IN REVERSE

This ride-hailing giant’s global expansion playbook is the opposite of Uber’s

When Uber first began expanding widely outside of the US, its strategy was simple—identify a new market and barge right in.

More than a year after it acquired Uber’s China operations, Beijing-based ride-hailing giant Didi Chuxing is expanding abroad as well. And it’s taking a more cautious, less aggressive approach than Uber’s.

Over the past several months, Didi has formed partnerships with local businesses and sealed investments in domestic ride-hailing companies, with the latest such move announced Friday (Feb. 9). Didi and Japan’s Softbank, an early backer of Didi (and more recently Uber), announced a partnership to provide app-enabled ride-hailing for taxis in Japan. Trial services in at least four cities, including Tokyo, should begin this year.

Didi’s partnership with SoftBank follows similar moves in east Asia. Earlier this month the company released a new app for Hong Kong that lets users hail local taxis, and that transitions automatically to Didi’s China-facing app when over the border. And in late January the company entered Taiwan through a licensing agreement with local tech company Ledi, with an app that also lets consumers hail city taxis. Didi’s services in these cities are more pared down than in China, where Didi offers peer-to-peer ride-hailing, along with bike rentals, short-term car rentals, minibuses, and even designated drivers.

These launches follow Didi investments in Uber competitors outside of Asia. In early January Didi acquired a controlling stake in 99, Uber’s main domestic rival in Brazil. In August 2017 it invested in Taxify, a ride-hailing company active in Europe and Africa.

This combination of investments and partnerships contrasts starkly with Uber’s initial global playbook. The company would enter a market independently, with minimal government involvement and no partnerships or investments in local ride-hailing companies. It also typically (though not always) avoided working with taxis, instead entering cities with a high-end UberBlack service that paired riders with licensed chauffeurs. Only later would it roll out its flagship peer-to-peer service. It aimed for speed, not permission. Over five years after it began launching outside of North America, Uber is now in 77 countries.

This aggressive approach marks one factor behind Uber’s struggles in Asia, where policy hurdles and tough competition have prevented it from thriving. It has only recently begun partnering with taxi companies across the continent. While it entered Taipei in 2013, for example, regulatory backlash and steep fines from the government led it to close its peer-to-peer service and launch a taxi-centric app in 2017.

“Didi is pursuing a flexible approach to international expansion rather than a one-size-fits-all, and remains focused on bringing value to users, including riders, drivers, and transportation managers,” a Didi spokesperson said in a statement.

It’s not clear if Didi’s conciliatory approach to expansion will make it more successful than Uber abroad—but barging in does not seem to be an option.

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