Uber is so undisputedly dominating the ride-hailing market that it has turned into a verb, leaving Lyft, Sidecar and more traditional taxi services in the dust. But Uber's competitors aren't taking this sitting down.
Lyft and Chinese ride-hailing startup Didi Kuaidi announced a partnership Sept. 16 that would help both companies compete with Uber, which has spread to about 137 cities now.
What this partnership now means that Lyft users in China can now snag Didi rides using the Lyft app, and Didi users in the U.S. have access to Lyft drivers using the Didi app. Even the currency is converted into each app's native currency, so there is no hassle associated with transferring funds.
The partnership is expected to go live early next year. The companies are also reportedly in talks with other transportation apps such as Ola in India and GrabTaxi in Singapore, although there are no details yet.
The partnership between the similar U.S. and Chinese transportation services doesn't come as too much of a surprise, given how Didi Kuaidi joined Chinese companies Alibaba and Tencent as an investor in Lyft.
The partnership is also interesting because of the markets it is trying to compete in. Uber has been trying – and trying hard – to carve out a piece of China's ride-hailing pie. The Didi and Kuaidi apps form China's largest taxi and ride-hailing platform and merged this year to limit rising competition costs, according to Bloomberg. The Chinese company works directly with existing taxi drivers, sidestepping some of the protests that Uber has faced in the country.
So why is it profitable for Lyft to even try to compete with one of the largest and most successful startups in the past decade? The answer is simple – for a smaller Lyft, partnering with Didi Kuaidi means being able to expand heavily into China without having to dole out the kind of funds Uber can and is spending.
Didi Kuaidi President Jean Liu is excited for the company's first international expansion, which is a tough game as we've seen in the case of various bans and backlash against Uber in markets like India and Spain. Nonetheless, she is optimistic a multipartnership system between industry-specific companies across countries can prove to be fruitful – she calls the system "country champions".
