July 8, 2015
(Ferenstein Wire) – China’s taxi-hailing monopolist, Kuaidi, has raised a whopping $2B to compete with the surging presence of Uber. Kuaidi controls 99.8% of the taxi hailing app market, after it recently merged with its Chinese competitor, Didi.
Even with about a year lead time and a near monopoly on the taxi hailing market, Uber’s private car service is proving to be an impressive competitor. According to public statements by CEOs of both transportation companies, Kuaidi sees about 3 times as many rides per day (3 million), as its western competitor (Uber sees 1M).
To close the existing gap, Uber is reportedly raising $1B in funding; given the company’s crazy rapid growth around the world, Uber could potentially outcompete the taxi business, as it has done in San Francisco and other states where it has had a longer presence.
The transportation race in China isn’t just a fascinating business battle, but a totem of how Western private companies can compete in some of the most restrictive markets on earth. It’s not quite communism vs. capitalism–but it’s close.
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