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Didi (China) Targets Taiwan Expansion with Franchising Model

20 Dec 2017 - Didi Chuxing, the ride-hailing giant that vanquished Uber Technologies Inc. in China, is turning to franchising in Taiwan as it expands its business beyond the mainland.

Didi plans to only operate as a taxi hailing platform in Taiwan and is seeking to work with existing drivers that it’s recruiting through its Facebook page. The recruitment is being done by LEDI Technology Co., which is the authorized franchisee in Taiwan, the company said in a statement.

While San Francisco-based Uber has taken its business around the world, Didi has been more cautious as it focused on shoring up its grip on ride-sharing in China. The Beijing-based company has a $50 billion valuation and raised more than $5.5 billion earlier this year, giving it cash to compete aggressively in foreign markets as it also builds capabilities in artificial intelligence and driverless cars.

LEDI “is conducting market research and exploring extensive community partnerships in Taiwan,” Didi said in the statement on Tuesday. “There is no definitive timeline at this moment.”

Didi hasn’t yet applied for a license for its Taiwan business, the Taipei-based Economic Daily News reported Tuesday, citing an unidentified official from the transport ministry.

The steps taken by the Chinese company are a contrast to Uber, which halted Taiwan operations in February amid opposition from the government and local operators. It later returned to the market after agreeing to work with taxi companies.

Taiwanese lawmakers and the taxi industry have been effective in getting the world’s most valuable startups to comply with local rules. Fines for illegally transporting passengers can be as much as NT$25 million ($834,000), among the highest penalties faced by the company anywhere in the world. Uber reportedly racked up NT$1.1 billion in fines in January alone.

Didi has only slowly expanded beyond its home market. In Hong Kong it offers some specialist services, such as sedans taking passengers across the border to Shenzhen.


Bloomberg Technology

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