Kuaidi Girds For Global Battle As The Ride Sharing Wars Heat Up In China

Kuaidi Dache, the Chinese taxi hailing and ride-sharing service is going global even as competition heats up in its home market.

China’s congested streets, millions of willing users, arcane policies for buying and driving cars, all make it a perfect market for the taxi hailing and ride sharing apps that have become the darling of venture investors.

Earlier this year, the multi-billion dollar behemoth Uber outlined its plans for expansion into the Chinese market, a mere month after taxi hailing service Didi Dache pulled in $100 million for its taxi-hailing service from Tencent Holdings — China’s messaging and gaming leader. Meanwhile, the other leading Chinese player in the market, Kuaidi Dache, backed by Alibaba, was quietly making moves of its own.

The company raised $100 million from Alibaba Group, Matrix Partners China, and New Horizon Fund (a leading Chinese private equity investment firm).

Now the company is using that money to take its luxury limo service Kuadi ONE beyond the 32 cities in China it currently serves as it looks to enter the U.S. and European market. The company already handles 6 million hails for its taxi service in the 306 cities in which it operates.

Launched in July, Kuaidi ONE allows smartphone users to order luxury cars like BMWs and Audis for their trip, rather than the company’s basic taxi service. Since its launch the new service has brought in $1 million in revenue in roughly two months.

While Uber has taken off among foreigners and China’s upper class in cities like Beijing and Shanghai (on a recent trip to both cities every urban professional seemed to hail an Uber to get anywhere), Kuaidi and Didi Dache began with applications to make it easier for everyday taxi riders to hail cabs.

Competition for cabs on the streets of China’s urban centers is cutthroat, and hailing a cab on a rainy day is nearly impossible, especially given how comparatively cheap taxis are in China’s major cities. “A lot of people can afford a taxi,” says Kuaidi co-founder Joe Lee. “The constraint is supply. It’s a lot easier to get users to use our app because that’s our pain point.”

Unlike Uber, which relies on rental cars for its fleet, Kuaidi draws its services from the licensed taxi fleets in the cities in which it operates. The company launched a limo service akin to Uber X two months ago, and charges 15% of the fee or fares for that option, Lee says.

“At this point we don’t have any sort of competition here yet,” says Lee, “because our base is much bigger than [Uber]. In a city we have thousands of cars. Uber may have hundreds.”

Drivers on the Kuaidi service go through up to two months of training to familiarize themselves with the program and to ensure quality of the experience for people using the Kuaidi service, Lee says.

Photo via Flickr user Michael Davis-Burchat