China’s Didi chases Uber to Mexico

Global Business

China's Didi chases Uber to Mexico

After defeating Uber on its home turf, China’s top ride-hailing service provider DiDi Chuxing is launching a campaign to establish itself in its US rival’s backyard – Mexico.

Mexico City is one of Uber’s busiest global markets. After five years of operations in the country, the U.S. tech giant counts nearly a quarter million drivers and seven million users across 35 cities. DiDi wants a piece of that market.

CGTN’s Alasdair Baverstock reports.

“Mexico and Latin America as a region is one of the fastest growing in terms of Internet and smartphone penetration,” said Pablo Mondragon, the Operating Leader for Mexico City, Puebla, and Toluca at DiDi

“And for Mexico City, it’s one of the biggest cities in the world, and in terms of mobility there are many challenges,” he added.

Home to around 23 million people, and with 5 million cars on the capital’s roads every day, Mexico City presents numerous transport challenges.

Uber currently holds around 85 percent of the market share. But with a campaign aimed at recruiting drivers and tempting customers, DiDi appears to be gaining a foothold.

The Chinese company has been pushing hard to recruit drivers and win passengers in Mexico, offering attractive bonuses to drivers and discounts to new users.

One driver CGTN spoke with was Carlos Beaña, who has switched to Didi.

“The commission Uber charges is too high,” he told CGTN, “and they would penalize you for almost anything. You’d arrive a couple of minutes late and get penalized, things like that. It also feels as if there are too many Uber drivers on the streets already.”

The policy of recruiting drivers with experience driving for its competitors appears to be a strong part of DiDi business model.

At the company’s downtown recruitment center, the lines are long, as interested Mexicans queue up to register. Many of the people in the line CGTN spoke to had driven previously for Uber.

“Definitely it’s also because of what we have to offer. In DiDi we have a 10 percent service fee, that’s compared with 20 to 25 percent on other platforms. And we also have a lot of promotions, one of which is that we are guaranteeing drivers 12,000 pesos (600 U.S. dollars) a week if they complete 100 trips,” said Pablo, who has overseen a marketing campaign across the capital that has attracted many interested clients and drivers.

Mexico has bad traffic congestion, poor public transport and almost 96 million smartphone users as of last year. So while the country may be an appetizing prospect for ride-hailing businesses, operating here has been far from simple.

In October, an Uber driver was arrested for the abduction, rape and murder of a seven-year-old girl. Elsewhere, the company has been fined by the federal government for breaching consumer rights laws.

DiDi Mexico said it’s committed to avoiding these types of issues.

“Every city has its own particularities,” said Pablo, “It’s how can we work closely with our drivers and passengers, and how can we develop technology and processes that are tailored for Mexico country and specific cities.”

As DiDi establishes itself in Mexico, the multi-billion U.S. dollar company is seeking a wider foothold across Latin America. The question now is where it will choose as its next battleground.

Arun Sundararajan talks about Chinese Didi’s growth and outlook

For more on Didi’s growth and outlook, CGTN’s Rachelle Akuffo spoke to Arun Sundararajan, author of “The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism.” He ‘s also a professor at New York University’s Stern School of Business.