Didi Chuxing Technology Co. Ltd., the Chinese ride-sharing company that bought the mainland operations of Uber Technologies Inc., will begin offering its service this month in Australia, its first foray in a Western-style country.
The scheduled June 25 launch in Australia’s second biggest city Melbourne sets Didi up for a showdown with the US rival it bought out in China in exchange for a stake.
Didi started expanding outside Asia in Mexico earlier this year, and has said globalization is a core strategy.
Its move into Australia will be a test of how it can compete in Western-style markets that might tend more towards US brands than, say, Southeast Asia or Latin America, where China has traditionally had a stronger influence.
“I think overall penetration rates for ride sharing versus overall transportation is still low so the market has great potential,” Dillon Ye, who heads up Didi’s Australian operations, said when asked about competition.
Melbourne, a city of 4.5 million people with cheaper real estate than larger Sydney, is a popular Australian entry point for companies in the “sharing economy.” Uber has routinely launched new offerings in the city, while several Chinese and Singapore-owned dockless bicycle rental companies have picked Melbourne to start in Australia.
“We welcome competition because it keeps us focused on delivering the very best product and customer experience for riders, driver partners and Uber Eats customers and partners,” an Uber spokeswoman said.
Didi did not give any investment details or a timeline for expanding its Australian operation outside Melbourne, though Ye said the firm would build up its business before moving on to the “next wave” of cities, as well as into New Zealand.
The Chinese company had started recruiting drivers in Melbourne in early June “to warm responses.” It had also done a trial in Geelong, a satellite city 75 kilometers away.
Moreover, the ride-hailing platform will adopt the same, if not more, safety enhancement plans that are currently running in China, which include several qualification checks on drivers, encrypted phone numbers, emergency call available 24/7, trip-sharing function that lets users’ families and friends know where they are and so forth.