In-Depth Integrative Case 4.1 How Didi Fought Uber in China and Won; Next, Taking On the World

Introduction Technology is constantly evolving, and firms who have leveraged the unprecedented growth rate of modern innovation have seen quick success. Didi Chuxing, China’s largest ridesharing servicer, is no exception. With roots dating back to 2012, Didi has quickly gained Chinese support, and with over 7.4 billion rides completed in 2017, Didi’s emphasis on technology has allowed the young ridesharing firm to gain monopolistic authority within China.1 Rising transportation demand in China has created intense ridesharing competition within China, and Didi’s early expansion efforts were obstructed by competitors, most notably Uber, who entered China in 2014. With locations in over 60 countries, Uber had the experience needed to quickly gain a foothold within China. Hefty subsidies, discounts, and marketing promotions propelled the competitive battle between Uber and Didi, and the immediate influence of Uber’s reputation led to a quick deterioration of Didi’s market dominance. Nonetheless, governmental protectionism, strong Chinese partners, and a unique cultural landscape in China presented Didi with the competitive edge needed to halt Uber’s expansion.2 Fierce opposition weakened revenues, and each firm reported losses exceeding US$1 billion within the first year of competition.3 As a result, in August of 2016, Uber and Didi agreed to US$35 billion alliance in which Didi would acquire Uber China. In return, Uber would receive an initial 5.89 percent stake in the combined company, and with preferred equity interest, Uber’s total position amounted to 17.7 percent.4 This announcement effectively halted Uber’s effort to compete head-on with Didi in China and confirmed Didi’s dominance over the Chinese ridesharing market. The acquisition of Uber China meant only temporary peace to cut throat ridesharing competition, and new wars are beginning to emerge as the two firms each strive to gain global ridesharing dominance. Uber is now faced with a difficult situation as Chinese authority and growing revenue streams inch Didi closer to global superiority. As Didi prepares to expand into international markets, it is only a matter of time before these two players clash once again.5

An Evolving Chinese Ridesharing Market China has quickly become the world’s largest provider of ridesharing services, and in 2017, a total of 20.81 billion rides were offered through these platforms. Today, ridesharing accounts for almost 2 percent of all transportation within China.6 While ridesharing may retain only a modest presence, it is nonetheless the fastest growing method of transportation in the nation

as these services have been available for less than a decade. Rapid growth justifies China’s US$30 billion ride hailing market valuation, and continued development has led analysts to believe that this market will double in size by the end of 2020.7 Ridesharing within China offers a sustainable solution to China’s road congestion and emission pollution issues. According to the World Bank, China’s transportation sector accounts for nearly 55 percent of oil consumption, and transportation related carbon emissions amounted to nearly 900 million tons in 2016.8 Furthermore, a recent study conducted by the Asian Development Bank found that 7 of the 10 most polluted cities in the world are located in China. The World Health Organization has additionally reported that only 1 percent of all Chinese cities meet air quality standards, and in some cities, particulate matter pollution is more than 10 times the WHO limit.9 Chinese consumers are more willing to try new products and are more accepting of new technology, leading to a quick embrace of ride hailing services by both Chinese citizens and governments. A recent study by Bain and Company noted that 62 percent of Chinese respondents listed e-hailing services as their primary driver of increased mobility preferences. Conversely, less progressive nations such as the U.S. and Germany had only 29 percent and 23 percent of respective respondents list e-hailing as a mobility preference contributor.10 Governmental vehicle limitations have also contributed to mounting ridesharing support. In an effort to curb pollution and congestion, China has implemented many regulations aimed at limiting the number of vehicles on the road. In Beijing for instance, a city with some of the most congested roads in the world, citizens are only eligible to drive on predefine dates based on their license plates numbers. Furthermore, mounting taxes, fees, and restraints associated with purchasing and operating a vehicle have forced many to rethink transportation.11 In 2016, the country legalized ridesharing, thus becoming the first developed country to nationally do so. This legislation would require all drivers to pass national background checks and car inspections, and China’s willingness to embrace ridesharing shows its eagerness to improve domestic transportation options.12

Didi Chuxing: Building a Better Journey Growing transportation concerns within China increased the demand for new and innovative methods of travel. As a result, in 2012, rideshare servicer Didi Dache was established. Founded by Cheng Wei, a former Alibaba employee who had grown tired of the difficulty associated with hailing a cab during rush hour, Didi Dache received early national embrace.13 Ridesharing expanded quickly, and by 2015, China’s rideshare servicers were transporting over 150 million monthly users. Early success was headed by both Didi Dache and competitor Kuaidi Dache, and the combined position of these two firms amounted to nearly 95 percent of China’s ridesharing market.14 Competition between these two service leaders grew in hostility, and by February of 2015, the firms agreed to end their competitive battle through a merger. The merged company would

rebrand itself as Didi Kuaidi, later to be changed to Didi Chuxing, and valuations for the newly formed ridesharing monopoly were placed at around US$6 billion.15 Merging not only ended competition, but it also allowed for multiple legal and regulatory advantages, especially in China’s more restrictive cities like Shanghai and Beijing where drivers were prohibited from using multiple ridesharing apps.16 Additionally, Uber’s expansion into China in 2014 meant that combining resources and knowledge would be the only way either company could survive. By the time the merger was finalized, the combined firm controlled an 80 percent majority of China’s private car hailing market.17 Didi Chuxing now offers upscale limousine rides, food delivery services, inner city busing, and bike sharing in addition to its typical express ridesharing. While Didi has yet to expand outside of China, heavy international investments have allowed the firm to gain a global footprint. Didi now has relationships with Lyft in America, Ola in India, GrabTaxi in Southeast Asia, 99 in Latin America, and Taxify in Europe (see Figure 1).18

Figure 1 Didi Chuxing’s Global Partnerships Source: Bhuiyan, Johana, and Rani Molla. “Didi is Chasing Uber Around the World.” Vox, August 10, 2017. https://www.vox.com/2017/8/10/16114736/didi-china-ride-hail-compares-uber-globally. Didi Chuxing has the goal of “building a better journey,” and the firm’s vision of “Becoming a global leader in the revolution of transportation and automotive technology” describes how the firm plans to achieve this ambition. These ideas are central to the firm’s nearly 10,000 employees, half of which are engineers and data scientists.19 Didi has supported its vision through heavy investments in machine learning, artificial intelligence, and electronic vehicles. Innovation has spawned expansion, and investments by Apple have resulted in a shared Silicon Valley research and development lab that focuses on AI advancement and self-driving

technology. For Didi, this lab is only one of three research facilities, and the firm has been using machine learning and data collection to improve the fluidity of its services since its founding.20 Didi Chuxing’s emphasis on improving its services through innovation is most clearly demonstrated through its Smart Transportation Brain technology. Through a partnership with the Chinese government, Didi has been able to combine its camera and sensor data with governmental road reports to proactively manage traffic in real time. For instance, data sharing has led to the installation of smart traffic lights that decrease road congestion. The severity of transportation issues within China has led to governmental backing as both Didi and the Chinese government share similar goals of traffic alleviation. Governmental support, mixed with an environment that encourages ridesharing, [has] greatly contributed to Didi’s dominance within China.21

