Didi Chuxing beat Uber, but was it fair and square?
Soon after Uber all but admitted defeat in China last week, the narrative emerged that the American firm's failure came down to unfair home-ground advantage for Didi Chuxing, the main domestic competitor.
Sure, it's easy to point to other companies that have run up against barriers to entry in China. The country has accrued something of a reputation for having spurned giants like Google, Facebook and Amazon for homegrown companies.
Uber fit nicely into that group, but blaming China's government for its shortcomings trivialises how well Didi Chuxing managed to steadily take over the market over the years -- and how well it had integrated itself into the country's existing web culture.
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Didi Chuxing -- formerly Didi Kuaidi -- itself is a merger of two warring ride-hailing apps, Didi Dache and Kuaidi Dache. They had already spent a couple of years leaking hundreds of million dollars trying to undercut each other on prices bye the time Uber decided to enter the market in 2014.
In response, the two merged in early 2015 and formed a formidable front against the U.S. firm. With backing from two of China's largest internet firms, Alibaba (a Kuaidi Dache investor) and Tencent (with Didi Dache), the married entity was able to tap into some of its investors' successful products.
Tencent's WeChat messenger is a prime example. WeChat is the dominant chat app used in China, and by 2014 people were already booking cabs from within WeChat's interface without leaving the app.
This worked seamlessly with the all-in-one experience that people were already accustomed to within WeChat, which was already commonly used to do everything from splitting the tab, paying for bills and even cashlessly pay small merchants at roadside stalls.
Additionally, with Tencent partnering and acquiring coupon sites, WeChat was able to push discount deals at restaurants and stores -- and cab rides -- directly to users. This was another marketing tool used to undercut Uber.
By mid-2016, Didi had a reported 99 percent market share of taxis and 87 percent of privately driven cars. It spread to 400 cities, while Uber China had just 60 before this week's merger.
Lyft, the U.S. number two ride-sharing app, has made tentative steps into China, but chose to cooperate with Didi instead of fighting it. Lyft took an undisclosed amount of investment from Didi in September 2015, and the two started allowing cross-platform cab booking in April this year.
But with the Didi-Uber China merger, Lyft looks like it might be left out cold. In reaction to the news, Lyft put out a statement taking a swipe at Didi, saying: "We always believed Didi had a big advantage in China because of the regulatory environment. The recent policy changes are exactly why we did not invest in the region.
"Over the next few weeks, we will evaluate our partnership with Didi."
Ouch. In the Chinese ride-sharing landscape, all new entrants are merely pieces on a chessboard belonging to Didi.
Topics Uber
Victoria Ho is Mashable's Asia Editor, based in Singapore. She previously reported on news and tech at The Business Times, TechCrunch and ZDNet. When she isn't writing, she's making music with her band
