Uber : Managing A Ride in China

- A ride-hailing app

Uber:

Founded by Travis Kalanick in 2009 (Headquarter: San Francisco ,

California)
Uber service was launched in 2010
Uber Services launched officially in 2013 in shanghai, China
At present , Uber services are available in 66 countries and 4700 cities
More rides in the Chinese market outside the united states market.
Different rates for different cities in China
Recently, Uber and Didi Chuxing entered into a transpacific partnership

Using Uber App:

Install an
app on
phone

Enter a
pick up
location

Choose
type of
car

Matching
of a
driver to
rider

Using
GPS ,
find
closest
driver to
riders
location

Billing

Functioning of Uber:
- Mostly depended on drivers without license
- Business model focused on non-experienced drivers
- Embraced various options like Licensed chauffer drivers, car rental
companies, and taxi drivers
- Ubers most interesting feature: Surge Pricing
- Ethical concerns regarding Surge Pricing

Uber Services in China

- Peoples Uber : Not-Profit Ride Sharing

- UberBlack: The Original Uber

- UberXL: Room

for everyone

- UberX :Low Cost Uber

- UberSmart :

- UberENGLISH :

UBERS PARTNERSHIP WITH

LOCALS
Uber + Alipay

Payment solution of
Alibaba
Feasible option of paying
instead of Credit Cards

PARTNERSHIP WITH BAIDU

Mapping support
More Customer friendly interface for Chinese
services
Strategic and Commercial cooperation
$600 million investment in Uber by Baidu
Benefit of 500 million Baidu active users
Leveraging Baidus relationship with local
government
Joint Bid with Baidu for Nokias Here mapping
services

Chinese Market for ride-hailing services:

- Cab services were very expensive and bad experience during rush hours.
- Taxis in China increased by 12.47% during 2005-2013 when Uber entered
into Chinese market in 2013
- Consumers perception : Sellers market
- Supply Demand
- Condition and Quality of services
- More congestion on roads as more private owned cars
- Unavailability of Taxis during rush hours as drivers were not ready to
spend time idling during rush time
- Shanghai : Most important city of China as taxi services were expensive
than all other cities
- Strong players were present in the market including local players.

Competitive analysis of Chinese Transportation services market:

Taxi Drivers

Kuaidi

Competitors for
Uber

Local Competitors
- Yidao
- Shenzhou
- AA

DiDi

DIDI VS KUAIDI

- Partnership with Tencent:

Instant messanger QQ and mobile
chat app Wechat
- Payment solution by Wechat
- Promotion war with Kuaidi

Partnership with Baidu and

Alipay for for mapping services
and payment solution
respectively
Separate service for corporates
Acquisition of Da Huang Feng
(Bumble Bee)
80% market in Shanghai and
Guanzhou
Promotion war with Didi with

Services offered by competitors till june 2015

Didi Services

Kuaidi Services

- Didi Taxi : a taxihailing service

Kuaidi Taxi : A
-Yidao Zhuanche
taxi-hailing service (Chauffeur):

- Didi Kuaiche (fast

ride) :

Yihao Zhuanche
(Chauffeur One):

- Didi Zhuanche
(Chauffeur):

Yihao Kuiache(Fast
ride one): non-profit
ride sharing program

- Didi Shunfengche
(Carpool):
- Didi Daijia (Sub
Driver):

Yidao Services

- Yidao Shijia (Test

Drive):
- Yidao Daija(Sub
Driver):

Challenges for Uber in Chinese Market:

- Merger of Kuaidi and Didi : After effects of a promotional war between
Kuaidi and Didi
- Huge market share possessed by Kuaidi and Didi with approximately 79%
of Chinas Chauffeur market
- Competitive prices offered by all the competitors
- Protests by local taxi drivers
- Chinese government playing a huge role in regulating the ride-hailing
market
- Government endorsed chauffeur service platform Ruyeu
- Strong competition for customer base
- Uber could capture only 8.4% of market by 2015, besides their
competitive pricing and services offered

Whats Next?
- Should Uber follow the steps of market leader who were trying to
effectively buy a greater market share through generous spending?
- Seek another way to gain customers?
- Should they continue their business in China?

Recommendations:
- Continuing their partnership with Baidu, Uber has an opportunity to
increase its online presence in the eyes of customers. So they should
utilize this opportunity.
- Online mobile market has increased substantially from year 2010 till
2015, so increase in smartphone users and internet users give an
excellent opportunity for Uber
- By acquiring evolving digital platforms popular among Chinese
population, Uber should give additional services to their customers
and to increase their visibility.
- Uber should continue their services in China looking at the growth
rate of smart phone users.

Thank You !!!