Managing Mounting Threats While Didi’s capabilities have created success, generating a consistent profit remains a major challenge for the firm. Cheng Wei has often hinted at the private firm’s stressed financial situation, and in 2018, Didi was rumored to have a net loss of US$1.6 billion. High losses are a result of rider subsidies, and Didi is known for underpricing competitors and attracting new users through deep discounts. Driver shortages—a result of regulations that prohibit migrant workers from driving—have also cut into revenue.22 Although most ridesharing competitors, like Uber, have yet to generate a profit, the extent of Didi’s losses in such a concentrated market are particularly worrisome for the firm.23 Didi’s per ride revenue averages around 16 cents, and with as many as 30 million daily rides given, the profit potential for the company is enormous. Nonetheless, post subsidy profit can be as little as 1.6 cents and total 2018 subsidies were estimated at US$1.7 billion. The firm has only been able to survive in such a loss heavy environment due to the support of strong domestic partners and partnerships with Alibaba, Softbank, Tencent, and Apple. These investments have generated US$12 billion of on-hand cash, which continues to fund subsidies, tech innovation, and expand the firm’s international presence. While Didi may remain a loss leader for some time, the growing ubiquity of the firm’s presence will most likely lead to profits in the long run.24 Recent attacks against riders have weakened Didi’s perception of safety. Even though Didi’s accident rates are far lower than that of a traditional taxis, there has been much backlash against the firm ever since two female passengers were killed by Didi drivers in early 2018. Both incidents were directly linked to faults within Didi’s platform, such as the firm’s lack of receptiveness to user complaints. In response to these attacks, Didi announced that it would not focus on profits until all safety concerns were addressed. Didi has since introduced random biometric ID testing in addition to the selfie-based login system previously used to identify drivers and added an in-app SOS button that is linked to a special police response team focused on dealing with transportation threats. Wei hopes that these efforts will revitalize Didi’s damaged image.25

Negative backlash has not halted Didi’s push forward, and international support is growing so rapidly that valuation estimates have begun to rival that of Uber.26 Similarly, Fortune magazine has ranked Didi 53rd on its 2018 list of companies changing the world due to the progress the firm has made in limiting road congestion and decreasing transportation-induced environmental impacts.27 Didi’s influence has led to Cheng Wei being listed as Forbes Asia’s 2016 Businessman of the year, and this innovative mentality has also resulted in Didi being ranked 4th on CBNC’s 2018 Disruptor 50 list, a ranking that presents the top companies changing their respective industries.28

China’s Business Environment Rapid growth has expanded individual wealth, and more than half of all households within China will be considered middle class by 2022. The nation’s per capita disposable income is now around 28,000 yuan, or 4,000 dollars.29 Increasing wealth has shifted preferences and discretionary spending has grown 13.4 percent since 2010. As wages and consumption rise, the population is beginning to spend more on entertainment, relaxation, and travel—all of which influence ridesharing demand.30 New spending patterns have also attracted foreign firms, and many now invest heavily in this high-growth market. Within the last 10 years alone, China has received over 20 percent of all developing countries’ FDI, and with over US$100 billion invested annually, China has become one of the most heavily targeted nations in the world.31 Although China has opened its markets, cultural and regulatory obstacles have nonetheless obstructed many foreign firms’ entrances. China operates under a hybrid economic system, meaning that some sectors are market-based, while others remain state-owned and protected. Most industries fall in the middle of this spectrum and governmental backing of domestic firms has limited the entrance of foreign competitors.32 Foreign tech and retail giants, such as Google and Walmart, have faced many restrictions within China, and the nation uses protectionism as a tactic to grow local economies. This protectionist emphasis explains why Chinese firms consistently outperform foreign rivals.33 Business etiquette varies significantly within China, and many western firms have historically found it difficult to operate within the nation’s rigid business environment. Within China, leadership is synonymous to loyalty and it is taboo for subordinates to question upper management. Strict group structures heavily influence the way in which management operates, and many Chinese communities believe that western leadership hierarchies are too relaxed. These leadership differences were key contributors to the early hostilities felt between Didi Chuxing and Uber, and different mentalities fueled the passion each enterprise felt over establishing its own cultural precedent within China’s ridesharing industry.34 China’s business environment has similarly impacted the way ridesharing has been addressed within the nation. On a national level, regulations require that ridesharing firms hire local residents, and that both drivers and vehicles obtain specific certifications. Drivers must have a minimum of three years driving experience and no criminal record, and they must be licensed

by local taxi authorities. As compared to other nations, China is much more open to ridesharing, and it was the first country to nationally address the industry. This openness demonstrates both executive level support for domestic growth and a culturally progressive mindset. Governmental support of ridesharing was ultimately an important factor of Uber’s market entrance.35

Uber: Setting the World in Motion Founded by Travis Kalanick and Garrett Camp in 2009, Uber is now regarded as a ridesharing pioneer and global industry leader. Since Uber’s first San Francisco ride in 2010, Page 563the firm has prioritized development, and in just 10 years, Uber has become one of the world’s most valuable private startups. While valuations peaked at US$72 billion in 2017, many still regard Uber as a leader in the future of transportation, and many more believe that its aggressive demeanor will lead to both domestic and international success.36 Established as a taxi service, Uber now offers a multitiered platform of transportation and logistic solutions, including shipping, food delivery, electronic bikes, and limousines. This diversification has expanded Uber’s potential and has grown the company beyond ridesharing. Today, services like Uber Eats now make up 17 percent of total business.37 Furthermore, with a mission that reads, “To ignite opportunity by setting the world in motion,” Uber and its 2 million global drivers focus on bettering the future of transportation. In doing so, Uber has emphasized technology advancement and is currently investing in innovative travel solutions, ranging from autonomous vehicles to flying cars.38 In 2018 alone, ridesharing services in the U.S. generated US$15.6 billion, and revenues are anticipated to reach US$26.3 billion by 2023. Additionally, the U.S. currently has 50 million registered ridesharing users, and 11 million new riders are estimated to emerge within the next five years.39 For Uber, the bulk of its business remains domestic, and while premiums are generally higher in the U.S., market growth is more promising internationally. For instance, a major consideration of international ridesharing growth is vehicles per capita. The United States has one of the highest vehicle per capita rates, and 88 percent of U.S. citizens own a car, compared to about 10 percent globally.40 This disparity in transportation accessibility has caused many American ridesharing firms to expand into foreign nations, such as China, where the market potential is larger. Higher demand for ridesharing internationally has led to expedited foreign growth, and by 2025, the global ridesharing industry will be 10 times larger than that of the U.S.41 Uber has focused on international expansion since its inception. In December of 2011, a little more than a year after the firm’s first San Francisco ride, Uber expanded into Paris. Within the next two years, the firm grew its operations across 6 continents. Today, Uber is active in over 600 cities in 70 unique countries (see Figure 2). Nevertheless, almost a third of these locations are within North America, and Uber’s largest presence remains domestic.42 As a result, most of the firm’s income is generated within the U.S., and despite a growing international focus, over 57 percent of Uber’s revenues will come from North America by 2022.43

