China’s ride-hailing app leader Didi Chuxing (formally Didi Kuaidi) announced on Thursday a USD 100 million investment in Lyft, which is Uber’s biggest rival in the U.S., according to Sina Tech.
The investment will also allow for a strategic partnership between the two ride-hailing companies, which will see users ordering rides using their respective apps in the U.S. and China.
The partnership will benefit travelers between China and the U.S.
Data from the U.S. International Trade Administration shows travelers between the two countries have reached 7.8 million trips in 2014.
Didi Chuxing and Lyft will share resources and integrate their navigation systems, payment systems and communication platform. Liu Qing, chairman of Didi Chuxing said the partnership will enable both companies to leverage their technology and big data to expand in other markets.
Cheng Wei, CEO of Didi Chuxing, told Sina Tech that the goal for this partnership is to build an efficient and sustainable global commuting alliance.
“Didi Kuaidi is far ahead in the Chinese market and it has valuable local resources,” John Zimmer, co-founder and president of Lyft told Sina Tech.
“Nowadays every ride-sharing company faces different challenges and market opportunities in different regions, we believe cooperating with a local leader is the only way to expand and succeed in the Chinese market.”
Didi Chuxing commands about 80% of the ride-hailing business in China according to official data. Still, the company faces challenges in the domestic market when local authorities sometimes crackdown on private drivers without taxi licenses using the platform as well as Uber’s, which has about 11% of the ride-hailing market.
Yesterday, The Ministry of Transport of China was reported to have drafted countrywide regulations to curb the use of Internet-based ride-hailing services. The cars and the service platforms will be required to have transportation permits and drivers will need to have taxi licenses.
Taxi drivers in about 20 Chinese cities have protested against car-hailing apps since last year,
Didi Chuxing’s CEO, Cheng Wei, said at a press conference announcing Didi Chuxings’, ‘Didi Chauffeur’ service in July.
“We have struggled to survive in an extremely inhospitable environment. It’s been like walking on a mountain of knives, or swimming in an ocean of fire,” Cheng said.
(Photo from iFeng Tech)