Uber rivals Lyft, Didi announce partnership: Chinese partner Didi Kuaidi invests $100 million in deal

By @diplomatist10 on
Uber taxi
An Uber driver's smartphone app is shown in this Uber vehicle en route to Washington Dulles International Airport in Dulles, Virginia September 8, 2015. Reuters/Hyungwon Kang

Even as Uber, the ride-sharing service provider, grows exponentially, the sector is showing signs of consolidation. Its main competitor in the U.S. market, ride-hailing company Lyft has announced a partnership with China’s largest car-hailing company Didi Kuaidi to support each other and to target the common competitor - Uber.

Under the partnership terms, Lyft users travelling in China will get access to the Didi Kuaidi app and Didi Kuaidi clients can use Lyft’s services in the U.S. The deal was announced by the company executives at a press conference in New York, reported the Globe and Mail.

Opening a new era

The partnership will come into force in early 2016, according to Didi Kuaidi President Jean Liu. He described the pact as “a brand new era for the global rideshare industry”.

Lyft co-founder and president John Zimmer said Didi Kuaidi has invested $100-million (AU$142.35 million) into his San Francisco-based company. The investment may scale up further and would pose a higher competitive threat to Uber in its home market.

The pact also allows the two companies to take advantage of each other’s knowledge of local regulations, which had been a problem that stymied many tech companies from entering China. Lyft is present in 65 U.S. cities and had delayed its entry into overseas markets. It is the number two player in the U.S. market dominated by Uber.

Zimmer hopes the partnership will allow Lyft to bring its app to international travellers without losing its focus on important domestic markets, such as New York City.

“Our calculation for the Chinese market is this is absolutely the winning strategy,” John Zimmer said, adding that there is a definite advantage by working with the best player in China.

Uber buying Oakland real estate

Meanwhile, Uber Technologies Inc. is set to open a large office in Oakland, and is buying the refurbished Sears building, which will be opened in two years. The deal is expected to give Uber 330,000 square feet of space in the building. It is expected to make the announcement soon. 

For the San Francisco-based company Uber, this move is a show of its massive growth. The US$50-billion- company has already taken half-million square feet of rented space in three buildings at Market Street and another 423,000 square space is coming up at its new Mission Bay headquarters in 2017.  For Oakland, the deal is a morale booster as its real estate market had not seen a new office building built over a decade.

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