Uber faces tough competition in China

Does Uber properly share the bounty with drivers and does it operate in accordance with rules that govern taxis and limos in various cities?

A cab ride in China usually costs a few dollars. And if you’re stranded in Shanghai without a ride, you can use one of many Chinese driver booking service apps that’ll help you find one. But Uber's move into the market may not go so smoothly as they plan.

"There are a lot of Chinese companies that have been backed by large technology firms," notes Shaun Rein, author of The End of Cheap China. "It’s pretty easy to get a taxi," says Rein. "That will create a very competitive environment, so it’s not going to be easy for [Uber]."

Uber says an emphasis on safety will make it stand out among the competition in the country. It says it will ensure its drivers will ride slow and steady – a rarity in a country where a cab ride can sometimes feel like a combination of NASCAR and a game of chicken.

But after only six months in China, Uber’s been forced to reduce its prices – a sign, says Rein, that it’s already beginning to falter.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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