Since making its way to China last year, Uber has grown exponentially in cities like Hangzhou and Chengdu. In fact, during its first nine months in China, the ride-hailing company brought in more than 400 times as many rides as it did in during its first nine months in New York. These numbers come from an email to investors sent by Uber CEO Travis Kalanick, which the Financial Times published Friday morning.
Uber now boasts nearly 1 million trips a day in China–and Kalanick plans to maximize on its momentum by investing more than $1 billion in the country this year, according to the email.
In his letter, Kalanick called China the “number one priority for Uber’s global team” and wrote of the potential for Uber’s expansion in China, a market that many tech companies have struggled to penetrate:
“Today we are live in 11 Chinese cities with an average population of 14 million. Yet there are 80-plus cities with over 5 million people (as a reference, 5 million is roughly the size of Miami, one of the largest cities in the U.S.). Over the next year, we plan to launch in 50 of those Chinese cities. This kind of growth is remarkable and unprecedented. To put it frankly, China represents one of the largest untapped opportunities for Uber, potentially larger than the U.S.”
Uber’s stiffest competition in China has been Didi Kuaidi, a taxi-hailing app backed by Alibaba and Tencent that holds 90% of the Chinese market. Kalanick does not refer to Didi Kuaidi by name in his letter, but notes that a competitor “cloned our core product line and is attempting to transition from its legacy taxi business to a similar P2P model.” He goes on to point out that Uber has “close to 50% share in the non-taxi market,” and that the number is even higher in its largest cities.
Doubling down on its efforts in China could give Uber the edge it needs to take on Didi Kuaidi, which benefits from its familiarity with local consumers. According to Kalanick’s email, Uber has already raised $500 million from its relationships with Chinese technology, financial services, and insurance companies. In December, search giant Baidu partnered with Uber, allowing the company to take advantage of the access granted by popular services like Baidu Maps and Baidu Wallet.
[via Financial Times]