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Didi, Uber competitor eDaijia cuts staff as O2O war takes its toll

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For eDaijia, having minimal cash reserves could spell disaster in a market that favors early acquisition tactics

UCAR and eDaijia enter strategic partnership in October to cut costs

UCAR and eDaijia enter strategic partnership in October to cut costs

Chinese designated-driver app eDaijia is cutting one fifth of its staff in an attempt to stay competitive, as market giants Didi and Uber expand aggressively.

According to multiple Chinese media outlets who cite an internal letter from the company’s CEO, Yang Jiajun, the company will be laying off approximately 20 per cent of its staff to curb spending in the face of rising competition.

The source claims that eDaijia’s personnel have quadrupled since the beginning of 2015 as part of an all-out attempt to compete with market leaders. However, the CEO now feels that its numbers are ‘bloated’, and that the company will have to streamline personnel in order to stay competitive.

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The year has seen China’s ride-hailing market become increasingly focussed on core players Didi Kuaidi and Uber China. Both companies secured multibillion USD funding rounds over the summer in an attempt to grab an early market share in China. eDaijia’s latest funding round totalled US$100 million in May, with an estimated market cap of around US$800 million.

When eDaijia launched in 2011, it differentiated from large competitors by marketing itself as a chauffeur service. Didi has since encroached on the space, by launching its own designated driver service this July called ‘Didi Chauffer’. At the time of the launch, Didi claimed it would have the service running in more than 100 cities by the end of 2015.

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In October this year, eDaijia joined forces with UCAR, also known as Shenzhen Zuche, in a strategic partnership that allows them to share resources including chauffeur teams, databases and marketing costs. The recent round of layoffs has sparked debate as to whether the two companies are planning a complete merger.

According to the internal letter cited in media reports, eDaijia is working on comprehensive compensation for the redundant employees, most of whom are in the technology business development portions of the business.

China’s O2O and on-demand services have seen increasing rounds of consolidation in 2015, beginning with the merger of ride-hailing giants Didi Dache and Kuaidi Dache.

The country’s largest tech names Baidu, Alibaba and Tencent have expanded aggressively into the area, heavily subsidizing their services as each hopes to dominate capital-rich sectors.

For companies like eDaijia, having minimal cash reserves could spell disaster in a market that favors early acquisition tactics.

Image Credit: edaijia.cn

The article Didi, Uber competitor eDaijia cuts 20% of staff as O2O war takes its toll was first published on TechNode.

The post Didi, Uber competitor eDaijia cuts staff as O2O war takes its toll appeared first on e27.


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