Chinese, USA ride-hailing services form alliance

Representatives of Didi-Kuaidi and Lyft said on September 16 in New York that people can use the apps already on their smartphones to arrange rides through the other company. It’s no secret that this partnership is meant to let the companies overtake Uber. This effectively strengthens Kuaidi-Didi’s ecosystem, putting greater pressure on Uber-China and BIDU. In my view, the Lyft model could potentially be superior to that of Uber in that increased interaction between the passenger and the driver could result in long-term stickiness of the platform. Lyft operates domestically and, although it is valued at an impressive $2 billion, that still pales in comparison to Uber’s aggressive, worldwide expansion and eye-popping $51 billion valuation.

Lyft was founded to reconnect people and communities through better transportation. The company had also announced that it would invest $1 billion in India over the next 6-9 months. Didi’s finances have also come into question.

But Lyft and Didi’s approach has something Uber’s doesn’t.

Lyft, the No. 2 USA service and operating in about 65 U.S. cities, has delayed expanding internationally, despite saying in early 2013 that it would be a global service by the end of the following year.

In fact, South Korea has vowed to shut down Uber’s operations in the country.

Zimmer said Lyft’s business is “stronger than ever and that the company’s business in New York City alone has tripled over the past few months”.

Ths isn’t entirely unexpected.

Didi Kuaidi president Jean Liu said the partnership, which goes live early next year, opened “a brand new era for the global rideshare industry”.

As part of the global partnership, Didi will be investing $100 million in Lyft.

The taxi hailing and aggregation space is quickly turning into a hot zone as the war between Uber and Ola extends Indian borders.

Despite being buffeted by regulatory hurdles, both Ola and Uber have been aggressively rolling out new services, discounting, announcing millions in investments along with introducing driver initiatives as competition to corner market share intensifies in Asia’s third largest economy which has seen smartphone usage grow exponentially.

Didi Kuaidi may be looking for other partners as well-rumors are floating that similar partnerships are in the works with ridesharing companies in India and Singapore.

“Our calculation for the Chinese market is that this is absolutely the winning strategy”, Mr Zimmer said in a phone interview following the press briefing.