Tea Leaf Nation 01.08.15
Ride-sharing app Uber has expanded around the world at a blistering pace, launching in a new city every one or two days. At first glance, China would appear the ideal fit for the Silicon Valley startup. Most urban residents in the world’s second-largest economy rely on sclerotic local taxi monopolies whose numbers have failed to match the country’s breakneck urbanization: the population of the capital Beijing, for example, has grown by nearly 50 percent to 20 million in the past ten years, while its taxi fleet of 66,000 remains the same size it was in 2003. The potential for a better way to get around town is clearly immense.
But on December 23, Uber suffered a setback when local authorities raided its office in the large southern city of Chongqing, a sign the company may encounter regulatory scrutiny in China similar to what it has encountered in other countries. Uber’s Chongqing travails initially appear to be yet another case in the recent string of large foreign firms finding themselves in the crosshairs of Chinese regulators—often to the benefit of domestic champions. It may come as a surprise, then, that Uber’s local competitors have come in for their share of official scrutiny as well.