Uber Rival Lyft Teams With China's Top Ride-Hailing Serviceand
Didi Kuaidi invested $100 million in Lyft's funding round
Apps to hail drivers in both countries ready next year
Two of Uber Technology Inc.’s fiercest rivals are teaming up to challenge the ride-hailing company in the world’s largest markets.
Didi Kuaidi, the top car-sharing company in China, invested $100 million in Lyft Inc., No. 2 behind Uber in the U.S., as part of an already disclosed funding round that valued the San Francisco-based startup at $2.5 billion. The two companies will share technology and product development teams, they said during a presentation Wednesday in New York.
“This is a step in the right direction. It’s sort of a no-brainer,” Carl Icahn, a Lyft investor, said in an interview. “China has 800 million people living in the cities, and they can’t all have cars. There’s going to be this type of ride-sharing, and Didi is really set up for that.”
Didi Kuaidi and Lyft have challenged Uber, which is valued at $50 billion and operates in more than 340 international cities. Beginning early next year, Lyft users will be able to summon a car for the first time in China using their Lyft app and Didi Kuaidi users will be able to hail a ride in the U.S., John Zimmer, Lyft’s co-founder and president, said Wednesday during a presentation in New York.
“We have strong faith in Lyft’s future in the U.S. market,” Jean Liu, president of Didi Kuaidi, said at the event.
Lyft signaled this strategy months ago, saying that it would likely grow internationally through local partnerships. Uber meanwhile has committed$1 billion to establish itself in China and a similar sum to compete in India.
Alibaba Group Holding Ltd. and Tencent Holdings Ltd. were part of the consortium that Didi Kauidi joined for the Lyft funding round. Alibaba’s investment was a “great sign” for Lyft’s future, Icahn said.
Didi Kuaidi works with more than 1.35 million taxi drivers, 2 million private car drivers and 1 million chauffeurs in China and has been used by more than 200 million people, the company said in a statement. More than half of Lyft’s rides in San Francisco and in New York take place on Lyft Line, the company’s carpooling service.
“From our home base in China, Didi Kuaidi is building China’s largest one-stop, on-demand, transportation service platform,” Chief Executive Officer Cheng Wei said in the statement. “As the industry innovation leader, Lyft will continue to build upon its existing market and brand power.”