Competition in the taxi-hailing service market in China is taking business to the next level. This week Didi and Uber announced that they have obtained new funding and are planning to expand in the market.

In a statement on Tuesday, Uber revealed that it will now be stretching its services to more than 55 counties including the central and southern provinces of Guangdong, Hebei and Hunan. The company had earlier expressed its desire to serve 100 cities in China this year. If this plan is realized, China will surpass the United States as Uber's biggest market worldwide.

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Meantime, Didi also announced that it has received funding from China Merchants Bank. Through this partnership, the two companies revealed they will be working closely on areas including auto finance and mobile payment. 

The company has also cooperated with a local lender allowing Didi drivers to buy vehicles on credit via its online auto marketplace, a platform the establishment will launch soon. This initiative is a fulfillment of the company's desire to expand into e-commerce and auto-services.

Over the past years, Didi and Uber have shown intense competition and aggressiveness in expanding. After two major companies merged to create Didi early last year, the firm has already gathered funds amounting to billions of US dollars. The company is well supported by both its local and international investors including early backups like Alibaba, Tencent and Temasek and new joiners such as China Investment Corp. as well as Ping An Ventures.

On the other hand, the American ride request company has been seeking aids for its China opeartions. Among its backers are Baidu, HNA Group, Vanke and Guangzhou Automative Group. 

In Uber's press release on Tuesday, the company said that its operation in China is now worth $8 billion, this is more than half the value of its rival Didi at $16.5 billion. Furthermore, it has raised $2 billion from its Chinese investors to fund both its China and international enterprise.

Despite the fact that the industry is booming - a recent study revealed that almost 97 million people utilized cab-hailing services - the government is blaming such platforms for the notorious traffic jam in big cities such as Beijing. 

However, "Their success reflects the emergence of shared economy as an inevitable trend in China," said Sandy Shen, a research director at Gartner, a tech consultancy firm. 

TagsUber, Didi, taxi hailing app, ride-hailing app, China Merchants Bank