1

Uber in China and Didi

Name

Institutional Affiliation

Professor

Date
 2

Introduction

In their venture in the Chinese market, the Uber business case is aimed at serving the

transportation ridesharing sector in the Chinese market. Uber believed they could venture into

China and succeed in the same industry. It is implied that any business is likely to thrive in

China; fewer of them fell into a gray zone, and it increases in terms of such businesses. The

decision of Uber company was due to optimistic reasons about the success of China. Uber joined

the market earlier in February 2014, which came with the introduction of luxury cars in the three

Chinese cities of Shanghai, Shenzhen, and Guangzhou. However, the nationalization of the

industry in terms of regulatory measures led to bad news for these companies such as Uber; this

issue took advantage of the gray zones. However, Uber created a separate venture with most of

the Chinese companies and partnered with some of the local investors to ensure they launched

the first business in Shanghai, although things were not hard at first.

The appealing Chinese market

Among the first challenges of Uber's business in the Chinese market on its onset of dipping

its toe are; government raids, competition from Chinese taxi companies, and police protests.

China's market has been an active one. This is due to its increase in demographics, the rise in

incomes as well as an increase in consumer expenditures which make the situation better.

Additionally, China has an interestingly increasing open business environment which has helped

the Chinese market grow and increase its attractiveness. Additionally, the Chinese market is

saved by investors who are much willing to invest in business opportunities in high-end

industries, making it reliable (Liu & Kim,2018). Uber company in this way, has been appealed to

the Chinese market and thus the reason for wanting to expand its territories.
 3

The standard competitive advantage between Didi and Uber is that Didi was superior in

terms of pricing strategies, in which Chinese believe pricing strategies are the most important

factors in considering any use and form. Uber service hardly reaches many parts and rural places

in China, but this can be offered by companies such as Didi, which makes it the best alternative.

Uber drivers could be well conformed, learned, and with good presentations, but they seem not

to know all the localities, which is disadvantageous. Didi works as a car-hailing market that

serves its citizens; hence a better reason to explain why it best offers competitive advantages

such as lower pricing, coverage for all Chinese groups, and the nature of high efficiency

(Ko,2019).

Pros and Cons of Uber China and Didi Merger

As a result of the merger between Uber China and Didi, some of the advantages are that the

two companies split their roles, profits, and losses. This is explained by the share of resources in

that Didi's acquisition of the Uber company resulted in savings for both companies in terms of

promotional and operational costs. This also means that subsidies are likely to decrease while

fares are expected to increase, and the merger between the two rival cab companies has come to

an end the unending battle and competition for success in the market (Vendrell-Herrero et al.,

2018). The two came to a conclusion that Didi was to take control over Uber China’s rand and

continue to run independently (Batae,2018).

However, the main challenges are that the Uber-Didi merger has caused a major issue in

China’s monopoly in the taxi industry. All these are concepts aimed at showing how much

significance is expected within a firm and how much it is likely to reflect the success and

challenges of other mergers. The issue of monopoly is likely to raise consumer costs of accessing

the services and products that is evident in the Didi-Uber China merger. In terms of expansion
 4

strategies, Uber China's expansion strategies were aimed at addressing issues such as their initial

aim to join the market by first targeting foreigners among other ex-pats who reside in China

(Adams et al.,2019). This would be made possible by offering an English-ride hailing service to

the aimed population to ensure they are effective. On the other hand, Didi has been invested in

the local market, has consistently participated, and created value in the market, which created a

competitive advantage for them and a thrive in the market.

Evaluating Uber’s Leadership Team

Uber is a global brand that is highly recognized, and its means ridesharing, and its logo is

known to over 60 countries. The success of Uber in most countries is due to its authoritative

leadership style. However, it has often faced challenges that are blamed on the role of the

company in addressing both its strengths and weaknesses to achieve success or meet client

needs. On the other hand, the company's organizational structure is often compared to being a

champion's mindset, meritocracy, or always hustling mentality (Fan et al.,2019). The key culture

is that employees and the rest of the team work on the idea of addressing whatever it takes to

win, even though it could mean the sacrifice of ethical and moral values. The culture is

straightforward despite it having a negative aspect, such that it focuses on intense growth and

competition, and this means they fail to prioritize compliance, transparency, and coordination.

