Professional Documents
Culture Documents
Travis Kalanick had steered his company through five years of remarkable growth.
Its valuation greatly surpassing that of Facebook in Facebook’s early years.
In December 2015, Uber sought its single largest round of venture capital:
$2.1 billion. This funding would bring Uber’s market valuation up to $62.5
billion, more than five times the total annual revenue of the US taxi and
limousine industry in 2014.
However, the future success of the firm depended in part on its ability to
continue to expand in developing markets. And no market was larger or
growing more quickly than that of China.
China had been the site of Uber’s fiercest battles. There are numerous challenges in
china for Uber :
Fierce competition from domestic rivals
Incompatibilities with local market
demands
Rampant fraud
Uphill regulatory struggles
China is so different from the rest of the world. Kalanick knew that the battle for
Chinese markets would do much to determine the future shape of the company.
How could Uber successfully negotiate its legal position with both the central and local
governments? Would Uber, a company used to operating with the advantages of early market
entry and superior technology, be able to overcome competition from strong domestic rivals?
The founding and growth of Uber
Travis Kalanick and Garret Camp unsuccessfully hail a taxi into the city in Paris. They
2008 swore to solve problem & made a pact to create an app that would revolutionize on
demand transportation. Their idea was simple: tap a button, get a cab.
2010 Uber app was first launched in San Francisco. Though initially its services cost 50% more
than traditional taxis, it quickly gained popularity because of its ease of use
2011 Uber launched its platform in New York City. In December of that year it moved into Paris
Uber launched in London and around that time Uber unveiled its most ground-breaking
2012
and controversial product: “UberX.”
Uber app allowed customers to choose from a range of transportation options, including
2013 the original black cars, as well as ordinary private vehicles (UberX), SUVs, and even
traditional taxis.
2014 The company started UberRUSH which delivered bikes to customers in Manhattan. Uber
had 162,037 active drivers operating in 311 cities across the globe
Kalanick boasted of Uber’s 26,000 drivers in New York City, 22,000 in San Francisco,
2015 15,000 in London, and 10,000 in Paris. Uber launched a fundraising round that placed its
valuation at $62.5 billion
Uber’s Uniqueness & A Regulatory System Struggling to Keep Up :
China become a target market of uber for the their future. For this year there
are have a 2,62 million licensed taxi drivers in major China cities. China have
more than ten time 240.000 of licensed drivers taxi in the all of United States.
2015 By the end 2015 users of taxi aplication increased to around 45 million.
Moreover, by 2015, the number of smartphone users in the Mainland was
estimated to be over 900 million more than all the users in the U.S., Brazil,
and Indonesia, combined.
New York City have 13.437 licensed taxi, but in Shanghai have more than
2014 50.000 taxi and more than 90.000 driver does't have licensed.
Uber begin establish their company in Shanghai in the summertime. Uber was a niche service
2013
provider, provider to foreign business and chinese elites.
Company offer Uber COMMUTE, a new product that allowed drivers to choose to offer rides
to passengers headed in similar directions as the drivers themselves at Chengdu location. this
2015 product have a rapid growth also from Hangzhou more than 15.000 private vehicles join with
Uber.
Uber planned to enter 100 new Chinese cities in 2016, roughly one-fourth of the total
2016 number of cities in which they operated around the globe.
Product Localization
In China uber provided exclusively on credit card payments for service, but this presented a
major obstacle for many potential Chinese users, because Uber’s online billing system
therefore limited its users to a minority of the urban elite.
Google Maps’ coverage of China extremely limited (and notoriously inaccurate), Chinese
users preferred the mapping technology of Baidu, Uber China entered into a strategic
2014 partnership with Baidu on December 17, 2014. Uber implemented targeted, localized
marketing campaigns, In Hangzhou, visitors can be used UberBOAT, In Shanghai, Uber users
could book 30-minute helicopter rides to experience the metropolis from a bird’s-eye view.
Uber creating systems for identifying fraudulent orders and blocking drivers who were strongly
suspected of engaging in subsidy manipulation. But Driver continued to develop more sophisticated
methods of trip-faking, and shared information with each other about how to avoid Uber’s detection
system.
Competitive Sector
Two domestic giant competitors : Didi and Kuaidi.
Didi and Kuaidi enganged in massive war for market share in 2014.
Didi and Kuaidi differed from Uber in :
Both firms provide networking services for certified taxi drivers. Only after build up
government and customer relationship, they begin to add zhuanche (private car) like
UberX in U.S.
Both firms developed diversified service such as “chauffeur service”. Customer could hire
chauffeur to drive customer home in the customer’s own car.
Whereas Uber’s customers could pay through customer’s linked
credit card; Didi and Kuaidi offered variety of payment such as :
On Valentine’s day in 2015, Didi and Kuaidi merged and raised the concern of
industry monopoly.
Within China, lines were drawn between Didi-Kuaidi also because of their
main investors in fierce competition with one another.
In response, groups of Uber drivers in several Chinese cities blockaded major
streets, protesting of the seizure of private vehicles. Such a protest of entrapment in
Guangzhou in June 2015 brought traffic on a major road to a standstill for hours.
On April 30, 2015, Chinese authorities raided Uber’s Guangzhou office, seizing
equipment and smartphones.
A week later another raid was carried out on the offices of Uber Chengdu. Days
later, Didi-Kuaidi offices in Luoyang faced a similar raid
The certificate officially sanctioned private drivers to work for an iTNC if they
passed a series of inspections and safety requirements.
Regulatory Challenges (Cont’d)
Two days after Shanghai announced its certification process, the Ministry of
Transportation issued a draft set of guidelines for reforming China’s taxi
industry.
In conjunction with the guidelines, the central government also released a
draft of a new law entitled, “The Operation, Service, and Management of
Internet-based Taxi Companies
????
gray zone, if not give it outright legal
standing?