Uber is aggressively expanding in China, and reportedly paying drivers large amounts to switch over to its service. The New York Times’s Paul Mozur and Mike Isaac report that the transportation service is giving drivers bonuses of to up to three times the amount of their fares in an attempt to consolidate its foothold in the Chinese market. China’s market is filled with well-placed taxi companies and local rivals like the popular startup Didi Kuaidi, backed by Alibaba and Tencent.
In late May, Uber claimed it created more than 60,000 jobs in China. The company faces an uphill battle against Didi Kuaidi, which has more than 90% of the Chinese market. Didi Kuaidi itself is the result of a $6 billion merger between two transportation startups, Didi Dache and Kuaidi Dache, earlier this year. Uber entered into a partnership with Baidu for the Chinese market; the assistance of a strong local partner is necessary due to its relatively small market share.
Davis Wang, one of Uber’s top employees in China, told CKGSB Knowledge in late 2014 that “For Uber, we’re really focusing on developing our brand first. We just put up an Uber sign in front of Shanghai’s Ritz Carlton. That’s the second five-star hotel with an Uber stand in the world–the first is Le Royal Meridien Shanghai.”
Wang also described a new program in China in which well-known entrepreneurs become Uber drivers. “Now more than 10 CEOs have enlisted, and we don’t pay them at all to do this. They just think that it’s cool to drive for Uber.”
The company is also localizing for the Chinese market. Uber introduced a nonprofit, ultra-low-cost service called People’s Uber late last year where riders only pay enough to compensate drivers for gas, tolls, and other expenses. In a possible nod to China’s nominally communist government, People’s Uber cars are branded red in Uber’s app.