The truce between Didi Chuxing and Uber China seemingly left the Chinese ride-hailing titan the sole dominator in China’s highly lucrative market. However, it has opened up new opportunities for other surviving local ride-hailing companies. It would seem that there’s no way for a single company to gobble up the entire Chinese market as a whole, even if it’s Didi.
UCAR, a prominent rival of Didi in China, announced this week that it raised RMB 4.6 billion in new funds from four investors including China’s interbank network, UnionPay. The company already boasts investment from high-profile players, including Warburg Pincus and Jack Ma.
Different from Didi that relies on private cars and crowd-sourced drivers, UCAR offers its services with an in-house fleet and licensed drivers. These drivers offer UCAR a way to potentially increase margins and avoid government questions about their legal status.
The firm currently operates four product lines: Car. Inc, their Hong Kong-listed car rental arm, Shenzhou Zhuanche, the chauffeured car service as well as an online car marketplace and a car loan service. Lu disclosed that the company is considering to explore new fields given all of its businesses are going to record profits this year, adding that car manufacturing is a possible option.
It’s worth nothing that the funding announced this time is only half the size of the firm’s RMB 10 billion private placement plan announced in last October.
However, board chairman Lu Zhengyao told local media (in Chinese) that more funding will follow and the total financing will be over RMB 7 billion RMB (around US$ 1.02 billion). He added that the funds will be used for marketing, recruitment, offline outlets, and fleet procurement.
Like many Chinese tech startups, UCAR is listed on the Chinese over-the-counter (OTC) market. It was the first of its kind when it was listed in in September last year and is now valued at RMB 40.93 billion. Didi is still preparing for its IPO and no specific timetable has been announced.
Despite the fierce competition and government constraints, local companies keep fighting their way into to China’s ride-hailing market. LeEco-backed Yidao is also targeting the gap that’s being left by Uber’s retreat.
In addition to the old players, new entrants continue to flock to the sector. China’s top O2O titan Meituan added a car-hailing function into its app to complement the existing services from food delivery to ticket booking. Chinese car manufacturer Geely has also expanded its ride-summoning services Caocao Zhuanche to more cities.
When Didi and Kuadi merged, and again when Didi merged with Uber, many predicted that the battle in Chinese ride-hailing industry was coming to an end. As things are now, the market is more mature, but the war may not be over.