Uber lands in hot water in China as Chongqing police stage office raid

Uber found itself in a pot of hot soup last Wednesday as police forces in Chongqing raided the company’s offices during a driver training session.

News of the raid first hit Chinese-language media this morning, and The Wall Street Journal confirmed the developments with Uber later this afternoon. That paper also noted that Chongqing police authorities posted a notice on their website last week informing citizens it will impose fines on drivers who use the app to earn money.

We can’t state conclusively whether or not this is the first case of a government crackdown on Uber in China, but to our knowledge, the incident at least marks the most widely-reported case of its kind among domestic Chinese media outlets.

On the same day of the reported raid, Baidu announced a strategic investment in Uber rumored to clock in at US$600 million. While that partnership will likely lead to cooperation in maps and travel booking, it will also serve to increase Uber’s visibility domestically, and possibly provide it with some credibility when the authorities come a knockin’.

China is Uber’s “grab your popcorn” market. Not only does it face stiff competition from homegrown competitors like Didi Dache (backed by Tencent), Kuaidi Dache (backed by Alibaba), and Yongche, it’s also vulnerable due to its reputation as a high-profile, influential American company. Those are the sorts of firms that remain doomed to take periodic beatings from domestic media outlets (though sometimes justifiably so). Uber’s heritage, coupled with its industry-toppling business model, arguably set it up to become a punching bag – provided Chinese people even know it exists.