Didi Takes on Uber in Europe; First Stop Estonia

Uber and Didi Chuxing are once again going head-to-head, this time in Estonia, according to Bloomberg. The Chinese giant with a multi billion-dollar war chest is backing Estonia’s Taxify with a financial investment and support on technology developments, the companies said.

The partnership, Didi’s first major move into Europe, will give Taxify a boost to grow in cities from Prague to London and launch in cities including Paris in the coming months, founder Markus Villig said. “It will be hard for Uber to be number one everywhere -- we see each region will be dominated by a local champion,“ Villig, who is also Taxify’s chief executive officer, said in an interview. “We’re focused to be No. 1 in Europe and Africa.“

Last year Didi bought Uber’s brand, business and data in China, drawing a truce to a bruising battle between the two companies for leadership in the country. Didi has since expanded globally by sponsoring local players, and is already an investor in Grab, Uber’s biggest competitor in Southeast Asia, as well as Ola, the largest ride-hailing company in India, and Lyft, the main Uber rival in the U.S.

Uber has also been merging with local partners, following expensive attempts to win over regional business. Last month the San Francisco-based company and Yandex announced they would merge their ride-hailing businesses in Russia. Uber will invest $225 million and take a 36.6 percent stake in the new venture that will be valued at $3.73 billion.

Taxify’s strategy is broadly to steal market share from Uber in cities from Tallinn, Estonia to Johannesburg by focusing on items like driver pay and training, Villig said. Europe is promising in terms of possible regulatory easing that would unlock markets like Germany and Scandinavia, while Africa has potential to dramatically grow in terms of number of rides, he said.

“Didi didn’t have a partner yet in Europe and Africa, that’s where we come in,“ said Villig, who described Didi as largely a passive investor, whose investment doesn’t entail strategy or management changes at this point.

Despite a number of setbacks in Europe, Uber still dominates key markets, and has been working to win over regulators. It has recently been working with the Estonian Tax and Custom Board on a pilot project on taxation between customers and drivers.