Figure 2 Uber’s Operations Around the Globe Source: Bhuiyan, Johana, and Rani Molla. “Didi is Chasing Uber Around the World.” Vox, August 10, 2017. https://www.vox.com/2017/8/10/16114736/didi-china-ride-hail-compares-uber-globally. Foreign competition and international backlash have inhibited Uber’s success, and while the firm is becoming globally known, many foreign developments have been ineffective. Uber’s expansion techniques have typically involved offering deep discounts while leveraging the prestige associated with its brand.44 Uber rarely makes local adjustments, and the firm has often been criticized for not adapting to the cultural, economic, and political environments of an area it expands into. As a result, many have questioned the speed of Uber’s expansion and condemn the company for not taking the time to properly adapt to the nuances of the locations it enters. Uber’s expansive setbacks can be linked to its “think local to expand global” attitude and many believe that the largest inhibitor to Uber’s success has been its inability to adapt.45 Many have also questioned the legal and societal aspects of Uber’s services, and fierce lobbying, especially by taxi unions, has disrupted international expansion. Opposition has led to violent protests and state-wide bans in places like Hungary, Italy, and France. In Morocco, Uber drivers have claimed that disputes with taxi servicers have resulted in physical harm, threats, and unlawful detainment. As attacks become more common, many passengers question the safety of the service.46 Growing opposition and overly eager expansion plans have damaged Uber’s financial position, and costly battles within less open-minded countries have slowed revenue growth. While self-reported financial statements show that revenues reached US$11.3 billion in 2018, many speculators are concerned with the firm’s slowing growth. Furthermore, after deducting expenses, Uber showed a net loss of US$1.8 billion in 2018. This loss can be mainly attributed to unsuccessful international expansions, brand damage control, and regulatory lawsuits.47 Along

with revenue concerns, Uber has also been plagued by leadership scandals. Travis Kalanick, co-founder and CEO of Uber, was known to support a workplace culture that tolerated both discrimination and sexual harassment. Kalanick was forced to step down after the firm’s five largest investors threatened to pull their funding.48 Traditionally, Uber’s overall leadership has placed a high focus on growth, resulting in a hostile company culture, which one former employee described as “Hobbesian.” Growth has always undermined employee well-being, and “workers were often pitted against one another while a blind eye was turned to infractions from top performers.” Corrupt leadership and a toxic work environment have resulted in multiple lawsuits, new management, and faulty expansive efforts.49

Uber’s Milestones

2009

•Travis Kalanick and Garrett Camp launch UberCab. •UberCab is rebranded as Uber.

2010

•Travis Kalanick replaces Ryan Graces as CEO. •The Uber app launches on iPhone and Android. •Uber performs its first ever ride, taking a single passenger across San Francisco. •Domestic expansion begins and services are offered in cities such as New York and Chicago.

2011

•First international launch in Paris, France. •First round of funding results in over US$11 million of investments. •Expands into France. •Ridesharing becomes primary focus through the launching of UberX.

2012

•Competitor Lyft is founded. •Expands into Australia, Canada, and the United Kingdom. •Begins looking for opportunities in Asia, taking off in Taipei, Taiwan. •Targets Central and South American through Mexico City expansion.

2013

•Establishes a global mindset by launching in Johannesburg, South Africa. •USA Today names Uber Tech Company of the year. •Expands into India, Mexico, Germany, South Africa, Taiwan, and the United Arab Emirates. •Enters China. •Chinese firm Baidu backs Uber with a US$600 million investment. •UberRush launches as a courier service that uses bicycle messengers to deliver packages. •UberPool begins allowing travelers to share rides.

2014 •UberMilitary is founded to help returning veterans gain employment opportunities. •Enters its 100th City •Expands into Austria, Bahrain, Belgium, Brazil, Chile, Czech Republic, China, Columbia, Denmark, Egypt, Finland, Greece, Hong Kong, Hungary, Ireland, Israel, Italy, Japan, Lebanon, Netherlands, New Zealand, Nigeria, Norway, Panama,

Poland, Portugal, Qatar, Saudi Arabia, Spain, South Korea, Sweden, and Switzerland. •Didi Chuxing is founded through a merger between Kuaidi Dache and Didi Dache. •Didi and Lyft form a US$100 million partnership. •Ola, Grab, Didi, and Lyft announce the Joint Global Technology and Service Alliance to battle Uber. •UberCargo launches as a bulk shipping platform. •UberFresh is rebranded as UberEats, growing the firm’s position in food delivery services. •Specific locations begin accepting cash fees.

2015

•First autonomous robotics research facility opens. •First public acquisition occurs when Uber purchases map startup deCarta. •Domestic regulatory pressures grow after California’s Labor Commission classifies Uber drivers as employees. •Performs its one billionth ride. •Enters its 300th city. •Expands into Costa Rica, Croatia, Estonia, Ghana, Jordan, Kenya, Lithuania, Macao, Morocco, Peru, Romania, Slovakia, Sri Lanka, Turkey, and Uganda. •China becomes the first country to nationally deem ridesharing legal. •Didi Chuxing announces its acquisition of Uber China. •Scheduled ride services launch allowing passengers to book rides up to 30 days in advance. •Street mapping begins as a way to improve and maximize route logistics. •First self-driving vehicle pilot takes place.

2016 •Regulatory uncertainty rises in the U.S. forces Uber to leave cities like Austin, Texas. •Global regulatory disputes temporarily force Uber out of countries such as Italy, Israel, and the UK. •Performs its two billionth ride just six months after hitting one billion trips. •Enters its 500th city. •Expands into: Argentina, Bangladesh, Bolivia, Guatemala, Pakistan, Tanzania, Uganda, and Ukraine. •UberFreight launches, connecting trucking companies and drivers with shippers. •Passengers under 17 become eligible to use Uber. •Passengers are now able to tip drivers. •Launches Visa-sponsored Uber credit card. •Walmart announces home delivery through Uber partnership. •Partners with NASA to work on the development of flying vehicles.

2017 •Travis Kalanick is forced to resign as CEO amidst rumors of workplace discrimination and sexual misconduct. •Dara Khosrowshahi replaces Kalanick as CEO. •Alphabet files a lawsuit against Uber claiming theft of self-driving vehicle intellectual property.

2018 •Travis Kalanick is forced to resign as CEO amidst rumors of workplace discrimination and sexual misconduct. •Dara Khosrowshahi replaces Kalanick as CEO. •Alphabet files a lawsuit against Uber claiming theft of self-driving vehicle intellectual property.

A New Challenger in China Despite governmental uncertainty, cultural differences, and other variable entry barriers, Uber launched in China in February of 2014. Attracted by China’s ridesharing market potential, Uber hoped to capitalize on the nation’s transportation limitations and growing population. Furthermore, in order to overcome the legal ambiguity of ridesharing in China, Uber entered the nation through partnerships with multiple domestic vehicle leasing servicers and technology companies. The largest of these partners was Chinese tech giant Baidu, and Uber reworked its internal platform to run on Baidu Maps. This partnership was crucial to Uber’s entrance, as Uber typically relies on Google Maps to operate, which is banned in China.50 Prior to entrance, Uber was valued at US$17 billion, and this valuation more than doubled after a year of operating within China.51 Growing competition in the U.S. ridesharing industry, along with pressure by other transportation services, pushed Uber to look for opportunities outside of the U.S. Widespread unification of cab drivers led to country-wide lawsuits, collective lobbying efforts, and governmental complaints. Taxi unions fought to retain their dominance by emphasizing ridesharing’s safety concerns and lack of regulation. By 2015, ridesharing companies like Uber had managed to gain a substantial 29 percent market share, while car rental agencies and taxis held onto 36 percent and 35 percent shares, respectively.52 Uber viewed the lack of widespread Chinese competition as an additional reason to enter the market. Prior to entrance, the only major players within China were Kuaidi Dache and Didi Dache, which would soon merge to form Didi Chuxing. Furthermore, China’s large population and low vehicles rates meant that Didi and taxi servicers combined could still not meet the nation’s high transportation demand. As a result, taxi driver backlash and protests were not as concerning, and Uber anticipated that competitive battles over costumer acquisitions would be less fierce.53 The appeals of the Chinese market allowed Uber to quickly grow, and aggressive expansion techniques led to the rapid diffusion of Uber’s brand. By June of 2016, five of Uber’s ten largest cities by volume were in China. In less than two years, Uber had expanded into 60 of the nation’s most populous cities, and it had hoped to double its presence by 2017.54 Two years after expansion, Uber also announced that it possessed a modest 30 percent market share within China, and Uber’s American image had gradually gained familiarity throughout the nation. Chinese competencies had grown faster than those in North America, and ride volume in China quickly surpassed that of the U.S. However, costs had also grown much faster, and

quick growth resulted in unsustainable expenses and unexpectedly fierce competitive battles.55

