Can Uber become Chinese?

Uber operates all over the globe. But in China, as usual, things are a little different. Uber is raising money separately for its China business, looking primarily at Chinese investors, and doing its accounting separately. In fact, Uber China spokesperson Liu Zhen told the Beijing News on Wednesday that Uber China even plans to list on the domestic stock market someday. Uber China, it seems, wants to become Chinese.

That’s not an editorial judgement, by the way – it’s something Uber CEO Travis Kalanick said repeatedly last month in an interview with Chinese magazine Caixin. “We want to make sure that Uber (China) is authentically and thoroughly Chinese, a real Chinese company,” Kalanick said, “For a company that at least started foreign, but is now becoming Chinese, the standard or the bar for being Chinese is higher than the traditional Chinese company. So we have to go above and beyond in becoming truly Chinese.”

But is that actually possible? Is it desirable?

Can Uber become Chinese?

That’s a question that’s not as simple as it first appears. What, after all, does it even mean to be Chinese? For an individual, it is possible to become a Chinese citizen (although it is exceedingly rare). And a foreign company can, of course, register, operate, and list a subsidiary or spin-off company in China.

But whether they’re considered Chinese by the public is another story.

To many, this might seem like an irrelevant question. If you live in a country like the US or Singapore, where cultures and nationalities vary, you probably don’t care much about any company’s country of origin beyond some occasional pride in your own country’s most successful firms. But in China, the line between domestic and foreign firms is much clearer, and consumers tend to be much more conscious of it. Domestic companies can play off of hometown pride and, occasionally, exploit nationalism, but they’ve also got a reputation for being lower-quality. Foreign companies are often perceived as expensive, but more reliable and higher-quality – think Apple, or even KFC (foreign fast-food is considered a cut above low-end eateries in China).

Personally, I’m not aware of any foreign company that was able to adapt to China so effectively that it actually became Chinese, at least in the sense of public perception. And I spoke to several people knowledgeable about Chinese culture who couldn’t name any such companies, either. Uber can adapt its model to suit the Chinese market, but there’s nothing it can do that will make people perceive it as a Chinese company.

“If Uber is already widely recognized as foreign – which it is – I can’t imagine it really being able to change that perception,” said Eric Fish, author of China’s Millennials: The Want Generation. In fact, Fish told Tech in Asia he wonders why it would even want to: “If anything, being foreign probably helps, since foreign companies in general tend to be seen as more trustworthy than domestic.”

At the end of the day, whether Uber is Chinese or foreign likely doesn’t matter much to consumers, Fish says. “From the perspective of most young Chinese, I doubt that distinction would matter. I don’t think many people are too concerned with the nationality of their hailing app if they’re trying to get a cab.”

Swaying officials

But Uber, of course, isn’t just trying to attract users. It’s also hoping to sway the perceptions of Chinese officials, who still haven’t made it clear how Uber and other private-car services will be dealt with. Uber’s push to “become Chinese” is likely designed to convince officials that Uber is going to serve the domestic economy in the same way that a Chinese company would.

That’s a big deal because Chinese regulators are not always kind to foreign tech companies. And there are already signs that the government prefers Uber’s Chinese competitor Didi Kuaidi: China’s sovereign wealth fund has apparently invested in the company, giving the government a stake in Didi Kuaidi’s success.

So what can Uber do? Its attempts to become Chinese are probably a good start – separating the China business, seeking Chinese investors, and promising to list on the Chinese market are all ways to convince officials that Uber won’t just be a leech, sucking money out of the Chinese market and sending it back to its parent company in the States.

But I suspect none of these measures will be enough to make officials actually see Uber as Chinese – accomplishing that might well be impossible. And when given the choice between a truly Chinese company like Didi Kuaidi, and a well-adapted foreign company like Uber, there’s a good chance officials will side with the Chinese firm.