Business Impact

China’s Ride-Hailing Firm Didi Chuxing Heads to Brazil

And so it squares up against its rival Uber once more.

The Chinese ride-hailing company Didi Chuxing has announced that it will start working in Brazil.

As the Financial Times reports (paywall), the company won’t be setting up an independent operation in the country. Instead, it’s forming a partnership with Brazil’s domestic ride-hailing firm, 99. It’s not clear what the deal involves, exactly, but a 99 spokesperson tells TechCrunch that Didi has ponied up “in excess of $100 million,” which will at least secure it a seat on 99's board.

It’s no secret that Didi wants to expand outside China. In an interview with Bloomberg late last year, the company’s president, Jean Liu, stated plainly: “We’re definitely going global." And it might be required. The Wall Street Journal reported last month that changes to ride-hailing regulations in China, which now ban non-local residents from driving for such services, were forcing many drivers off the road in the nation’s largest cities.

By expanding into Brazil, though, Didi will once again square up against its biggest rival. Uber sees Latin American countries as a huge opportunity, and Brazil is currently its third-largest market. It’s not the first time that Didi has supported an Uber competitor, either. In 2015, it invested in Lyft, America’s second largest ride-hailing company.

The relationship between Uber and Didi is, arguably, a little strange. Last summer, Uber gave up on its attempt to storm the Chinese ride-hailing market after losing billions of dollars in trying to make a success of it. Instead, it sold its operations to Didi, and they now both have a seat on one another’s board, minus voting rights.

Didi’s chief executive, Cheng Wei, has told Bloomberg that the situation means that the two companies will “learn from each other.” But clearly whatever they learn will only serve to help the two battle it out on the global market. Who’s hailed as victorious outside of their respective domestic markets remains to be seen.

(Read more: Financial Times (paywall), TechCrunch, Bloomberg, “With Its Sale in China, Uber Drives a Better Bargain,” “A Chinese Rival Beats Uber at Its Own Game”)

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