Author(s): Raghu Gopal
On Tuesday, Uber announced a partnership with Alipay that will allow Chinese travellers to pay for Uber rides using Alibaba's mobile payment service, Alipay. Although Alipay is formally a separate company from Alibaba, to comply with Chinese financial regulations, in practice it's closely affiliated to it. Uber is available internationally, now in more than 400 cities and 68 countries. With about 400 million users in China, Alipay brings Chinese Uber users greater convenience when travelling.
Uber users have been able to use Alipay to pay for their rides in mainland China since 2014, and in Hong Kong, Taiwan and Macau since early 2016. But until now, Chinese travellers using the Uber app in other countries had to endure the complexities of connecting a dual-currency credit card to their account, and were billed for their rides in US dollars. The real development now is that Alipay users will pay for Uber rides directly in Chinese yuan. There's a peace of mind element here for users.
The deal between Uber and Alipay comes just a few weeks after Lyft and Chinese company Didi Chuxing (formerly Didi Kuaidi) launched a similar integration allowing Didi riders to hail a Lyft car in the US using its app, and vice versa. That partnership is part of a larger global alliance that also includes Southeast Asia's Grab and India's Ola services.
In India, Uber will exploit the existing relationship between Alipay and Paytm, the country's largest payment platform, to expand its global reach. Since 2015, Alipay has also been sharing its technology with the Indian company. Uber and Alipay also announced a deepening of their collaborative global expansion efforts in India, through a similar strategy and product integration with Paytm.
Alibaba gains the most from this move — Alibaba is close to Didi Chuxing, Lyft and Uber on a global scale now. The partnership with Uber is expected to bring simpler, quicker ways for Chinese travellers to use one app and a single payment option when visiting other countries. We also expect the service to offer Chinese and Indian travellers a worry-free experience and eliminate language barriers or the need for currency conversions. Furthermore, it could be the first step through the consumer door for Alibaba in some international markets. The integration is a shrewd move on Uber's part to offset any advantage Lyft and Didi Chuxing may have had in attracting Chinese travellers overseas.