Ridesharing Difficulties in a Foreign Landscape Despite early success, Uber quickly found itself amongst a tide of swelling threats. Governmental and societal backlash emerged as the ridesharing firm grew in popularity. In addition to growing city-wide mandates, the national government begun to discuss the possibility of enacting countrywide regulations shortly after Uber’s entrance. Mounting pressure to regulate and add safety standards threatened Uber’s position. Furthermore, since there was no formal ruling on the legality of ridesharing at the time of Uber’s entrance, many wrongly believed that the service was illegal. This lack of clarity resulted in general hesitation by both drivers and riders.56 In addition to legal and societal opposition, Uber also faced the realities of significant marketing expenses, driver incentives, and passenger discounts.57 Finding drivers within China had been much harder than in other international locations due to the nation’s many local and national vehicle restrictions, including the prohibition of immigrants and out of city workers from driving. To attract drivers, Uber was forced to pay pricey sign-on bonuses and increase the percentage of fares that drivers kept.58 At the time of Uber’s entrance, Didi had been using deep subsidies as a tactic to buy passenger loyalty, expand into new locations, and promote the general image of ridesharing, and Uber was forced to respond with even more aggressive price cuts. Increased rider incentives, such as promotional rides and sign up bonuses, meant that Uber was losing money on each ride it performed. Losses amounted to over US$1 billion in Uber’s first year of entrance.59 In order to support these losses, Uber and Didi both needed to attract funding and investments. Baidu had been financing Uber China since its inception, and aggressive investment lobby efforts by Didi resulted in funding from Chinese conglomerates such as Tencent and Alibaba. In 2016 alone, Didi accumulated US$7.3 billion in backing, with most of this funding coming from Apple, Alibaba, and China Life Insurance. Uber China responded with similar efforts that resulted in US$5 billion of investments from companies like Toyota and Tiger Global Management.60 Over time Uber’s tactics put pressure on Didi, and by 2016, Didi’s market share had shrunk from a near monopoly to 60 percent. Furthermore, in the wake of this competitive battle, smaller companies such as Yidao and Shenzhou begun to emerge, gradually taking their own cut out of China’s ridesharing market.61 As Uber gained experience in China, it [began] expanding into smaller and less wealthy tier 3 and 4 cities. The cost of maintenance and acquisition rose with these expansions as these locations had been isolated from Uber’s impact so far. Expansion and discounts were required to gain business, but this strategy hurt Uber by adding to its substantial annual loses. Using subsidies to prioritize growth led to unsustainable losses and unrealistic demand, and it allowed Didi to gain advantages over Uber.62

A Winning Battle: Didi’s Advantages over Uber Despite aggressive attempts by Uber to gain a long-lasting position within China, Didi had multiple advantages that allowed for its long-term sustainability. Didi could better weather the storm of rampant losses, and its domestic edge would prove to be too impactful for Uber to compete with.63 Didi Chuxing’s two years of prior experience within China proved to be one of the most impactful advantages for the firm.64 Didi had historical data on what services, attributes, and marketing strategies enticed Chinese customers best. While Uber did have more experience expanding into international locations, China was completely unlike any market it had ever entered. Didi’s first-to-market entrance countered Uber’s typical business model and left the firm in an unfamiliar position.65 Having a longer history within China also meant that Didi had a larger presence. While Uber had hoped to expand into its 100th Chinese location by 2017, Didi was already present in over 400 cities a year prior. Didi was active in nearly as many locations within China as Uber was globally.66 More importantly, by 2016 Didi was profitable in nearly half of its locations. At the same time, high subsidies and startup costs made Uber unprofitable in every Chinese city it entered.67 More cities meant more daily rides, and by the end of 2015, Didi was performing more than three times as many trips as Uber. Didi was also offering millions of more rides through private transportation services like taxis, buses, and limousines. These other transportation steams further diversified Didi’s capabilities, revenue, and image. Didi’s ranged competences allowed for greater volume, a more widespread presence, and added service offerings. This, in turn, translated into more experience, more employees, and more drivers early on.68 A Chinese focus also served as a distinct advantage for Didi. By 2016, Uber was active in over 50 unique countries, and each nation presented its own cultural aspects, societal issues, and regulatory hurdles. And as a result, Uber had to emerge itself in many different global landscapes. Losses, lawsuits, and protests experienced in countries thousands of miles away all impacted Uber China. Conversely, Didi was only active within China, and while Uber was concerned with international failures, Didi could direct all of its efforts at one nation.69 Being a Chinese-based firm presented Didi with more tangible benefits as well.70 Didi had the support of China’s Investment Corporation, which is particularly important for success within China as the government will often sway lawsuits and promote legal regulations that benefit the firms it backs. As a result, CNBC described Uber’s lack of consideration of Chinese particularities as its greatest weakness, and one analyst noted that, “You can’t win, within China. When you have great technology and a great business model, but don’t understand some of those local business premises, West Coast aggressiveness will only get you so far.”71

With funding that outweighed Uber’s by as much as US$2.3 billion, Didi’s investments were directed at stimulating Chinese growth, and Didi was better positioned to provide deeper subsidies and discounts. Uber’s investments, however, were often globally scattered, thus spreading the company thin.72 Didi also formed partnerships with multiple global ridesharing firms such as Lyft, Ola, and Grab. Didi even strategically invested US$100 million into Lyft in order to indirectly attack Uber’s domestic operations and distract the firm from its Chinese battle. Similar investments went to Ola in India and Grab in Singapore.73 Another significant tech investment for Didi came from Apple in 2016, totaling US$1 billion. While Uber’s investments prioritized discounts, Didi’s funding was directed at improving user experience and other long-term projects.74 Expanded product offerings like city-wide bike sharing, different car rental classes, carpooling options, and busing lines revitalized the firm. Didi’s progressive minded leadership constantly looked for ways to improve, while Uber’s leadership only sought out ways to win. This carefully organized mentality meant larger growth and a longer life for Didi, and Uber’s plan to use its size and experience to bully its way into China was fruitless.75

Presenting an Acquisition Proposal After two years of consecutive US$1 billion losses within China, Uber admitted defeat. Kalanick had noted that, “China is only possible with profitability,” and he hoped that an alliance would give Uber the profitability needed to succeed.76 While Didi was better positioned to survive the price war, cooperation with Uber was becoming increasingly necessary for long-term sustainability.77 Growing pressure by investors to cut mounting losses within China finally forced Uber to begin negotiations with Didi in May of 2016. While dialogue was slow at first, Didi quickly prioritized forming an alliance after a rumor emerged that Lyft had begun working with Page 567Qatalyst Partners LP, a boutique investment bank known for helping tech companies merge. Fearing a potential Lyft-Uber merger, Didi sped up negotiations, and on August 1, 2016, Didi and Uber came to an agreement.78 Prior to the agreement Didi had 42 million users while Uber China had 10 million. An alliance between the two created an unbreakable ridesharing powerhouse within China.79 In return for the acquisition of Uber’s Chinese operations, Uber gained a 17.7 percent stake in Didi. Additionally, Uber’s investors were given a 2.3 percent stake, taking the combined position up to 20 percent. The deal made Uber the largest stakeholder in Didi, and with Uber China being valued at US$8 billion, Didi’s total value skyrocketed to US$36 billion (see Figure 3).80

