Since June, Uber and Didi have spent billion dollars to gain drivers and customers by their side.
Uber rapidly enlarges all over the world, but this expansion could be endangered in Asia, where its competitors such as Didi Kuaidi, receives money from biggest investors from Asia and the US in order to develop itself.
Jack Chen, who is working in a medical clinic, is also a part-time driver at Uber. He states that he is content with his money, as Uber gives him 110 per cent, so he receives double than the fare the customers pay.
“The reason I chose to work for Uber over Didi was because my friends told me Uber pays the highest subsidies,” Chen declares.
For those having a full-time job at Uber, the subsidy can go up to 130 per cent.
These financial measures were taken in order to beat the local competitor in China, Didi Kuaidi.
Since June, Uber and Didi have spent billion dollars to gain drivers and customers by their side. The Financial Times stated that Uber spent more than a billion, while Didi, more than half a billion.
As it spends huge sums to gain the first place on the market, Uber now reduces subsidies. Jack Chen states that, although now he is content with the money he gets, he will give up his job as a driver for Uber if the subsidies continue to lower.
Some of the strategies used by Uber in order to win the market are bigger subsidies for driving at peak hours and lower fares for customers.
The big competitors, backed up by huge investors such as China Investment Corp. and Alibaba, represent a major problem for Uber.
In order to gain profitability, Uber now pays a full-time driver with about 12,000 yuan.
In terms of services, Uber recruited private drivers, while Didi started offering private-car lifts.
With respect to ride volume each day, Didi boosts itself with 3 million rides, while Uber, 1 million.
Asked why they chose to work at Didi instead of working at Uber, some drivers said that the working process at Didi is more efficient than that from Uber. Also, Didi represents a safer place to work, as many didn’t believe Uber would manage to remain on the market for a long period of time.
In this tight competition, it now remains to be seen which of the two companies will resort to the best marketing strategy in order to be a leader.
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