Didi, Lyft Enter Four-Way Alliance to Take on Uber for Rides

  • Ola, GrabTaxi complete global ride-hailing partnership
  • Customers can use home-country app overseas to book rides

Uber Said to Seek $2.1 Billion in New Funding Round

Four ride-sharing service providers are forging an alliance in a bid to counter Uber Technologies Inc.’s growing global presence.

Uber’s American rival Lyft Inc., China’s Didi Kuaidi, India’s Ola and Southeast Asian taxi-booking app GrabTaxi teamed up to offer users traveling overseas seamless access to rides via the same application they use back home. The group will begin introducing joint products in the first quarter of next year, according to a joint statement.

The cross-continental partnership will look to check Uber, which is seeking to raise funding that would value the car-booking company at $62.5 billion, people familiar with the matter said. Chief Executive Officer Travis Kalanick needs the capital to fuel the rapid expansion of his service’s global footprint. Didi Kuaidi has already invested in Lyft, GrabTaxi and Ola in recent months.

“When it comes to massive markets like China, India and the U.S., we believe partnering with local experts makes sense,” Anthony Tan, chief executive officer and co-founder of GrabTaxi, said in an e-mail. “Local understanding, know-how and operations are critical differentiators, especially when it comes to scaling locally, navigating regulatory environments and managing payments.”

Local regulations are one of the more significant potential hurdles that ride-hailing services grapple with. A Philippine court handed down a suspension of app-based ride-hailing services in a lawsuit filed by local taxi and jeepney drivers, according to a Nov. 27 order released Friday. 

Lyft, Didi Kuaidi, Ola and GrabTaxi said they will collaborate and share technology, local market knowledge and business resources. To begin with, their alliance will benefit users who go abroad and want to continue using the ride-hailing app they’re most familiar with.

Asia Expansion

“The partnership with Lyft, GrabTaxi and Ola allows Chinese users unprecedented ease of international travel, and helps each of us improve our own services,” Cheng Wei, chief executive officer of Didi Kuaidi, said in the statement.

Uber and its largest competitors have big ambitions. Already the world’s most valuable startup, Uber is looking to raise as much as $2.1 billion in its latest fundraising round and has filed paperwork in Delaware detailing the plans, according to the people, who asked not to be named because the plans are private.

It is spending aggressively to expand throughout Asia, particularly in China. The country may pass the U.S. to become Uber’s largest market by year-end, Kalanick wrote in a letter to investors in June.

India Wars

Didi Kuaidi raised about $3 billion in a round this year, people familiar with the matter have said. Lyft, Uber’s biggest competitor in the U.S., is currently seeking to raise about $500 million, according to fundraising documents obtained by Bloomberg last month.

Uber is also clashing with its peers in India, where public transportation services in most cities and towns haven’t kept pace with the needs of a growing population.

The startup in July said it would spend $1 billion to fan out across that country. Ola wants to operate in 200 cities in India by 2016, double the amount now, Anand Subramanian, a spokesman for the company, said Friday. Owned by ANI Technologies Ltd., it acquired smaller rival TaxiForSure in March.

Ola and GrabTaxi both count billionaire Masayoshi Son’s SoftBank Group as an investor. GrabTaxi’s other investors include Singapore’s Temasek Holdings Pte and GGV Capital, one of Alibaba Group Holding Ltd.’s backers.

“Ride-hailing through mobile apps is a transformative solution, and it is only just starting to take off,” GrabTaxi’s Tan said. “We will continue to expand into new cities in Southeast Asia and provide more service offerings to people in the region.”

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