Figure 3 Valuation History: Uber vs Didi Sources: “Battle of the Decacorns: Uber vs. Didi Chuxing’s Valuations over Time.” CB Insights, August 5, 2016. https://www.cbinsights.com/research/uber-vs-didi-chuxing-valuation-history; “China’s Ride-Hailing App Didi Gets $500 Million Funding from the Parent of Booking.com.” Reuters, July 17, 2018. https://www.cnbc.com/2018/07/17/chinas-ride-hailing-app-didi-gets-500-million-funding-from-the-paren.html; “How Uber Could Justify a $120 Billion Valuation.” Forbes, December 3, 2018. https://www.forbes.com/sites/greatspeculations/2018/12/03/how-uber-could-justify-a-120-billion-valuation/#6c2a57e97f9b. In addition to being given a dominant position in China’s largest ridesharing firm, Uber China also retained its brand. While Didi did maintain control of Uber China, Uber would remain within the nation under an independent image. Uber’s app could still be used in China, and the firm could move forward with its vision of becoming a globally renowned company despite the fact that its Chinese operations were now under Didi’s jurisdiction. The agreement also required Didi to invest US$1 billion into Uber’s global locations. Although Uber had received significantly greater funding in the past, this contribution would be the largest individual investment Didi had ever made. Additionally, Kalanick would gain a position on Didi’s board of directors while Wei was granted a spot on Uber’s board.81 Didi’s acquisition of Uber China altered the ridesharing landscape for consumers. While consumers had typically been the ones to experience the benefits of decreased rates and deep subsidies, the acquisition of Uber China would ultimately mean the undoing of these incentives. By 2017, nationwide ridesharing prices had increased. For instance, Beijing, Shanghai, and Shenzhen saw 12.4 percent, 17.7 percent, and 22.5 percent increases in fare prices, respectively. Rising prices allowed Didi to implement a new long-run focus on customer

experience, which would ultimately benefit consumers through enhanced technology, services, and offerings.82 While consumers would experience long-run benefits, Didi and Uber both saw more immediate gains. Uber was able to shift its focus away from a losing battle and redirect its energy towards areas of already established success. At the same time, any success by Didi would result in greater returns on investment for Uber. A growing global presence has been connected to Uber’s durability, and a newly secured position in China would promote Uber’s long-run position. With the hopes of going public soon, Uber had realized that losses in China blemished its financial statements. By eliminating the threat of concentrated losses, Uber was able to dramatically enhance its financial position and make itself more presentable to investors. As a result, Uber received a win in a battle that it would have otherwise lost.83 Most importantly, this acquisition allowed Didi to realign its position with its original goals and values. While Didi had remained focus on advancement even in the midst of its competitive battle, a price war had nonetheless distracted the firm from its original intentions. The Wall Street Journal noted that the elimination of this competitive threat, “freed up substantial resources for bold initiatives focused on the future of cities: from self-driving technology to food and logistics.”84 While each party benefited substantially, this acquisition did bring about concerns. The monopolistic power that Didi had acquired through this merger was immediately subjected to antitrust concerns. Large market dominance and substantial funding meant that no newly emerged competitor would be able to reasonably compete with Didi, and China’s antitrust regulators quickly found fault with this monopolistic authority. By the end of 2016, China’s Ministry of Commerce had announced that it would investigate Didi’s position.85

A New Global Leader The success Didi experienced within China secured the firm’s position as a global ridesharing leader, and future initiatives will only further strengthen the firm’s image.86 Didi’s profound knowledge of city congestion and its development strategies, which have proven successful, are expected to be leveraged in the next phase of growth. China is the only nation with over 100 cities that have a population of at least 1 million, and Didi’s familiarity with transportation logistics in such a dense area will ensure success in other populous markets.87 With over 550 million users and 31 million drivers, Didi has learned how to successfully handle volume, and as the firm expands, it should be able to easily control any costs associated with increasing its size.88 The growing appeal of international expansion can also be linked to the growing threat of competition within China. While the superiority of Didi’s operations have historically led to a near dominance within this market, new rivals continuously emerge in attempts to weaken Didi’s authority. For instance, Alibaba-owned mapping firm, AutoNavi, has recently challenged Didi with its own ride hailing service. This young ridesharing firm has leveraged its strong

backing from Alibaba and has begun implementing its own City Brain platform, which takes advantage of its proprietary transportation data to improve ride logistics.89 Didi is facing growing competition in all aspects of its business. For instance, Meituan Dianping has recently overtaken Didi’s title of world’s largest food delivery servicer by withdrawing from ridesharing to solely focus on delivery. Niche competitors are taking on specialized challenges and are finding creative ways to attack specific aspects of Didi’s service lines. Furthermore, new competitors have mainly been domestic, and these firms have deep local knowledge and stronger cultural appeal, something which Uber never challenged Didi with. While these young firms may not possess the same size and authority as Uber, local synergistic advantages put them in an ideal position to challenge Didi.90 Didi currently manages three distinct research and development centers in which it funnels investments into vehicle logistics. While Didi’s engineers and data scientists have made significant strides in hardware improvements, most of the firm’s research involves software advancement and data collection. Self-driving vehicles and electric cars have been given a long-term focus, and current ventures in data manipulation have allowed Didi to grow its present position. Investments have allowed Didi to capture realtime data, which it then uses to maximize travel routes and ride times. Today, the firm’s research mostly involves smart learning, and practices such as artificial intelligence, computer vision, and natural language processing all aim at bettering the user experience in anticipation of new competitive battles.91 Dominance within China, a history of growth, and a strong technological position will fuel Didi’s next wave of expansion. Partnerships appear to be only one aspect of Didi’s global endeavors, and the firm aims to enter foreign markets under its own brand. While Didi has emphasized growth, unlike Uber, it has been much less aggressive with expansion. Strategic investments and partnerships contrast significantly from Uber’s strategy of entering independently and using price cuts to knock down local competitors. While Uber has seen success in this strategy, it has seen just as much failure. As Didi moves forward, it believes that its cautiousness will allow it to avoid Uber’s mistakes, and one Didi spokesperson noted that, “Didi is pursuing a flexible approach to international expansion rather than a one-size-fits-all strategy.” While Uber has aimed for entrance speed, Didi realizes that a flexible long-term strategy will avoid conflicts and generate defendable growth, something which Uber lacks in many of its markets.92

Reigniting a War As Didi advances towards global ridesharing dominance, it finds itself once again running into conflicts with Uber. Unlike in China, however, Didi has now become the aggressor.93 With a new focus on international expansion, Didi has targeted Mexico as its first independent location outside of China. However, opposition follows expansion, and this time around, Uber is the local monopolistic leader. With an estimated 87 percent market share, Mexico is one of Uber’s most profitable and protected global locations. Like Didi’s position in China, Uber dominates within Mexico, and there are no clear local competitors for Didi to partner with even

