Uber and Didi Compete in China
Most likely, everyone reading this will have heard of Uber. The readers may not have heard of Didi. Uber is a ride sharing program that is used worldwide. It serves 785 metropolitan areas and has an estimated 100 million users. It was founded in 2009 by Travis Kalanick and Garrett Camp and currently employs around 16,000 employees worldwide. Uber has been a powerhouse in the industry since its founding. Then came China.
In China, there was a company formed by Cheng Wei, called Didi. They were able to dethrone Uber as the ride-sharing app used in China and force Uber to sell their Chinese business to them for shares in Didi and $1 billion in cash. Cheng Wei earned the nickname from Bloomberg “Uber Slayer”.
In early 2015, Uber was the more dominant force in China. They were established and had a more stable company than Didi. Cheng said of it, “At that time we felt like the People’s Liberation Army, with basic rifles, and we were bombed by airplanes and missiles, they had some really advanced weapons.” Later in 2015, Cheng changed strategies. He offered free rides on his software. Uber matched. Didi even invested in Uber’s competition in the US, Lyft. Both companies raised money from outside sources to finance the battle in China. Didi had Apple; Uber had Saudi Arabia’s Public Investment Fund.
Both sides agreed that this had to end. After weeks of negotiation, Kalanick and Cheng agreed to terms over Baijiu, a traditional Chinese drink. Cheng said at the time “We are the craziest companies of our times, but deep in our heart we are logical. We know this revolution is a technology revolution, and we are just witnessing the very beginning.”