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Didi Kuaidi and Lyft Tie Up Their Apps as Didi Invests $100 Million in Lyft

Could Uber's competitors eventually merge?


A global alliance against Uber is forming.

Wednesday morning, China’s biggest ride-hailing service Didi Kuaidi announced its partnership with Uber’s American competitor Lyft during a New York press conference. Starting next year, Lyft users who go to China will be able to use Didi. Likewise, Didi users who come to the United States will be able to use Lyft.

The company didn’t give much more information on how this tie-up would work, but Lyft CEO John Zimmer suggested that the Didi option could appear as a tab in Lyft users’ apps, just like the carpooling product Lyft Line does.

Neither company would say whether they’d signed non-compete clauses in the future event that Didi decided to launch in a Lyft market or Lyft wants to head to China.

Didi also confirmed earlier reports of its investment in Lyft. With over $4 billion in funding raised, Didi was able to put $100 million into Lyft. This follows on the heels of Didi also backing Uber’s big competitor in Singapore, GrabTaxi.

Uber is trying to take over ride-hailing around the world. Because it has raised such a huge war chest of cash to do so, its fragmented competitors are realizing that, in order to battle Uber, they need to band together to share resources, product ideas and users. There have been reports of this alliance for months, but investors tell Re/code that the companies are now having serious conversations about what those partnerships could look like.

“The reality is these companies know each other fairly well and have developed a working relationship,” one Didi investor told Re/code. “There’s a lot of similarities in terms of the state of the market with consumers, regulatory issues, etc.”

Didi Kuaidi is Uber’s most formidable competitor in terms of funding raised, so it’s leading the charge in strengthening Uber’s rivals around the world.

When asked whether Didi could potentially merge with companies like Lyft and GrabTaxi down the line, the investor we spoke with said it wasn’t currently in the works, but he didn’t rule it out. “The possibility is always open. We share a lot of the common shareholders so it’s not unimaginable,” he said. “There has to be more conversation in terms of equity and I can’t speak to that now.”

During the press conference, Zimmer said that teaming up with Didi allowed Lyft to double down on the American market. “A focus of management, a focus of capital, a focus of product, it’s extremely helpful,” Zimmer said.

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