if it wanted to. Mexico is also the fourth largest market for Uber in terms of users, and only the U.S., Brazil, and India rival the nation’s volume. While Didi has been attacking Uber’s dominance within its other principal markets, all of Didi’s past oppositions have been through partnerships. Since its 2013 entrance, Uber has invested over US$500 million into Mexico, and stronger blockades have been recently built in anticipation of Didi’s arrival.94 Didi has hit the ground running as it enters Mexico, and dynamic tactics have quickly allowed the firm to gain a strong reputation within the nation. For instance, Didi has been aggressively poaching top employees from Uber’s Mexican management team in order to gain insider information on Uber’s tactics and strategies. Didi employees have Page 569also been registering as Uber drivers and passengers and are riding incognito within Uber vehicles in order to gain insight into Uber’s operations. Speaking with Uber’s users and employees has given Didi firsthand accounts of the flaws and strengths of Uber’s services, and Didi plans on tailoring its products around Uber’s flaws. With this information, Didi has announced a wider array of services, and the firm hopes to expand into popular Mexican transportation alternatives such as bikes, scooters, and motorcycles, all of which Uber has yet to offer.95 Didi has also used driver feedback to alter fee collection processes, and the firm announced that it would not be accepting cash payments within Mexico. Didi hopes that electronic payments will help the firm attract drivers, especially considering that thieves have recently begun targeting Ubers for the surplus cash they tend to have on hand during rides. Subsequently, Didi believes that its heavy investments in data collection and ridesharing technology will ensure quicker, more superior services. Didi has been highly methodical as it enters Mexico, which varies greatly from the “expand now, plan later” strategy that Uber used in China. As a result of careful planning, Didi has already begun to successfully rival Uber’s position.96 Despite well-thought out tactics and past successes against Uber, a difficult situation lies ahead for Didi. Rivaling Uber in Mexico is fundamentally different than anything Didi has ever attempted. Mexico is Didi’s first effort at building an operation without any partnerships, and Didi will have no local authority to guide it through this competitive battle. One analyst noted that, “It is fundamentally different when you’re jumping across an ocean,” and Didi’s lack of experience with local regulatory and cultural complexities may impede the firm. It is already clear that the firm has much to learn about western lifestyle. For instance, while recruiting Uber employees, Didi reportedly hosted interviews during the week of Christmas, a time where most of Mexico is on vacation. Didi thus far has had difficulty altering its image, and this difficulty is only exacerbated by the fact that Latin American consumers tend to prefer U.S. brands over Chinese ones. As a result, Chinese companies have historically struggled in Latin America. Furthermore, rather than competing on price, Didi hopes that improving services, safety, and speed will attract customers, yet the Mexican market already appears to be highly price dependent. To be successful within Mexico, Didi will have to completely alter its image and step away from its heritage; however, this may prove to be difficult for the firm, especially considering the success that its culture has brought it during past fights against Uber.97

Uber is prepared to do whatever it takes to retain its dominance. Whether it be increasing spending on marketing and customer acquisition or investing more heavily in service offerings and technology, Uber is equipped for the long run. While Didi does have significant bankroll, the firm may still have difficulty overcoming the complexities of market expansion. With positions flipped, foreigner Didi will now have to fight against the advantages that allowed it to succeed in China. While Didi believes that an established position in China will allow it to overcome any struggles that international expansion may present, Didi’s efforts may nonetheless end up paralleling those of Uber. As the two firms prepare for the next battle, the only certainty is the clash—yet the experiences that Didi and Uber have learned from China may guide them in what is to come. Questions for Review 1.What was so appealing about the Chinese ridesharing landscape? Specifically, why did Uber want to enter China? 2.What are some potential threats that American firms face when conducting business within China? In your opinion, do you think these concerns discredit entrance? 3.What advantages did Didi have to help it win its competitive battle with Uber? 4.What were some of the benefits Didi and Uber China received by merging? Can you think of any potential detriments? 5.Compare and contrast Uber and Didi’s expansion tactics. Going forward, do you think Uber should reevaluate this strategy? Provide justification for both sides of the argument. 6.Do you believe Didi or Uber has a more stable financial outlook? Why? Exercise After working for Uber Mexico for nearly five years, you and a few other members of Uber Mexico’s senior management team have been recruited by Didi Chuxing’s Global Expansion group. Attracted by Didi’s cultural environment and a higher salary, you decide to leave Uber. Didi is eager to gain insight into Uber’s cultural environment, and as your first assignment, you have been tasked with assessing and analyzing your previous employer. Specifically, you have been asked to carefully consider and evaluate Uber’s leadership team and the company culture that they foster. What has Uber’s management team been doing well, and what weaknesses can Didi capitalize on in order to make its own company more appealing? Finally, given your experience with Uber’s Mexican operations, your new employer also asks you to evaluate the cultural landscape and business environment of Mexico. In relation to Uber, what has the company done right in Mexico, what should Didi attempt to replicate, and what mistakes can Didi avoid? How can Didi’s leadership adjust its offerings to be more culturally relevant?

This case was prepared by Matthew Sepe of Villanova University under the supervision of Professor Jonathan Doh as the basis for class discussion. ENDNOTES 1.“Didi Completes 7.43b Rides in 2017,” China Daily, September 1, 2018, http://www.chinadaily.com.cn/a/201801/09/WS5a541c98a31008cf16da5e76.html. 2.Shlomo Freund, “A Short History of Uber in China: Was It a Failure,” Forbes, August 15, 2016, https://www.forbes.com/sites/shlomofreund/2016/08/15/a-short-history-of-uber-in-china-was-it-a-failure. 3.Leslie Hook, “Uber’s Battle for China,” Financial Times, June 2016, https://ig.ft.com/sites/uber-in-china. 4.Jon Russell and Ingrid Lunden, “Confirmed: Didi Buys Uber China in a Bid for Profit, Will Keep Uber Brand,” TechCrunch, 2016, https://techcrunch.com/2016/08/01/Didi-Chuxing-confirms-it-is-buying-Ubers-business-in-china. 5.“Didi Completes 7.43b Rides in 2017.” 6.Laura Wood, “Chinese Ride Sharing Market 2017-2018 & 2025,” Cision, June 6, 2018, https://www.prnewswire.com/news-releases/chinese-ride-sharing-market-2017-2018–2025-major-players-are-didi-dida-aa-pinche-laihui-and-tiantian-300661068.html. 7.Sherisse Pham, “China’s $30 Billion Ride-Hailing Market Could Double by 2020,” CNN Business, May 15, 2018, https://money.cnn.com/2018/05/15/technology/china-ride-hailing-market/index.html. 8.“Reducing Traffic Congestion and Emission in Chinese Cities,” World Bank, November 16, 2018, https://www.worldbank.org/en/news/feature/2018/11/16/reducing-traffic-congestion-and-emission-in-chinese-cities. 9.Natascha Kuter, “China Acts to Combat Pollution and Traffic Chaos,” DW News, February 26, 2013, https://www.dw.com/en/china-acts-to-combat-pollution-and-traffic-chaos/a-16629782. 10.Raymond Tsang, Pierre-Henri Boutot, and Dorothy Cai, “China’s Mobility Industry Picks Up Speed,” Bain, 2018, http://www.bain.cn/pdfs/201805140617002187.pdf. 11.Peal Chen, “Beijing’s Car Plate Policies,” Global Times, April 17, 2018, http://www.globaltimes.cn/content/1098345.shtml.

