Mainland market too big to say no: experts
Uber Technologies Inc, the U.S.-based car-hailing service company, said Wednesday it would continue to expand in the Chinese market, even as regulations on the ride-hailing industry loom.
Uber, which now operates in 23 cities in the Chinese mainland, will expand to 100 cities, Liu Zhen, head of Uber's China strategy, told a press conference Wednesday in Beijing. She said the company will give priority to every Chinese city with a population of more than 3 million.
At the press conference, Uber announced that starting on Thursday, it will offer a car-pooling service called uberPOOL in five major cities, namely Shanghai, Chengdu in Southwest China's Sichuan Province, Hangzhou in East China's Zhejiang Province, Guangzhou and Shenzhen in South China's Guangdong Province.
It will launch uberCOMMUTE services in Beijing, Shanghai and Shenzhen, Guangdong Province, next month.
Uber will also establish an operating headquarters in South China next year to boost growth, increase efficiency and expand services to more cities in that part of the nation, said Luo Gang, regional general manager of Uber's operations in South China. The move is not intended to "separate its management" from the company, Luo told the Global Times on Wednesday.
However, Uber and other ride-hailing services in the Chinese mainland face regulatory uncertainty, with the central and local governments drafting policies on the booming sector.
The Ministry of Transport issued draft regulations on October 10 that require cars used for ride-hailing services to be registered for commercial use and drivers to pass qualification tests. Operators would need to obtain licenses from local governments, and they would not be allowed to charge below-cost fares to undermine competition.
Experts said the draft regulations would deter many potential drivers and significantly affect the ride-hailing industry.
Uber downplayed the impact of the proposals, calling them "just a process of integration" between the policy-making level and the implementation level.
Zhang Xu, an analyst at Analysys, said the proposals need "major changes" to adapt to a new business model that's been welcomed by drivers, passengers and even top officials.
Premier Li Keqiang has always stressed innovation and the sharing economy.
Uber's expansion plan for China is a "natural" step, said Liu Dingding, an independent industry analyst.
"This is a multi-trillion-dollar market, and it is still growing at a rapid pace and far from being saturated," Liu told the Global Times Wednesday. That's why Uber is "relentlessly" pursuing its plans in China, she said, noting that the company still has room to gain market share in China, given its technology and financing capacity.
The Chinese market is currently dominated by Didi Kuaidi, Uber and UCAR Technology Inc, which had over 70.55 million, 13.6 million and 11.05 million active users respectively in the third quarter of the year, domestic news portal 163.com reported Tuesday, citing the latest data from Analysys.
Uber has said it would invest as much as 6.3 billion yuan ($ 986.6 million) in China, but Liu said the actual number could "far exceed" that.
Liu noted the company has completed a new round of fundraising in China and will announce further information soon.
