Uber's Raising a Billion Dollars to Make China its Largest Global Market

By Maddie Stone on at

China’s gobbling Uber up. And it’s about to see a lot more of the black cab ride-hailing service, according to a letter leaked to The Financial Times last Thursday, in which Uber CEO Travis Kalanick revealed his intentions to raise over a billion dollars (£643,000) to expand UberChina.

Uber is still dwarfed in China by competitor Didi Kuaidi, but the company’s growth over the last year and a half has exceeded its wildest expectations. Only available in 11 Chinese cities to date, UberChina is now logging a million rides a day—roughly as many as the company was reportedly raking in across the entire world last December.

Trip volume in Chinese cities is also increasing way faster than Uber expected based on growth rates elsewhere: In the 4.3 million-strong city of Chengdu, Uber logged 479 times as many rides as New York did at the nine month mark, while early growth in Beijing has bested the Big Apple nearly thirty times over.

From Kalanick’s letter:

Our riders are completing almost 1 million trips per day and the business has doubled in the last month. Remarkably, we are only scratching the surface. Today we are live in 11 Chinese cities with an average population of 14 million. Yet there are 80+ cities with over 5 million people (as a reference, 5 million is roughly the size of Miami, one of the largest cities in the US). Over the next year we plan to launch in 50 of those Chinese cities.

This kind of growth is remarkable and unprecedented. To put it frankly, China represents one of the largest untapped opportunities for Uber, potentially larger than the US. Success in China, however, takes commitment over the long haul and a strong will, coupled with a unique understanding of the differences in China.

It hasn’t been all smooth sailing. On Friday, a confrontation in the Chinese city of Hangzhou between local taxi services and Uber prompted a swift and harsh response. Uber ordered its drivers not to participate in the protests, threatening to cancel their contracts if they do. It’s unclear whether this hardball strategy will work over the long term, but as the company plans to expand to over fifty cities, you can’t bet this won’t be the last we hear about it.

[Quartz | Wall Street Journal]