Uber Is Trying To Squeeze into a Crowded Chinese Market

Dec 17, 2014 02:10 PM EST | Jordan Ecarma

Uber is determined to conquer the desirable Chinese market, but app-based taxi competitors and strict regulations are getting in the San Francisco-based company's way.

The American ride-sharing service has signed an undisclosed deal with the Chinese web services company Baidu, which now has a stake in Uber, Reuters reported.

Uber's China operations are anemic so far, with the service established in only eight cities. For comparison, domestic taxi-booking service Kuaidi is in more than 350 cities, and fellow Chinese car-hailing app Didi Dache recently raked in $700 million for future expansion.

Both of the China-based services have established relationships with national regulators, giving them an advantage. Chinese consumers may also be maxed out when it comes to app-based ride services since many of them already use Kuaidi, Didi or other options.

By 2015, taxi app users in China are expected to triple compared with last year's numbers, with Kuaidi and Didi holding 90 percent of the market.

While it has expanded worldwide to more than 50 cities, Uber has faced problems in many markets, encountering everything from taxi driver protests to outright government bans.  

In an action that kicks in Jan. 1, the French government has banned Uber's lower-priced service UberPop for not meeting a licensing requirement that says all drivers who transport paying passengers must have a license and appropriate insurance.

Uber is up against serious problems in other markets as well, with New Delhi, India, banning the service earlier this month after a 27-year-old woman alleged that an Uber driver raped her.

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