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How Didi Kuaidi Plans to Destroy Uber in China

More products, more price points, more, more, more!

Didi Kuaidi

Didi Kuaidi, Uber’s biggest rival in China, harbors no ambitions for global domination. Instead, it is singularly focused on owning the home market and leaving Uber in the dust.

The current company was formed after China’s two biggest taxi-hailing apps merged this February. The incumbent’s strategy to fend off the foreign rival has appeared to pay off. Didi Kuaidi says it’s doing 3 million rides per day compared to Uber’s 1 million.

“We understand the Chinese market,” Tony Qiu, director of Didi’s strategy group, told Re/code. “We know every day where people are traveling from or to, so we try to aggregate those demands.”

What started out as apps to order up taxis has evolved into a ride-hailing service that spans products, consumer segments and price points. In summer 2014, both Didi Dache and Kuaidi Dache, then separate companies, moved into the peer-to-peer market like Uber and let people use their own cars to make money driving passengers around. Unlike Uber in China, Didi Kuaidi’s peer-to-peer service is actually legal, as it works with labor companies backed by the government and financial leasing companies to ensure drivers follow automotive regulations.

Winning the market has taken a portfolio of products, from carpooling services to its recent launch of buses, to hit every price point in the urban markets. It has a few more services in the works to meet other demands.

What’s clear to its operators is each product plays a role in the Didi Kuaidi ecosystem. The transit products complement one another by providing data on popular local routes and traffic patterns. For instance, executives said it will be able to operate its bus service more efficiently because data from its peer-to-peer and taxi products inform them of when and where the bus service would be in high demand.

Uber, on the other hand, has focused its energy on entering new markets.

Here are a few of Didi Kuaidi’s features and a peek at what’s coming next:

Hitch: Hitch is a feature that resembles a product from Sidecar — the smallest American ride-sharing company — called driver destinations. Casual drivers who want to recoup some gas money and toll fees on their morning commute can input their start and end points into the app. If there are passengers nearby heading in the same direction, they can share the ride. Uber has a similar product in China called People’s Uber.

This is different from the traditional P2P service because drivers have control over where the ride ends and they don’t make a profit off the service. Passengers pay a rate that’s 30-40 percent cheaper than taxis to help the driver with gas. For Didi Kuaidi, Hitch is like a gateway drug to tempt people to start driving for the for-profit P2P service. The company has advertisements in its app, so it benefits from having people open the app daily.

Buses: This is a feature that Didi Kuaidi just launched last week. Much like the American companies Leap Transit and Chariot, it is offering air-conditioned, Wi-Fi-equipped luxury buses on popular commuter routes as a premium alternative to the crowded public bus lines. Riders are guaranteed a seat and pay roughly four times the cost of public buses. Leap Transit and Chariot have struggled in San Francisco, but Didi Kuaidi hopes that the transit data it collects from its other services will help it design the most efficient routes and schedules to succeed where its American counterparts have failed. According to early local reports, they haven’t quite nailed that integration yet.

Coming soon:

Carpool: This is similar to the carpool version of the P2P service Uber offers, called UberPool. Didi Kuaidi passengers can order a P2P car or a taxi and share it with other people in the same area going the same direction.

Chauffeurs: Didi Kuaidi is working on a product where people can drive your car home for you — with you inside — after you’ve been drinking or when you are too tired, or otherwise impaired to drive. The drivers get around on scooters.

On-demand valet: Although Didi Kuaidi isn’t working on a valet product, a source tells Re/code it might in the future. With on-demand valet companies like San Francisco’s Luxe or Zirx Valet, drivers meet you wherever you drop a pin in the map. They take your car and park it for the day, and return it to you wherever you request in the city.

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