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September 17, 2015

Lyft & Didi Kuaidi alliance takes taxi battle to Uber

Users of each app will be able to hail drivers that operate on the other company's app.

By James Nunns

An alliance has been formed by Uber’s biggest rivals to tackle the software maker’s rapid expansion.

The international alliance, formed between Lyft and Didi Kuaidi, will allow users of each app to hail drivers who are operating on the other company’s app.

To help boost the competition to Uber, Didi has also invested $100 million in Lyft.

To simplify the process, each service will collect payment in the user’s native currency. This could be just the start for the alliance, with reports indicating that discussions are being conducted with India’s Ola and Singapore’s GrabTaxi.

The announcement was made at an event in New York, where it was made known that the apps won’t be compatible with each other until next year.

According to John Zimmer, President, Lyft, the agreement came about after he approached one of Didi’s investors for advice on expanding in China. However, the hurdle of regulations and cultural difference led to the investor recommending teaming up with Didi.

Uber’s rapid expansion outside of the US has meant it is now available in 60 countries. The growth hasn’t been met positively in every part of the world, with some services being banned in countries.

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China’s Didi Kuaidi, which was only formed earlier this year following the merger of two local rivals, shares similar investors as India’s Ola and GrabTaxi in Singapore.

Competition in Asia is particularly heated, with widespread smartphone adoption and dense urban populations creating a hot bed for the ride-hailing apps.

Didi is growing with significant speed; it closed a $3bn funding round last week and was valued at $16 billion. Ola raised $226 million and is valued at $5bn.

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