Chinese money on Uber

Baidu, the "Chinese Google", is strategically investing an undisclosed amount on black car service app Uber, which has met with difficulties in penetrating the oriental market. Uber is the biggest player in the US, with second place lyft left far behind, having raised only one-eighth as much funding and having only a few users and drivers in the cities where it operates. Despite the US and global dominance, the local car-hailing start-ups in China have taken the lead in the market of the rapidly evolving internet services. Coincidentally, the Chinese taxi-hailing app Didi Dache is funded by huge tech companies such as Tencent Holdings (operator of the largest social network in China) and Kuadi Dache (a company of Alibaba Holdings). It is interesting to note that Alibaba is also invested in lyft, which plans to expand internationally next year.

China's rapidly evolving internet-services economy currently claims over 500 million smartphone-wielding consumers and the revenue they control. It is obviously a significantly important market for Uber, despite its 2 year late arrival in the country. Partnering with local giant Baidu is a strategic alliance because it will loosen the central governmental interferences and strict regulations of the country. In addition, Baidu has promised to funnel millions of its users to the Uber app. The Chinese company operates the most used search engine in China, along with a mapping application. Another strategic alliance Uber has made includes the Qatar sovereign wealth fund, which was recently added in order to ward off resistance in another heavy regulatory country.

Uber's efforts to partner with well-connected international giants come naturally after the heavy resistance the app has encountered globally. In India, Uber's largest market outside the US, a nationwide ban of all taxi-hail service apps was implemented following allegations of a woman's rape from an Uber driver. Similarly, other locations in which Uber has halted operations include Spain and the city of Portland, Ore. Other European countries such as Belgium and the Netherlands have halted certain Uber services. Despite resistance, 6 year-old Uber has been an astronomical financial success story with a current valuation of $40 billion dollars, raising $1.2 just last week.

Dimitri Theocharis