How Saudi Arabia's US$3.5B injection can help Uber in China
Funds could help product innovation, quality control, and customer service, says Uber China VP
The US$3.5 billion injection from Saudi Arabia's Public Investment Fund into ride-hailing app Uber could be best utilised in the world's second-largest economy, Zhen Liu, senior vice president of Uber China, said, as the US firm faced down homegrown rival Didi Chuxing
The funds could help Uber China improve on product innovation, quality control, and customer service, which were the company's three key areas of focus, Liu said, adding that Saudi Arabia's investment was "a vote of confidence in Uber and the ride-sharing market."
She didn't elaborate how the money could be put to work in those sectors, but pointed to services such as uberCOMMUTE as an example of recent innovation. First piloted in China last year, uberCOMMUTE enabled drivers to recoup the cost of their trip, including gas, if they shared the journey with a passenger.
Other new Chinese features included the use of payment platform Alipay to hail a ride within the mainland and abroad .
Such new forays signaled Uber's commitment to bolster its finances following reports in February that it was losing US$1 billion a year in China .
The San Francisco-based enterprise has been valued at more than US$60 billion.
In the meantime, Didi Chuxing has continued to gain ground, having recently won US$1 billion in investment from Apple .
The company, formerly known as Didi Kuaidi, claims it commanded nearly 87 per cent of China's private car-hailing market, completing more than 11 million rides per day.
"Competition makes things exciting," Liu laughed, when asked about Didi's growth. "This is only our second year in China, so we're still an early-stage company...We expect to win sooner rather than later."
Uber China's localised presence, which includes a Chinese management team and investment from Chinese investors, combined with the brand's global network of resources, were factors that could propel Uber, she said. Inking more local and partnerships could also help Uber China develop a long-term competitive advantage, she added.
At present, Uber's local Chinese partners include Baidu Maps, which reportedly accounted for 70.8 per cent of China's mapping application market.
International allies include Toyota Motor, which announced its investment in Uber last week. The deal will allow Uber drivers to lease vehicles on flexible terms from Toyota Financial Services and cover their payments through Uber earnings.