Uber may join with car rental app Yidao Yongche to crack China
Mon 18 May 2015
40+ billion-dollar taxi-hailing firm Uber is joining forces with Chinese car rental service Yidao Yongche to ease its rollout into China – a tough market for the American company, which has faced a number of regulatory pressures in the region.
In an official blog statement on the Chinese Weibo platform this weekend, Yidao Yongche, which also goes by the name of Easy Go, posted an image of its logo and that of Uber joined together in a heart, alongside the date ‘May 21, 2015’, and a message in Chinese reading “It’s best to be together.”
Uber has rejected comment on the Yidao Yongche blog post and has not confirmed whether there will be an announcement regarding the partnership on May 21.
A tie-up between the two mobile apps and backer Baidu could prove a wise decision in the face of a difficult Chinese car hire and hailing market and well-established domestic rivals such as smartphone transport service Didi Dache.
At the beginning of the year, Didi Dache teamed up with Kuaidi Dache in a $6bn (approx. £4bn) deal, creating one of the world’s largest app-based taxi-hailing networks. The partnership led rival Yidao Yongche to file a case against the two companies with the Chinese Ministry of Commerce’s anti-monopoly bureau and the National Development and Reform Commissions’ price supervision department. However, with the financial support of cash-rich heavyweights Uber and Baidu, Yidao hopes for greater economies of scale.
Although Uber is backed by China’s leading online search firm, it has still struggled to tackle complicated local regulations regarding the legitimacy of its service. Drivers continually deal with regulatory scrutiny in the Chinese megacities of Shanghai, Chongqing, Guangzhou and Chengdu.
Through its marriage with Yidao Yongche Uber aims to build its local relations in a country where international companies are discriminated against by national and regional governments.