Does Didi Deserve Credit for Uber’s China Fail?

For two years, Jean Liu and Travis Kalanick were mortal adversaries, as their businesses, the world’s two largest ride-sharing companies, fought an increasingly bitter and expensive war. Kalanick, CEO of Uber, the San Francisco-based ride-hailing app, was trying to muscle into China, where Liu is president of Didi Chuxing, Uber’s Chinese equivalent.

Charles Clover at the FT offers this dramatic lede for an article that lays the credit for Uber’s defeat in China at the feet of Didi Chuxing’s Jean Liu.

Ms. Liu and her team at Didi deserve much credit for their victory in China’s shared-ride wars. All of us wish them only the best as they take on what will undoubtedly prove to be the far more formidable adversary: a Chinese government decidedly uncomfortable with leaving in the hands of a privately-owned company an increasingly essential piece of the nation’s transportation infrastructure.

But an honest assessment of the battle must conclude that Ms. Liu was helped at many turns by a series of unforced errors on Uber’s part. I won’t go into them here – take a look at my interview with Jeremy Goldkorn at SupChina, where I lay out Uber’s four most fundamental mistakes in China.

In addition, let’s also remember a few things:

  • Didi’s financial backers gave the company the war chest it needed to fight a street battle of attrition against one of the planet’s best funded unicorns.
  • Ms. Liu’s boss, Didi Chairman Cheng Wei, was hardly a figure head in this battle. Not for nothing did Forbes Asia name him 2016 Businessman of the Year.
  • Didi came to the battle fighting on familiar, home ground, and was in substantial possession of the field already when Uber showed up. Uber was battling an entrenched player as an interloping underdog in a market increasingly unfriendly to outsiders. Uber’s rhetoric and war-chest aside, they were the weaker player.
  • It was not “Jean vs. Travis.” It was Jean vs. the Uber China team, and as time goes on it will become more clear that Travis and his team were relatively hands-off, allowing the local team to run things. Didi defeated Travis’s partner’s team.
  • Regulatory changes in the market played a significant role in the driving Uber’s surrender. Unless Didi orchestrated those (not impossible), the government was also a player in the game. And if Didi did orchestrate those, protectionism beat Uber as much as Didi’s executive team.

To the victor goeth the spoils, and Ms. Liu is clearly a capable executive whose career is now pointed toward even bigger and better things. But there is nothing learned by pretending that this was not a far more complex battle than the FT seeks to portray as it graces Ms. Liu with the laurels.

One more interesting point from the article. Ms. Liu and Didi continue to play the outcome as a “win-win” for Didi and Uber. I’ve spent a career in PR in China, and to me that messaging carries a very heavy whiff of spin. I’ll explain why in a later post.