12.Emma Hinchliffe, “Uber Is Now Legal in China, but Drivers Have to Play by a New Set of Rules,” Mashable, July 28, 2016, https://mashable.com/2016/07/28/uber-legal-china/#sSxO2wEMSiqB. 13.Chris Ciaccia, “Didi Chuxing—the Chinese Ride-Sharing Giant,” Investopedia, October 5, 2018, https://www.investopedia.com/articles/small-business/012517/didi-chuxing.asp. 14.John Russell, “China’s Top Two Taxi-Hailing Services Confirm That They Will Merge,” TechCrunch, 2015, https://techcrunch.com/2015/02/13/kuaidi-dache-didi-dache-merge. 15.Ibid. 16.Catherine Shu, “China’s Two Biggest Taxi Apps Reportedly Considering a Merger,” TechCrunch, 2015, https://techcrunch.com/2015/02/13/kuaidi-didi-dache. 17.Charles Custer, “Didi Kuaidi Partners with Lyft and Invests $100M to Take on Uber,” Tech in Asia, September 16, 2015, https://www.techinasia.com/didi-kuaidi-partners-lyft-uber. 18.“Didi Chuxing Invests in Brazil Rival 99,” CNBC, January 4, 2017, https://www.cnbc.com/2017/01/04/didi-chuxing-invests-in-brazil-rival-99.html. 19.Bernard Marr, “AI in China: How Uber Rival Didi Chuxing Uses Machine Learning to Revolutionize Transportation,” Forbes, November 26, 2018, https://www.forbes.com/sites/bernardmarr/2018/11/26/ai-in-china-how-uber-rival-didi-chuxing-uses-machine-learning-to-revolutionize-transportation/#732f0f1. 20.Kirsten Korosec, “Uber Rival Didi Chuxing Sets Up Shop in Silicon Valley,” Fortune, March 8, 2017, http://fortune.com/2017/03/08/didi-chuxing-silicon-valley. 21.Masha Borak, “Didi Is Using Its New AI Brain to Crack the Toughest Puzzle, Our Cities,” Technode, January 26, 2018, https://technode.com/2018/01/26/didi-ai-brain. 22.“Didi Chuxing Loses Rmb4bn in First Half of Year,” Financial Times, September 10, 2018, https://www.ft.com/content/7f6c55dc-b4c5-11e8-bbc3-ccd7de085ffe. 23.Rita Liao, “China’s Didi Reportedly Lost a Staggering $1.6 Billion in 2018,” TechCrunch, February, 2018, https://techcrunch.com/2019/02/14/didi-reported-1-6-billion-loss. 24.“Didi Chuxing Loses Rmb4bn in First Half of Year.” 25.Jon Russell, “China’s Didi Chuxing Adds More Safety Features Following Passenger Murder,” TechCrunch, October 2018, https://techcrunch.com/2018/09/26/chinas-didi-chuxing-adds-more-safety-features-following-passenger-murder.

26.“Is $80 Billion Valuation Achievable for Didi Chuxing’s IPO,” Forbes, December 24, 2018, https://www.forbes.com/sites/greatspeculations/2018/12/24/is-80-billion-valuation-achievable-for-didi-chuxings-ipo/#12fd7ae56211. 27.“Changing the World,” Fortune, 2018, http://fortune.com/change-the-world/didi-chuxing. 28.“How Do Uou Say “Uber” in Mandarin,” CNBC, May 22, 2018, https://www.cnbc.com/2018/05/22/didi-chuxing-2018-disruptor-50.html. 29.“China’s Resident Disposable Income Rises 6.5% in 2018,” China Daily, January 21, 2019, http://www.chinadaily.com.cn/a/201901/21/WS5c4569f1a3106c65c34e5a1f.html. 30.“Meet the Chinese Consumer of 2020,” McKinsey, March 2012, https://www.mckinsey.com/featured-insights/asia-pacific/meet-the-chinese-consumer-of-2020. 31.“China GDP Current US$,” World Bank, 2018, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2017&locations=CN&start=1960&view=chart. 32.Jeff Spross, “What It’s like to Do Business in China,” The Week, August 6, 2018, https://theweek.com/articles/788219/what-like-business-china. 33.Thomas Lee, “Why China Protects Its Homegrown Tech Companies,” San Francisco Chronicle, October 23, 2015, https://www.sfchronicle.com/business/article/Why-China-protects-its-homegrown-tech-companies-6587101.php. 34.“Chinese Business Management Style,” World Business Culture, March 23, 2017, https://www.worldbusinessculture.com/country-profiles/china/culture/business-management-style. 35.Tekendra Parmar, “New Regulations May Hurt China’s Ride-Hailing Business Didi,” Fortune, November 15, 2016, http://fortune.com/2016/11/14/didi-chuxing-regulations-china-uber-ride-hailing. 36.Shlomo Freund, “A Short History of Uber in China: Was It a Failure,” Forbes, August 15, 2016, https://www.forbes.com/sites/shlomofreund/2016/08/15/a-short-history-of-uber-in-china-was-it-a-failure/#516b27d73386. 37.Dan Blystone, “The Story of Uber,” Investopedia, March 31, 2019, https://www.investopedia.com/articles/personal-finance/111015/story-uber.asp. 38.“About Us,” Uber, https://www.uber.com/us/en/about.

39.“Ride Hailing,” Statista, 2019, https://www.statista.com/outlook/368/ride-hailing#market-globalRevenue. 40.Tanvi Misra, “Global Car, Motorcycle, and Bike Ownership, in 1 Infographic,” City Lab, April 17, 2015, https://www.citylab.com/transportation/2015/04/global-car-motorcycle-and-bike-ownership-in-1-infographic/390777. 41.“Ride Sharing Market by Type,” Markets and Markets, 2018, https://www.marketsandmarkets.com/new-reports.html. 42.Harry Wyatt, “Uber Cities,” Uber Estimator, 2019, https://uberestimator.com/cities. 43.“Uber Technologies: Statistics and Facts,” Statista, May 2018, https://www.statista.com/topics/4826/uber-technologies. 44.John Colley, “How Uber Crashed in China,” Smart Company, August 3, 2016, https://www.smartcompany.com.au/startupsmart/advice/business-planning/how-uber-crashed-in-china. 45.Suhas Manangi, “Uber’s Global Expansion Strategy: Think Local to Expand Global,” LinkedIn, July 31, 2017, https://www.linkedin.com/pulse/ubers-global-expansion-strategy-think-local-expand-work-manangi. 46.Biz Carson, “Where Uber Is Winning the World and Where It Has Lost,” Forbes, September 19, 2018, https://www.forbes.com/sites/bizcarson/2018/09/19/where-uber-is-winning-the-world-and-where-it-has-lost/#f6a16714d6ed. 47.Paayal Zaveri and Deirdre Bosa, “Uber’s Growth Slowed Dramatically in 2018,” CNBC, February 15, 2019, https://www.cnbc.com/2019/02/15/uber-2018-financial-results.html. 48.Mike Isaac, “Uber Founder Travis Kalanick Resigns as CEO,” New York Times, June 21, 2017, https://www.nytimes.com/2017/06/21/technology/uber-ceo-travis-kalanick.html. 49.Mike Isaac, “Inside Uber’s Aggressive Unrestrained Workplace Culture,” New York Times, February 22, 2017, https://www.nytimes.com/2017/02/22/technology/uber-workplace-culture.html?module=inline. 50.Yibo Dai, “Why Uber Survives and Thrives in China,” The Medium, January 19, 2016, https://medium.com/yibo-look-into-china/why-uber-survives-and-thrives-in-china-part-1-9b78bc085e5c. 51.Carlos Barria, “Here’s How Uber Can Win in the Stiffly Competitive Chinese Car Service Market,” Business Insider, August 25, 2014, https://www.businessinsider.com/uber-china-2014-8.

52.Luz Lazo, “Cab Companies Unite against Uber and Other Ride Share Services,” Washington Post, August 10, 2014, https://www.washingtonpost.com/local/trafficandcommuting/cab-companies-unite-against-uber-and-other-ride-share-services. 53.Dai, “Why Uber Survives and Thrives in China.” 54.Davey Alba, “Uber Hits 2 Billion Rides as Growth in China Soars,” Wired, July 18, 2016, https://www.wired.com/2016/07/uber-hits-2-billion-rides-growth-china-soars-now. 55.Hook, “Uber’s Battle for China.” 56.Ibid. 57.Deborah Findlings, “What Stands between Uber and Success in China,” CNBC, September 15, 2015, https://www.cnbc.com/2015/09/15/what-stands-between-uber-and-success-in-china.html. 58.Colley, “How Uber Crashed in China.” Page 572 59.“Uber Losing 1 Billion a Year to Compete in China,” Reuters, February 18, 2016, https://www.reuters.com/article/uber-china-idUSKCN0VR1M9. 60.Rebecca Feng, “Uber China Hopes to Gain Market Share by Entering Travel Industry,” Forbes, June 22, 2016, https://www.forbes.com/sites/rebeccafeng/2016/06/22/uber-china-hopes-to-gain-market-share-by-entering-travel-industry/#15fefa8a357e. 61.Hook, “Uber’s Battle for China.” 62.Colley, “How Uber Crashed in China.” 63.Sophia Yan, “Uber Is Losing 1 Billion a Year in China,” CNN Business, February 19, 2016, https://money.cnn.com/2016/02/19/technology/uber-losing-1-billion-china/index.html. 64.Russell, “China’s Top Two Taxi-Hailing Services Confirm That They Will Merge.” 65.Hook, “Uber’s Battle for China.” 66.Charles Riley and Shen Lu, “Uber Is Planning a Huge Expansion in China,” CNN Business, September 8, 2015, https://money.cnn.com/2015/09/08/technology/uber-china/index.html.

