Uber has recently launched a new carpooling feature in the Chinese city of Chengdu. The move comes at an interesting as the ride-hailing battle continues to intensify in Asia.
For those unfamiliar with the company, Uber is a mobile application that allows users to hail a private car right from your phone. Uber connects you with one of their drivers in just a few minutes and lets you know when they have arrived at your location. The company has been met with a great deal of resistance in the United States from traditional taxi services as Uber continues to steal market share. But the company has its sights on growing markets abroad, which may prove to be even more profitable.
The new service in Chengdu, known as “UberCommute” builds on Uber’s growing carpooling function in China. The service matches riders with drivers who are already going to a similar destination as them. It is pretty similar to the traditional idea of carpooling as well as services offered by a few of Uber’s rivals.
In the United States, Lyft, introduced basically an identical option last November. Furthermore, France-based BlaBlaCar and Zimride (the company Lyft’s founders originally started) have both provided a similar services for people taking longer trips as an alternative to trains or planes.
Typically Uber introduces new services in its hometown of San Francisco or other U.S. cities, however, China has become a major battleground in the ride-hailing industry. According to Uber’s rival Didi Kuaidi, China is well suited for these ride services as it is projected its urban population will grow by 20 million people per year and the country already has 100 cities with populations of more than a million. In addition, only 10% of people in China own cars, versus 80% in the United States.
These conditions make China a prime market for ride-hailing and carpooling. Uber is positioning itself to become the industry leader in China as it has done within the United States. This past June, Uber announced plans to invest more than $1 billion into its operations in China.
The competition is just starting to heat up. We will be sure to witness a great deal of investment within China over the next several years from Uber and its competitors.