhang Xu， an analyst at consulting firm Analysys."This shows that Didi wants Uber China to be independent from its former international parent， and to resemble Didi more."

The new home-grown app will also give Didi more control over Ubers marketing and promotion in China， Zhang added.

Although Ubers app remains separate from Didis， the new app， introduced a month ago， shares backend data， which means that trip requests sent from passengers using either Didi or Uber reach the same pool of drivers.

Anti-monopoly lawyer Wei Shilin warns that the decision to fuse the two apps backstage is jumping the gun because the deal is still pending review from regulators， who will decide whether the merger requires a go-ahead from antitrust authorities.

One key criterion when assessing whether the deal is subject to scrutiny from antitrust authorities is "actual control over the acquired company，" said Wei， director of the Antitrust Committee in Beijings Lawyers Association. "If the two are sharing the same backstage， it makes it hard to argue that Didi does not claim actual control，" he said.

Wei added that even if Didi were to succeed in persuading regulators of Ubers operational independence，"backstage integration is essentially sharing of competitive information， which is another breach of anti- monopoly laws."

"Either way， this move could put Didi in a difficult position with the authorities，" Wei said.

Didi states that sharing orders and drivers across two platforms will increase the number of drivers available and "enhance transport capacity，" and slash waiting times and price surges， which have been on the rise as drivers drop out amidst slumping subsidies.

Caters to a Domestic Market

The new app caters to a domestic market rather than foreign travelers and short-term foreign residents. Users without a mainland cellphone number are effectively cut off from using Uber in China， and credit cards issued from outside China are no longer accepted. Didi said English-language functions are still in the pipeline.

Non-Chinese-speaking users complain that the new app contains huge hurdles. "Shutting off the English interface excludes many expats， but the other restrictions also cut Didi off from the market of people who are traveling to China for business or holidays，" said Mike Shaw， a public relations professional in Beijing.

When Didi acquired Uber China in August， it promised the latter independent branding and business operations to "ensure stability and continuity of service for passengers."

Offer Car Rental Services

Chinese ride-hailing giant Didi Chuxing and car rental behemoth Avis have announced a partnership that will give registered Didi users easy access to car rental services when traveling abroad.

Available in 175 countries around the world， the tie-up will essentially allow Didi to continue to monetize its 300 million-strong user base， even when theyre traveling outside of China. Through the initiative， the two companies plan to “coordinate product， technology and local marketing resources” and let Didi users book car rental services directly through Didis mobile app.

Didi Chuxing emerged in early 2015 following a merger between local rivals Didi Dache and Kuaidi Dache. The service offers smartphone-based car services such as taxis， carpooling， and premium cars with drivers， much like Uber， and is the market leader in China by some distance.

Back in July， Uber effectively threw in the towel on its mission to conquer China on its own， and elected to merge its Chinese operations with Didi in a $35 billion deal. A few months previous to that， Apple contributed $1 billion to a mammoth $7.3 billion funding round by Didi .

While Uber has been slowly conquering the globe on a region-byregion basis， Didi has its own domestic market cornered. However， this limits the companys prospects for growth， which is why its pursuing other avenues to ensure its bottom line continues on an upwards trajectory. Back in September，the company invested “tens of millions” of dollars in Chinese bike-sharing startup Ofo， adding another service to the Didis slate， which already included taxis， car rental， bus services， and chauffeurs. Beefing up its in-country services makes sense， as does finding ways to “go global” without tackling incumbents such as Uber.

“Internationalization is a clear mission for Didi，” explained FU Qiang， senior vice president of Didi Chuxing， and General Manager for Didi Car Rental. “The partnership with Avis Budget Group is a key step in Didis broader initiative to go global as we continue to explore the frontier of innovation with our growing data capacities. Together， we will provide quality local travel experience across the world for Chinas fast-expanding outbound travelers community. We also look forward to building a more connected global mobility network that builds greater momentum for growth on a spirit of openness and sharing.”

Avis is no stranger to embracing transport-centric startups — back in 2013 it acquired car-sharing network Zipcar in a $500 million deal. Now， by signing up Didi as a partner， it gains a direct pipeline into millions more potential customers.