The largest rideshare company in China, Didi Kauidi, has recently invested in Lyft. This will come as a blow to Uber, and there is already speculation that this investment was a direct manuever to combat the global expansion of Uber. This move is part of a Global Taxi Alliance, created in response to Uber’s tremendous growth, could potentially allow booking accross rideshare platforms. That means that you could use the Lyft app in China to reserve a Didi Kauidi vehicle. According to the Wall Street Journal, the investment was a part of Lyft’s latest round of funding, which closed in May. This investment bodes well for the future of Lyft, as Didi Kaudi is a powerful strategic partner to have. Lyft has yet to expand internationally, but this partnership would set them up well for such a move.
Lyft has just recently published a post on their blog detailing their new relationship with Didi, the Chinese ridesharing company. The post expands upon the notion that there will be cross platform sharing, which will allow Lyft users to access ridesharing in China through Didi, and vice-versa. According to Lyft, there were roughly 8 million people traveling between the two countries in 2014, a sizable amount of users that could be adapted to the Lyft platform. This is the first large step that Lyft has taken towards international expansion, following behind it’s rival Uber which has already gained a foothold in the international market. More importantly, this strategic partnership will give Lyft leverage in the global market for ridesharing as it continues to battle the significantly higher funded Uber. The amount of the investment is $100 million, a sizeable number that displays Didi’s commitment to the relationship.
It’s great to see Lyft making strategic moves like this. We’ve watched as Uber has become a global rideshare powerhouse, ignoring legal issues as they aggressively expand. Lyft on the other hand has taken a backseat to Uber in many markets, only recently taking a more aggressive stance. This is good and bad for us drivers. Lyft has also decided to cut the rates that drivers get paid in most cities. While this will help them stay competitive with Uber, it’s a blow to the bottom line of drivers. Rate cuts are usually dressed up as a maneuver to create more demand, which should increase the pay of drivers. But this isn’t always the case, the same amount of rides will equal lower pay after rate cuts, there’s no way around it.
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