China’s Didi Chuxing, which bought Uber’s Chinese business in 2016, has launched a food-delivery business. It’s another way in which Didi continues to compete with Uber, which already has its own world class food-delivery services, UberEats.
Didi launched its service April 1 as a pilot program in Wuxi, a city in the southern part of China’s Jiangsu province, according to TechCrunch. The company claims to have already captured a third of the market in Wuxi, although low promotional prices and other incentives may be boosting business.
The launch of Didi’s pilot program comes shortly after Uber confirmed that it will phase out its UberRush on-demand delivery service, which currently operates in three U.S. cities. The shutdown will allow Uber to focus more resources on UberEats, and fortify it against potential competition from Didi.
After it bought Uber’s Chinese operations in 2016, Didi has worked to expand the types of services it offers. In addition to the food-delivery pilot, Didi is working with Renault-Nissan on a car-sharing service for China. The company is also trying to make inroads into other Uber markets, including Mexico and Brazil.
Didi’s ambition shows that Uber’s strategy of shedding international operations to concentrate on core markets may not be enough. Following the 2016 Didi deal, Uber merged its Russian operations with local tech company Yandex last year. Last month, it announced the sale of its Southeast Asian operations to local ride-hailing firm Grab.
These retreats are not unexpected for a company that has spent over a year dealing with high-profile scandals. CEO Travis Kalanick was ousted last year, and Uber spent a year fighting a lawsuit from Waymo over self-driving car trade secrets. Now Uber faces the fallout from a fatal crash involving one of its autonomous cars. But even without the scandals, Uber faces stiff competition from rivals like Didi.