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Chinese Ride-Sharing Company Eyes Move into Mexico

If Didi goes to Mexico, it would mark second showdown with Uber.

by on Dec.08, 2017

Chinese ride-sharing giant Didi is contemplating a move into Mexico where it will compete with Uber.

A report out of China indicates Didi Chuxing, the largest ride-sharing company in China and perhaps the world, is preparing to expand internationally for the first time by setting up shop in Mexico.

Didi basically ran Uber out of the Chinese market where Uber sustained losses totaling roughly $2 billion. If Didi moves into Mexico it would set the stage for a huge clash where Uber has established a large presence with more than 7 million users spread across 45 cities.

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Speculation about Didi’s plans, like Ford Motor Co.’s efforts to partner with Alibaba, underscore the growing influence the Chinese have on the global automotive industry. During the next decade ride-sharing companies are expected to become the major buyers of new vehicles around the world.

Didi has discussed its global ambitions, but has not made any commitment yet outside of China or about the timing of any expansion. However, it has a built-in market for its services in light of the growing number of Chinese customers who travel overseas.

(Uber facing criminal probe due to “espionage.” Click Here for the story.)

Didi is looking to expand its reach globally with a possible move to Mexico. Currently, it has limited its scope to investing in other companies around the world.

Last April, Didi raised $5.5 billion from investors, in part to fund global expansion.

About a month ago, Didi met with ProMexico, the government trade and investment organization that has guided foreign investment in Mexico since the North American Free Trade Agreement was signed nearly 25 years ago, to discuss opportunities in the country, according to Mexican officials.

The move represents a significant change in the Chinese ride-sharing company’s strategy because until now, Didi’s expansion efforts have been limited to providing financial support for ride-hailing companies in other countries and a research lab in Silicon Valley that opened earlier this year.

(Click Here for more about GM’s ride-sharing plans.)

It has invested in Uber rivals around the world, including U.S.-based Lyft, Brazil-based 99, India’s Ola, Singapore-headquartered Grab, Estonia’s Taxify and Careem in the Middle East.

After ceding its China business, Uber doubled down on Latin America. Didi will also compete with Spanish ride-hailing company Cabify, which operates in seven Mexican cities. Complicating the issue is proposed legislation that would bring significant changes to the ride-sharing industry in Mexico.

Uber, which has constantly challenged government regulators all over the world, also has said the proposed regulation is so onerous that it would drive the company out of the market if passed in its current form. The regulation would ban cash fares, which Uber has said are critical for reaching riders without credit cards.

(Uber wants to launch flying cars over Los Angeles by 2028 for the Olympics. To read more, Click Here.)

Mexican authorities fear that allowing ride-sharing apps to accept cash payments would put them in direct competition with traditional taxis, which are a political force in some cities.

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