Chinese transportation company Didi Chuxing started publicly in Mexico with the launch of a website that advertises its service to drivers and passengers, and sets the stage for a potentially costly confrontation with rival Uber.
Late last year, Didi began making plans for Mexico, Reuters reported, marking the company’s first launch outside of Asia.
The congested streets of Mexico, the underdeveloped public transport system and the growing user base of smartphones make our country “fertile ground” for application-based travel services.
Didi’s website said that the company would start operating “very soon”, without providing a specific date.
The company said it will not reduce rates until June 17 in an effort to recruit drivers. After that, it will cut the rates by 20%, a little lower than what Uber charges in most markets.
It is also offering bonuses to drivers who recruit other drivers and passengers, a common tactic for companies competing to gain participation in a new market.
Uber, based in California, is the leading company in private transportation services in Mexico, where it has 7 million users in more than 30 cities. In July last year, Uber achieved 87% of the market in Mexico, its largest share in Latin America.
In 2016, Uber sold its business in China to Didi after losing billions of dollars trying to compete with the Chinese firm in its own territory.
It was not immediately clear in which Mexican cities Didi will start operating. The company has been working from an office in the trendy Colonia Juarez, in Mexico City.
In a city with high levels of insecurity like the Mexican capital, Didi will offer drivers and passengers a security button in their application that will connect them with the police and other emergency contacts, the company said.
Didi will start with a car service, according to its website, although sources said the company is also considering other modes of transport, such as scooters, motorcycles and shared bicycles.