Pando

Uber claims 30% market share in China, to Didi's... 80%

By Sarah Lacy , written on November 6, 2015

From The China Desk

Dear world: I hope you are sitting down. I don’t want to alarm you but it seems that, once again, Uber hasn't told the truth about something. I know. I am as shocked as you are.

Three weeks ago, Uber CEO Travis Kalanick sat on stage at the Wall Street Journal’s conference in Laguna Beach and made a bold, apparently totally unsubstantiated claim: That Uber had 30% market share in China. A month earlier, he said similar to CNN. 

The claim seems curious for a few reasons. The first is that up until very recently Uber had never refuted the universally cited Chinese marketshare numbers of Didi Kuadi at 80% to Uber’s 11%. And that 11% came at the cost of some $1.5 billion in annual subsidies. The latest we've heard -- admittedly from Didi -- put Uber around 17.5% last quarter, but dropping back below 15% this. 

Yesterday, Didi made its own announcements about market share on stage in Beijing. The service completes seven million rides per day in China, has ten million drivers on the platform, and 250 million registered passengers. It claims it’s 80%-plus market share (confirmed by third parties earlier this year and never disputed by Uber until the recent claim) is increasing.

Well, someone isn't telling the truth.

Recent third party research has backed up Didi’s market share for Hitch and Chauffeur services – which only comprise one million of its seven million daily rides. Third party research on its share of taxi service (over 99%) and private car hailing (over 80%) is dated to before Uber’s wild claims.

For Uber to have tripled its market share in a market as big as China seems implausible, especially when you consider that Uber operates in far fewer cities in China than Didi. It certainly seems less possible than a player with 80% market share maintaining that share.

Here’s the biggest evidence to me that Didi is the one closer to the truth – other than sheer logic that Uber couldn’t suddenly grow that fast in a market this big when it was already spending that much to get to 11%. Didi has cut subsidies by one-third from June to October. When Uber was spending the most freely on subsidies and eating into that 80%, Didi was forced to spend up to keep pace. Forget for a moment, Didi’s claim that it’s maintained market share. Why would a company with so much capital that it can invest in competitors like Lyft and GrabTaxi, ease up on local subsidies if Uber had suddenly tripled its market share in a matter of months despite a smaller footprint?

Frankly, that Uber is keeping pace would be a remarkable feat given Didi’s dominant market position and home field advantage.

Absent more evidence to back up Uber's claims, this seems like yet another case of Uber counting on the American media to write down what it says without asking any questions.