Alibaba and Tencent have agreed to merge their taxi-booking apps to create one of the world’s largest transport-hailing services valued at an estimated $6 billion.
Alibaba’s Kuaidi Dache (‘speedy taxi’) and Tencent’s Didi Dache have been cutting prices to gain share in the huge Chinese market, where more than 150 million people use their smartphones to book taxis, Reuters reported.
According to Analysis International, Didi had a 55 per cent share in December while Kuaidi controlled most of the remainder.
The firms said the two services would continue to operate under separate brands, Reuters said.
Didi raised $700 million from Tencent and DST, a Russian private equity firm, in December. SoftBank, along with Tiger Global, invested about $600 million in Kuaidi last month.
The Japanese operator also has invested $250 million in GrabTaxi (one of the major rivals to Uber and Hailo in Southeast Asia) and $210 million in India’s Ola Cabs.
Baidu in December spent as much as $600 million to acquire a minority stake in Uber, which will give it a boost as it looks to expand in China, after focusing on markets in Southeast Asia.