Kuaidi Dache’s co-founder explains why his company is killing it in China’s taxi app market

When it comes to China’s taxi app market these days, there are really only two companies worth mentioning: Kuaidi Dache and Didi Dache. According to Analysis International, the two of them collectively control more than 99 percent of China’s taxi app market. They’re also both among the most valuable startups in China, with recent valuations exceeding US$1 billion.

But despite all the money flowing into startups like Kuaidi Dache, China’s taxi app market is still relatively unsettled. Local governments are still trying to figure out how it ought to be regulated, and the market’s future hangs in the balance. Recently, I got a chance to speak with Kuaidi Dache co-founder Joe C. Lee about how he sees the market and why Kuaidi Dache will come out on top.

Joe C. Lee

When I asked Lee how his company has been able to secure the massive investments it has netted over the past few years, his answer was simple: dominance. He pointed out that the Kuaidi Dache app has more than 200 million downloads, and that its service covers 358 cities in China including Hong Kong and Lhasa. With Kuaidi Dache clocking “up to 6 million orders per day,” who wouldn’t want to invest?

But of course, Kuaidi Dache isn’t the only game in town. Lee says that he sees the company having a leg up over its competitors thanks to its marketing. For example:

We had a World-Cup themed campaign that offers discounts for future rides to users who take part in a game to correctly predict the results of football matches during the ongoing tournament in Brazil.

Kuaidi Dache also offers riders discounts via its loyalty points program. Users can earn points by taking a ride, posting about Kuaidi Dache on social media, or recruiting a new user for the service, and the points can be spent to buy items from some of Kuaidi Dache’s retail partners. Users can buy “anything from a basic lottery ticket to a night’s stay in a hotel,” Lee says, and that keeps them coming back.

Of course, being based in China, Lee says that in addition to keeping users happy, Kuaidi Dache also has to keep regulators happy:

Kuaidi adopts the “deal with regulators first, launch later” approach. One thing we learned is if we want to grow fast, we need to make sure the government supports us. Because in China, they can stop you in one day – they shut down your server and you’re out. [So] working with regulators has become Kuaidi’s competitive advantage in China, and why it has been able to add so many new cities in such a short amount of time.

And of course, Kuaidi hasn’t limited itself to dealing with mainland regulators, either. The service is already available in Hong Kong (which, despite technically being a part of the People’s Republic of China, is governed separately). Does that foreshadow more international expansion for China’s top taxi app? Maybe, but don’t hold your breath. “Going international is always our aim,” Lee told me, but “Hong Kong is an important market to secure before we go on the international stage because we can observe how people in an international and multi-cultural city react to […] a mainland China brand.”