This gives Didi a competitive chance to handle the rest of the failures and use them as a

competitive advantage in meeting the company's needs and market needs.

Uber is a well-recognized brand that works best on its leadership structure such that it has

hired Frances Frei to be the head of its leadership. The company prioritizes training of both

employees and leaders to address challenges and improve their service provision. Managers are

often held accountable for all their leadership challenges to ensure they find quicker solutions the
 5

next time they address the same issues (Han & Gao., 2021). The leadership role is expected to be

employed by Didi towards meeting the expectations of the needs of the Chinese people in the

transport industry. Uber has high standards of service, and it is made possible by signing up

drivers and cars which are verified. The other strength is that Uber is a shift from an authoritative

leadership style to a transformative one (Ferrari,2018). The shift, therefore, addresses the

challenges in leadership in the high-end taxi company and its influence on another leadership

style.

The scandals, therefore, at Uber are more likely to be related to a negative form of

leadership. This is a key factor that Didi should incorporate in their business structure such that it

is significant to address challenges through other forms of leadership. Otherwise, choosing the

right kind of leadership style is expected to reflect better outcomes and a more successful

company. Fighting the negative challenges will likely boost the roles of the business and allow a

healthy competition and eventually growth and success of the firm like Didi (Boesten,2020).

The workforce at Uber is managed through consistent algorithms such as adopting

incentives usage, ratings, pricing, and extensive training of their employees and managerial staff.

Therefore, in an attempt to address the issue of bad customer experience during their ride, the

rider is allowed to rate the drivers to identify small issues that can be changed to meet client

satisfaction often. Therefore, Didi should adopt the concept of meeting customer satisfaction and

ensuring the team asserts success in workforce duties. By implementing ways of motivating

employees and the entire team, Didi could take part in addressing each of these issues by

offering the best solutions to their employees. A happy workforce leads to better motivation

hence success in any field, and by issuing incentives, the team can successfully offer other

services such as online training for similar concepts and generally a success in the uber ride.
 6

Conclusion

The Uber-China and Didi merger has led to success in the transportation industry in China

and has also led to successful decision making in reducing the competitive nature of two

companies offering taxi-hailing business. The two have faced both advantageous reasons in

joining as a merger as well as challenges; this shows the concept of lower operational costs

witnessed as a result of the merger and other benefits such as sharing of profits and losses.

Additionally, the concept of the merger has been fostered by the appealing Chinese market and

has prospered henceforth. Uber's leadership team and culture have been successful and have

faced some challenges as well. However, if Didi wishes to understand their operation in order to

solve the issue, it is evident that it must apply Uber’s strategic leadership skills.
 7

References

Adams, D., Adams, K, Ullah, S., & Ullah, F. (2019). Globalization, governance, accountability

and the natural resource ‘curse’: Implications for socio-economic growth of oil-rich

developing countries. Resources Policy, 61, 128-140.

Bătae, O. M. (2018). Ethics and the impact on corporate governance. Cross-Cultural

Management Journal, XX(1), 59-64.

Bostoen, F. (2020). The Uber-Grab merger and the potentially anti-competitive consequences of

the battle for ride-hailing dominance. Eur. Competition & Reg. L. Rev., 4, 64.

Fan, Y., Xia, M., Zhang, Y., & Chen, Y. (2019). The influence of social embeddedness on

organizational legitimacy and the sustainability of the globalization of the economic

sharing platform: Evidence from Uber China. Resources, Conservation and

Recycling, 151, 104490.

Ferrari, M. (2018). Uber in China: the entry of a global new economy into the Chinese market.

Ko, S. (2019). Didi Chuxing: Expansion and Risk Management. SAGE Publications: SAGE

Business Cases Originals.

Liu, Y., & Kim, D. (2018). Why did Uber China fail in China?–Lessons from Business Model

Analysis.

Vendrell-Herrero, F., Gomes, E., Bustinza, O., & Mellahi, K. (2018). Uncovering the role of

cross-border strategic alliances and expertise decision centralization in enhancing

product-service innovation in mines. International Business Review, August 2018, 27(4),

814-825.
8