Daimler and Geely are working on a ride-hailing in China

You wait forever for a better version of taxi services, and suddenly there are too many. Certainly that has been the case in China, where fierce rivalry has led to the exit of US leader Uber. But no one has told Chinese carmaker Geely that. Yesterday it was reported that Daimler and unlisted Zhejiang Geely Holding are working on a ride-hailing joint venture in China. The share price of Geely’s subsidiary, Geely Automobile, jumped as much 6 per cent, although it fell back later… The home governments of both companies are tightening emissions rules. Ride-hailing might help meet those goals. But the focus is likely to be on China, the larger market… No matter, this endeavour faces serious challenges. Ride-hailing is a notorious cash burner… The business needs huge scale. CaoCao, a Geely-backed platform for electric-vehicle sharing, reportedly has 20 million users. That pales in comparison with market leader Didi with 25 times that many… True, Daimler can bring its global user base to the venture. Yet its three mobility units combined command only 3 million users more than CaoCao… Both companies are far behind the global market leaders, including Uber, Didi and Lyft… This ride may well go nowhere fast.

Lex.

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