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Didi-Kuaidi seals partnership with Lyft in US$100 million deal

09/18/2015| 8:58:17 AM| ChinaTravelNews 中文

Didi-Kuaidi has invested US$100 million in US ride-share company Lyft, and paves the way for a partnership enabling Lyft to access ride-share service to China.

Didi-Kuaidi has invested US$100 million in US ride-share company Lyft, and paves the way for a partnership enabling Lyft to access ride-share service to China.

Lyft is the biggest competitor of Uber in the US, and Lyft’s partnership with Didi-Kuaidi gives Lyft a foothold in China.

The partnership lets Lyft’s customers tap into Didi-Kuaidi’w network and book hire cars or search for public transportation information as well as ride-share through Didi-Kuaidi when they travel in China.

Lyft’s customers are guaranteed the same level of service they enjoy in the US when they visit China. They can also access Didi-Kuaidi’s service information without downloading Didi-Kuaidi’s app. The service is expected to be available to Lyft’s customers by early next year.

Didi-Kuaidi will provide Lyft customers access to English-speaking drivers, a major convenience to a large number of users, and the service rivals a similar service provided jointly by Uber and Duolingo.

The partnership between Didi-Kuaidi and Lyft could be a clear signal that the two parties will jointly expand the ride-share market globally. A number of ride-share giants have been gaining fundings to support their ongoing expansion into new markets and development of new products and services, and these companies seem to be going after the market share of Uber.

Uber is known to have cornered substantial market demand and have generated more than US$7 billion of venture capital and have a market value exceeding US$50 billion. In the past five years, Uber has seen exponential growth, having expanded its services to more than 300 cities in 60-odd countries.

China has become a hotbed for ride-share start-ups in recent years, and Uber has been throwing money at developing its presence in Asia, especially China. Most evidently, it has been showering tens of million of US dollars and other attractive sales initiatives to build its pools of drivers and users. However, Uber faces roadblocks built by its Chinese nemesis Didi-Kuaidi, which claims 80% of China’s ride-share market.

The partnership of Lyft and Didi-Kuaidi will open up new avenues for Lyft’s expansion internationally. Didi being one of the two major ride-share start-ups in  China enables Lyft’s customers to access ride-share information in China through Lyft’s app. Didi-Kuaidi will supply its pool of drivers to deliver services for Lyft’s customers. The reciprocal arrangement also enables Didi-Kuaidi’s users to access Lyft’s ride-share information and services through the Didi-Kuaidi app when they visit the US.

John Zimmer, co-founder and president of Lyft, said the partnership will provide the best ride-share solution for its US users visiting China, as it will enable them to get a ride before they disembark the plane in Beijing.

The partnership will also help Lyft clear obstacles in venturing into China. Zimmer said that the company faced various degrees of complication when eyeing markets like China due to cultural differences, and it helps that Didi-Kuaidi has a wide network of business partners in various cities.

Zimmer did not disclose if the partnership with Didi-Kuaidi involves investments or service fees for Didi-Kuaidi.

The partnership between Lyft and Didi-Kuaidi is believe to help both parties alleviate a certain degree of pressure from international competition, and both believe it will bring more opportunities in the future.

Last week, Didi-Kuaidi announced it raised another round of funding to the tune of US$3 billion. Statistics show that China received 2.093 million visitors from the US in 2014 and 2.188 million Chinese people visited the US in the same year. (Translation by Shuk)

TAGS: Didi-Kuaidi | Lyft | Uber | Investment
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