BEIJING, Dec 7, 2015 - (ACN Newswire) - People's Daily reported that according to investors, Uber's Asia strategy is getting seriously thwarted by the robust growth of Didi Kuaidi and its allies. (http://finance.people.com.cn/n/2015/1206/c1004-27894168.html)
Uber is spending USD 200 million-300 million per month to promote its services in the Asia-Pacific region amid challenges from Didi Kuaidi and other local competitors, People's Daily reported, citing Zhu Xiaohu, managing partner of GSR Ventures, an investor in Didi Kuaidi, China's rideshare industry leader.
Word had it that Uber lowered its valuation to USD 62 billion from USD 70 billion to complete the latest financing round. Zhu, speaking at a year-end business conference, said Uber's cash burn in China is not sustainable. The company seeks to raise as much as USD 2.1 billion this time and spend USD 1 billion in China, according to a Dec. 4 report by Bloomberg.
Uber is spending aggressively outside of the US to compete with Didi Kuaidi in China, Ola in India and GrabTaxi in Singapore. An alliance formed by the three Asian companies, along with Lyft in the US, holds USD 5 billion of cash in total, dwarfing Uber's USD 2.5 billion, according to Zhu. The alliance said last week it plans to make their car-hailing apps cross-compatible.
Didi Kuaidi's daily chauffeured car orders are twice of Uber's globally and six times more than the US company receives in China, the report said, citing unspecified statistics. Didi Kuaidi has 10 times more chauffeured vehicles and drivers than Uber and its costs are less than one-fourth of the latter, it said.
Didi Kuaidi has an 83% share in China's online chauffeured car-hailing market in Q2, compared with Uber's 16%, according to a report by Analysys International.