The Chinese company Didi Chuxing announced this week a more than $100 million investment in the Brazilian mobile app 99Taxis. The taxi app operates in 350 cities across the country as Brazil’s largest urban transport app.
Didi bought the rights to Uber in China last year, and reports nearly 400 million users in over 400 cities. This time, Didi heads to Brazil alongside Uber’s biggest regional rival. The company’s exact investment amount was not made public.
According to their investment terms, Didi will have a seat on 99’s executive board. In return, the Chinese company will provide “strategic guidance and support”.
99Taxis plans to use the investment to expand its reach in Brazil and Latin America, potentially doubling its user base this year. Before its most recent investment, the Brazilian taxi app amassed $25 million from investors such as Qualcomm Global, Tiger Global Management, Qualcomm Venture, and StartCaps Ventures.
99Taxis vs Uber
Three internet geeks created the app 99Taxis back in 2012. Last year, preference for the app doubled to 26 percent in São Paulo, the city with the most users. Uber trailed closely behind with 24 percent of user preference.
Uber, on the other hand, has experienced a turbulent relationship with Brazilian cities. The target of taxi drivers’ protests, São Paulo has banned Uber but subsequently liberated it following a popular petition. Meanwhile, Rio de Janeiro’s mayor banned Uber altogether last November. Brazilian drivers also sued the app for legal employment rights. However, Brazil remains one of Uber’s largest markets.
Unlike Uber, which connects drivers and passengers, 99Taxis only enlists official taxi drivers. Both offer competitive prices. 99Taxis offered a 20 percent discount for all rides ordered through the app in a four-month window last year. Meanwhile, Uber reduced its fares by 15 percent in São Paulo.
However, ex-mayor Fernando Haddad’s decree legalizing Uber also opened up the competition to other similar apps. The competition heats up with new apps like the Spanish Cabify, which has already started to recruit drivers and passengers in the city.
According to survey institute DataFolha, over half of São Paulo’s residents are aware of these ride app services, a nearly two-thirds increase from the previous year. Looks like the Brazilian market for rideshare apps is only going to get bigger.