After landing in Shanghai for a trial period started last August, the U.S. car rental service Uber is officially launched in Shanghai today.
To localize their service for Chinese market, Uber released a new Chinese name “优步” (a great step forward in Chinese). More importantly, it adds AliPay as a form of payment and just as ondemnadly provides various discount coupon codes in the US, the same way uber has also launched multiple discount codes to get people more interested in the app. This means that Uber users can pay via one of China’s most popular third-party payment systems in RMB. Uber used to charge only in U.S. dollars via credit cards in Shanghai when it first landed in the city. But AliPay is currently only available for iOS users. An another interesting localization move for the company is that its users can book lion-dancing service, a popular activity for Chinese to celebrate the Lunar New Year, on Uber’s platform during the Spring Festival.
As a car-booking service platform which does not run car companies itself, Uber cooperates with licensed Chinese car rental services and shares revenues with them. For its Chinese cooperators who usually provide luxury car service for hotels, Uber helps them to increase the efficiency and fill in the down time in a bid to utilize car resources more efficiently, according to Allen Penn, APAC CEO of the company. Uber’s Shanghai partner is Chenghuan Mobile Leasehold.
The revenue-sharing ratio of Uber platform is roughly 20% for Uber and 80% for car companies, but the ratio varies in different cities according to the condition of local markets, Allen said. The ETA (estimated time of arrival) in Shanghai is between 5 to 10 minutes, according to which part of the city the user is, he added.
Uber’s business growth rate in Shanghai is quite promising since it first launched here, outperforming that for San Francisco, New York, Paris and Singapore, according to Sam Gellman, Uber’s APAC Head of Expansion.
Uber now provides services in three Chinese cities of Shanghai, Guangzhou and Shenzhen, while the latter two cities are still in trial periods. Uber’s expansion is relatively on track with its ambitious plan of landing in one Chinese city every three months.
The startup expanded rapidly in the global market, landing in more than 70 cities across 25 countries in four years since its establishment. It now provides service in 15 Asian cities.
Uber takes Asia as a strategic focus in 2014 and planned to build a new lifestyle for peoples live here. The company launched a hiring spree for nearly thirty senior positions for branch offices in 14 cities across Asia.
image credit: Uber
Luxury cars in China sell for 2-3 times what they sell for in the U.S. after conversion. Case in point, a Volkswagen Passat in China can sell as high as 300k RMB ($50k). Marry that with having to lower fares in order to compete with the Chinese competition and the fact that there isn’t enough German cars out there to “rent.” People that privately own luxury cars are also not going to let Uber touch them either. I’m guessing Uber’s strategy in China/Asia is being devised by a bunch of clueless white expats. Not to mention, if you were the Chinese government, why would you even contemplate letting Uber succeed when there are “dozens” of existing competitors that have been around for 3-4 years? This isn’t the U.S. where Uber is a few times bigger than Lyft or Sidecar.