Lyft teamed with this Chinese ride hailing company to take on Uber
Didi Kuaidi, Uber’s biggest rival in China, has invested $100 million in ride-hailing startup Lyft, the companies said on Wednesday.
Didi Kuaidi made the investment last spring, along with Rakuten, Carl Icahn, and others. Rumors of the Chinese ride-hailing behemoth’s investment first surfaced in a report from the Wall Street Journal last week.
As part of the deal, the two companies are also partnering to let their customers book rides through the other, which is planned for early next year, Lyft President John Zimmer said during a press event. So when Didi Kuaidi riders visit the U.S., they’ll be able to request Lyft rides, and the same for U.S. passengers who travel to China.
Little known in the U.S., Didi Kuaidi is China’s biggest ride-hailing company, offering a range of services including private rides, carpooling, taxi-hailing, and even commuter buses. The company says it has 200 million registered passengers.
Unlike its main rival, Uber, Lyft doesn’t operate outside the U.S. despite having hinted a couple of years ago that it wanted to do so. The partnership with Didi Kuaidi will be the first time it’s offering an international service to its customers, while avoiding the huge investment of setting up shop abroad.
The relationship between the two companies is not surprising, as they have a common enemy: Uber. The ride-hailing competition in China has become especially fierce in the past year or so, even leading to then-competitors Didi Dache and Kuaidi Dache to merge earlier this year. With more than 800 million urban residents and a car ownership rate of only 10%, China represents a huge market opportunity for ride-hailing companies.
Zimmer declined to comment when asked whether Lyft was planning similar partnerships in other countries.
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