If you’re from the U.S., you know Lyft. If you’re Chinese, Didi; Indian, Ola; southeast Asian, GrabTaxi. Now those four companies are putting pedal to the meddle on an international alliance announced last year. Its purpose? To defeat Uber.
After a year of informality and talk, Lyft and Didi debuted the first ‘code exchange’ between rideshare giants. This will give tourists in either the U.S. or China an automatic option via their home app when they travel, instead of having to download a new app and set up a new account, give up valuable credit card information for a second time, or have to rely on Uber. Customers of one service will not have to download a second app for a short visit, nor upload credit card information to a brand they don’t recognize. The alliance is managing the transactions for them, currency exchange and all. Without any mention of special offerings or deals for travelers, the possibility obviously exists for international promotions.
By the numbers, that puts the service in over 700 cities across India, China, the U.S. and in Southeast Asia. Didi was just valued at $25 billion and raised an additional $1.5 billion. Lyft scored $1 billion in January in a round led by a $500 million infusion from General Motors aimed at autonomous car development. Ola raised $500 million in Series F in November, including money from Didi Kuaidi.
“We’re looking at up to 20 million passengers being exchanged among the four markets,” a spokesperson for Didi told Geektime. She added that there are two approaches to internationalization that ride-sharing startups (and any other type of company, really) could take: Expand on your own and invade the market, or work with the people that are already there and know the lay of the land.
“The problem with that [first] attitude is that every culture and nation is different and has its own regulatory context. The other possible road is to look at each market and look at who’s the best and most successful,” Didi’s spokesperson noted.
She points to Ola Cabs‘ understanding of an extremely multilingual landscape where other varieties of transportation, like rickshaws, are a viable business option. Ola in fact announced a new e-rickshaw service last week. She compares the Lyft-Didi Kuaidi-GrabTaxi-Ola Cabs project to the SkyTeam Alliance, an international code-sharing agreement that creates business partnerships among 20 airlines around the world: Delta Airlines, AirFrance, Alitalia, China Eastern, China Southern, Korean Air, and more.
World War U
Despite Uber CEO Travis Kalanick telling the Times of India in January that, “The anti-Uber alliance is not a corporation or identity, it’s an idea. They can have coffee together on Sundays, I guess,” this represents a major branding offensive by the four companies. Consumers in each of those markets will likely be familiar with Uber and the local giant, but not Uber’s international competition. The partnership will give Ola’s Indians and Didi Kuaidi’s Chinese an automatic intro to Lyft when they visit the United States, or Lyft customers the option of Grab when they touch down in Singapore.
The possibility this alliance could spread is very real. Imagine the incorporation of Gett in Israel and the U.K., or Careem in the Arab World and Pakistan. It might also provide some room for local players like TappCar in Edmonton or Téo in Montreal to join in the project. For now, Didi would not go beyond saying the possibility definitely exists, declaring there were no current plans to expand it.
San Francisco-based Lyft and Beijing-based Didi formally announced their alliance in September with a $100 million investment from the Chinese company in its American counterpart. GrabTaxi and Ola joined the consortium in December.
“Didi Kuaidi is excited to form this groundbreaking collaboration with Lyft, the first company to develop a peer-to-peer service,” Didi’s CEO Cheng Wei said at the time, deliberately side-swiping its main rival Uber. “From our home base in China, Didi Kuaidi is building China’s largest one-stop on-demand transportation service platform. As the industry innovation leader, Lyft will continue to build upon its existing market and brand power.”