How Uber is Flourishing in China Despite Government Ban
Dino Lirios | | Feb 09, 2015 12:58 AM EST |
(Photo : Reuters ) Following a rape charge on an Uber driver, the mobile taxi service is implementing new safety precautions.
Even when the Chinese government has issued a ban on unlicensed private-car hire, Uber Technologies Inc. is still flourishing due to a crafty move by the corporation that circumvents the ban.
Instead of partnering with individual car owners, Uber outsmarts the government ban and has imposed the strategy of working with vehicle-rental companies instead. These services are available in nine Chinese cities that include Beijing and Shanghai.
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Candice Lo, head of the Uber's expanding company arm in China, said that they have changed and tweaked the business for the local Chinese market. In a phone interview, she said that a lot of how Uber is branded as a business is done differently in China.
Originally based in San Francisco, Uber looks to expand and gain more revenue from China. Its expansion was slowed in countries like South Korea and Columbia due to legal challenges and regulatory hurdles.
In coming to China though, Uber finds itself playing catch up in a market that is already dominated by Alibaba Group Holding Ltd.'s Kuaidi Dache and Tencent Holding Ltd.'s Didi Taxi.
A part of that market that Uber is targeting in China are the tourists who are not able to speak Chinese. As such, a new feature has been introduced to the Uber system providing English-speaking drivers to draw out tourists and drive them around.
In addition, they have also partnered up with hotels and restaurants in Guangzhou, the acclaimed food capital of China, in an effort to provide transportation for the local and international foodies.
With all the new features though, Hong Kong based analyst Wang Chao says that they may not be enough to compete against the local players. Didi and Kuaidi already hold almost 99 percent of the market, with 154 million registered users in more than 300 cities.
However, that has not deterred Uber from their goal.
Lo says that China is a major priority for the company, as it is one of the fastest-growing markets in the world.
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