Last week’s announcement that Didi has agreed to take of control of 99 – Brazil’s homegrown ride hailing platform – confirmed the rumours that Didi is looking to make its first foray (running, not investing) outside of China. What are the repercussions of this move and what is Didi trying to achieve?

Por que o Brasil?

Well, Sao Paulo is Uber’s biggest city in terms of number of rides. Besides, Brazil is probably the biggest ride-hailing market left unconsolidated:

Only China, India, US and Indonesia have a bigger population – Didi is already in China, while Uber competitors in other markets, Ola in India, Lyft in the US, and Grab/Go-jek in Indonesia are already too big to be to be acquired.

Besides, cities in Latin America are generally very big in terms of population, of lower density compared to Chinese cities, with inadequate public transport system, and having safety issues for passengers. All these created fertile ground for ride-hailing services.  

We believe Brazil is just the first (and most public) of Didi’s forays into the Americas. It is a play that has been coming for almost 12 months since Didi invested in 99 in January 2017.

At one point of time, the city of Sao Paulo boasted more than 20 taxi hailing startups, and why did 99 stand out to align with Didi?

Well for one simple reason, Tiger Global. When Tiger was building a global portfolio of taxi hailing (or more colloquially, ‘anti-Uber’) companies, it chose 99 for Brazil. The other companies Tiger invested in included Grab in Southeast Asia, Ola in India and, obviously, Didi.

Softbank subsequently invested in all these companies.

So when Didi finished battling Uber in China and started looking overseas. Investment in this portfolio became a quite obvious choice. Hence the US$100 million series C, in which both Didi and Softbank participated.

There is a very complicated story behind this investment – which we will not divulge here. If you are interested in knowing more, you can reach out to us.

Sur del Rio Grande

From Sao Paulo, Didi naturally will penetrate into other cities in Brazil – and there are many of them. While Sao Paulo is the biggest city globally for Uber, who is the second biggest?

Mexico City – it fits all the positive signs for ride-hailing just as Sao Paulo is.

It has also been reported that Didi is also now looking to enter Mexico. This is something we can personally verify, as many of our friends are getting calls from Didi recruiters.

So, in the absence of a strong competitor of Uber to buy in Mexico, they seem to be building a team instead.

While Didi is making a bold move into a territory so far away from its home ground; Uber is facing a tougher time, having their backyard attacked by a fierce competitor who knocked them out of China.

Low competition

Beyond Brazil, the ride hailing market in Latin America is relatively fragmented and Uber faces little in the way of a strong competitor (compared to Lyft in the US, Didi in China, Grab in Southeast Asia or Yandex in Russia).

A notable player is Easy Taxi, which some of Momentum Works core team members once led, and many of our friends still work at. It took Rocket style to heart by expanding to too many countries and cities – at some time it was even running in Guatemala and Honduras.

Spread too thin

It later turned out – occupying key cities was much more important than having the breadth of covering more cities. Easy Taxi was at a time number one in Brazil, but number two in Sao Paulo – the latter turned out to be more important.

By expanding operations into Latin America where there are proven (but smaller) players that Didi can squeeze out – and by going head to head with Uber – Didi is both flexing it’s financial muscle, and sending a message to their competitors: we’re coming to take you on.

Perhaps the only markets which were harder for them are Venezuela (where bullet proof cars are in trend), Argentina (taxi mafia) and Peru (a more complicated system where Easy Taxi actually had a chance). Then again a Chinese player usually navigates through such messiness better than their US competitors.

What does Softbank want?

Aside from the last year’s investment in 99, Didi has also invested funds in ride hailing platforms in the Middle East (Careem), Southeast Asia (Grab), Europe (Taxify) and also with Uber itself (through merger with Uber China).

And one party nobody can ignore is Softbank, which holds shares in most major players across the world. Their objective is probably to own the sector, no matter who turns out winning – at the same time, a ‘healthy’ competition keeps regulators at bay.

What does Masa really want?


The irony with Didi’s entry into Brazil is that Uber had a long, hard, fight with Brazilian regulators to enable them to carry on operating effectively. Thanks to their effort, others can now pour in.

Taxi drivers in Sao Paulo are still not happy about Uber

Thanks for reading The Low Down, insight and inside knowledge from the team at Momentum Works. If you’d like to get in touch with us about any issues discussed in our blog, please drop us an email at [email protected] and let us know how we can help.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].