Uber is taking a different approach to its operations in China. (Photo : Reuters)
U.S. ride-hailing service Uber will be establishing a company in China consisting of local employees, partners and investors, Uber founder CEO Travis Kalanick said in an interview with Chinese news portal caixin.com.
In the interview published on Wednesday, Kalanick said that Uber does not use this business model in its operations in other countries, but China is quite different.
New technology spreads in China faster than anywhere else in the world, including the U.S., Kalanick said, adding that as an entrepreneur, this is the reason he wants to do business in the Chinese market.
Responding to the question of how much funding will be raised for Uber's operations in China, Kalanick said that finding the right partner is more important and that Uber needs a local partner to help it in dealing with government regulators and to be more relevant to the Chinese market.
Like in other countries, Uber has been under intense scrutiny by Chinese regulators. Its offices in Chengdu and Guangzhou were visited by local authorities in May.
In January, the Ministry of Transport ordered car and taxi-hailing app developers to exclude private cars from their platforms, and that all vehicles used should be owned by either taxi or rental companies.
Uber also faces stiff competition in the country. Didi Kuaidi, a joint venture launched in February through a $6 billion merger of China's two biggest car-hailing companies, currently has a dominant market share. CAR Inc, a Chinese car rental service provider, also targeted Uber in a series of ads on Weibo on June 25, implying that Uber uses private cars and is unsafe for passengers.
Kalanick admitted the tough competition Uber faces in China and said that a foreign company must remain humble in China.
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As for rumors that Uber will expand to the social networking sector, Kalanick said that there are enough of them in the market and Uber has no need to join. It will not be Uber's top priority, he said.
