Uber's Chinese rival Didi buys into bicycle-sharing startup Ofo

[HONG KONG] Didi Chuxing, China's answer to Uber, already dominates car-hailing in the country. Now it's reverting to bicycles, once the nation's traditionally preferred mode of conveyance.

Didi is investing tens of millions of dollars in Ofo, a bikes-on-demand startup conceived two years ago on the grounds of Beijing's prestigious Peking University as a student project, and which now bills itself as the country's largest bicycle-sharing platform.

The company founded by college alumnus Dai Wei operates almost 70,000 bright-yellow bikes and handles half a million rides daily across 20 cities, Didi said in an e-mailed statement.

Bicycles remain commonplace in Chinese cities and in rural areas despite rapidly growing automobile ownership, particularly because a car remains out of reach of many urban dwellers.

Cities like Hangzhou, home to Alibaba Group Holding Ltd, sponsor bike-sharing programs, and increasing smartphone use has paved the way for bike-sharing startups such as Ofo and rival Mobike.

Ofo's business is centred around college campuses, and works via Tencent Holdings Ltd's WeChat.

Users scan a code from their smartphones to unlock parked bikes and enter their destination and pay via the messaging app.

Didi will consider folding bike sharing into its network as the two explore collaboration possibilities, it said.

The company, which recently clinched a deal to buy Uber Technologies Inc's operations in China, is said to be worth US$35 billion and is now considering ways to expand its business locally and abroad.

BLOOMBERG