67.Eva Dou, “Didi Says It Turns a Profit in More Than Half Its Cities,” Wall Street Journal, June 3, 2016, https://www.wsj.com/articles/didi-turns-a-profit-in-more-than-half-its-cities-executive-says-1464932408. 68.Erik Crouch, “China’s Ride Wars: Uber vs. Didi,” Tech in Asia, October 30, 2015, https://www.techinasia.com/infographic-didi-kuaidi-uber. 69.Deborah Findlings, “What Stands between Uber and Success in China,” CNBC, September 15, 2015, https://www.cnbc.com/2015/09/15/what-stands-between-uber-and-success-in-china.html. 70.Biz Carson, “9 Incredibly Popular Websites That Are Still Blocked in China,” Business Insider, July 23, 2015, https://www.businessinsider.com/websites-blocked-in-china-2015-7#facebook-4. 71.Deborah Findling, “What Stands between Uber and Success in China?” CNBC, September 15, 2015, https://www.cnbc.com/2015/09/15/what-stands-between-uber-and-success-in-china.html. 72.Rebecca Feng, “Uber China Hopes to Gain Market Share by Entering Travel Industry,” Forbes, June 22, 2016, https://www.forbes.com/sites/rebeccafeng/2016/06/22/uber-china-hopes-to-gain-market-share-by-entering-travel-industry/#15fefa8a357e. 73.Sarah Buhr, “China’s Didi Kuaidi Put 100M into Lyft, Inks Ridesharing Alliance to Rival Uber,” TechCrunch, 2015, https://techcrunch.com/2015/09/16/ubers-rivals-didi-kuadi-and-lyft-form-international-ridesharing-partnership. 74.Julia Love, “Apple Invests 1 Billion in Chinese Ride Hailing Service Didi Chuxing,” Reuters, May 12, 2016, https://www.reuters.com/article/us-apple-china/apple-invests-1-billion-in-chinese-ride-hailing-service-didi-chuxing-idUSKCN0Y404W. 75.James Crabtree, “Didi Chuxing Took on Uber and Won. Now It’s Taking On the World,” Wired, February 9, 2018, https://www.wired.co.uk/article/didi-chuxing-china-startups-uber. 76.Rick Carew, “The Road to the Uber Didi Deal,” Wall Street Journal, August 2, 2016, https://www.wsj.com/articles/the-road-to-the-uber-didi-deal-1470129702. 77.Avery Hartmans, “Here’s What Made Didi Finally Want to Merge with Uber in China,” Business Insider, August 2, 2016, https://www.businessinsider.com/why-didi-merged-with-uber. 78.Carew, “The Road to the Uber Didi Deal.”

79.“Didi Merger with Uber Grows Monthly Active User Base by 40% in China,” NewZoo, https://newzoo.com/insights/articles/didi-merger-with-uber-grows-monthly-active-user-base-by-40-in-china. 80.Carew, “The Road to the Uber Didi Deal.” 81.Alyssa Abkowitz, “Uber Sells China Operations to Didi Chuxing,” Wall Street Journal, August 1, 2016, https://www.wsj.com/articles/china-s-didi-chuxing-to-acquire-rival-uber-s-chinese-operations-1470024403. 82.Josh Horwitz, “One Year after the Uber Didi Merger, It’s Only Getting Harder to Hail a Ride in China,” Quartz, August 3, 2017, https://qz.com/1045268/one-year-after-the-uber-didi-merger-its-only-getting-harder-to-hail-a-ride-in-china. 83.Jon Russell, “Uber’s Deal with Didi Is a Win-Win for Everyone Except the Anti Uber Alliance,” TechCrunch, 2016, https://techcrunch.com/2016/08/01/ubers-deal-with-didi-is-a-win-win-for-everyone-except-the-anti-uber-alliance. 84.Alyssa Abkowitz and Rick Carew, “Uber Sells China Operations to Didi Chuxing,” Wall Street Journal, August 2016, https://www.wsj.com/articles/china-s-didi-chuxing-to-acquire-rival-uber-s-chinese-operations-1470024403. 85.“Didi Uber Merger under Antitrust Investigation,” Xinhua, November 11, 2016, http://www.xinhuanet.com/english/2018-11/16/c_137611764.htm. 86.Lucinda Shen, “After Soft Bank Investment, Uber Is No Longer World’s Most Valuable Unicorn,” Fortune, January 20, 2018, http://fortune.com/2018/01/19/uber-softbank-didi-worth-most-valuable-startup. 87.Company Info, Uber, https://www.uber.com/newsroom/company-info. 88.Jane Zhang, “Didi By the Numbers,” South China Morning Post, January 23, 2019, https://www.scmp.com/tech/start-ups/article/2181542/didi-numbers-ride-hailing-firm-covered-more-miles-2018-5-earth. 89.Masha Borak, “Alibaba’s AutoNavi Launches Ride Hailing Service in Bid to Become a Mobility Mega Platform,” Technode, July 11, 2018, https://technode.com/2018/07/11/alibaba-autonavi-amap-ride-hailing. 90.Yingzhi Yang, “Meituan Dianping to Halt Ride Hailing Expansion in China Amid Crisis at Industry Leader Didi,” South China Morning Post, September 6, 2018, https://www.scmp.com/tech/enterprises/article/2162926/meituan-dianping-halt-ride-hailing-expansion-china-amid-crisis.

91.Bernard Marr, “AI in China: How Uber Rival Didi Chuxing Uses Machine Learning to Revolutionize Transportation,” Forbes, November 26, 2018, https://www.forbes.com/sites/bernardmarr/2018/11/26/ai-in-china-how-uber-rival-didi-chuxing-uses-machine-learning-to-revolutionize-transportation/#78911ad06732. 92.Josh Horwitz, “This Ride Hailing Giant’s Global Expansion Playbook Is the Opposite of Uber’s,” Quartz, February 9, 2018, https://qz.com/1203151/didis-global-expansion-playbook-is-the-opposite-of-ubers. 93.Sara O’Brien, “Uber Says It Lost 1.8 Billion in 2018,” CNN Business, February 15, 2019, https://www.cnn.com/2019/02/15/tech/uber-2018-financial-report/index.html. 94.Julia Love, “Uber Says It Has Invested 500 Million in Mexico Since 2013,” Reuters, July 18, 2018, https://www.reuters.com/article/us-mexico-uber/uber-says-it-has-invested-500-million-in-mexico-since-2013-idUSKBN1K80AJ. 95.Julia Love and Heather Somerville, “How China’s Ride Hailing Giant Didi Plans to Challenge Uber in Mexico,” Reuters, March 19, 2018, https://www.reuters.com/article/us-uber-didi-mexico/how-chinas-ride-hailing-giant-didi-plans-to-challenge-uber-in-mexico-idUSKBN1GV0E0. 96.Ibid. 97.Ibid.