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"The
strategic partnership we've built has been actually more
successful than we anticipated from the beginning," Didi's
Stephen Zhu, vice president of strategy, told reporters in
Beijing on Tuesday.
"Ever since we invested in Lyft, their market share has grown so
much," Zhu said, without giving exact figures. Earlier this
month, Lyft told Reuters it expects to reach $1 billion in gross
annual revenue.
Didi, backed by Chinese tech behemoths Tencent Holdings Ltd and
Alibaba Group Holding Ltd, is locked in a battle in China with
U.S. rival Uber.
Along with Lyft, Didi has also taken stakes in ride-hailing apps
GrabTaxi in Southeast Asia and Ola in India, where each also
competes with Uber, now valued at around $51 billion.
Behind each of these firms bar Lyft, there is another common
backer: Japan's SoftBank Group Corp.
Didi's battle with Uber in China has been especially brutal,
with each firm burning through more than $1 billion, much of it
on subsidized discounts in an effort to lure in hordes of
customers.
"We spent money because there was a competitor there spending
money irrationally," said Zhu, who declined to name the
competitor or say how much Didi spent, but did say that its
subsidies are much lower than the competitors' and that its
market share has increased in China.
"Our competitor is definitely not in great shape," he said, as
it is "fighting a major global war".
Zhu pointed at the rival's heavy spending in emerging markets,
like the home bases of Didi, GrabTaxi and Ola, and its lack of
market share there.
Uber has previously accused its rival of spending wastefully.
A China-based Uber spokeswoman said that Uber has "significantly
greater city coverage and market share" in the U.S. than Lyft,
operates in 66 countries, and has not been "distracted" by
gaming, designated drivers and buses, all areas in which Didi
operates.
In September, Uber said it would enter 100 new cities in China
over 12 months. Additionally, the firm is going to "at least
double or triple our current headcount in China", the
spokeswoman said.
Didi is not currently profitable, though it said it is breaking
even in more than 100 cities. For Zhu, the issue of monetization
is mainly one that lies two to three years down the road.
Didi said it plans to offer its private car service in 400
cities in China by February, compared with the 259 cities it
currently serves.
"There will be a time that people will find by spending money
you will not be able to buy market share," said Zhu. "There will
be an inflection point."
(Reporting by Paul Carsten; Writing by Winni Zhou; Editing by
Muralikumar Anantharaman and Susan Fenton)
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