Uber Gets China's Guangzhou Auto As New Ally To Face Didi Kuaidi, Regulators

Uber has lined up a new ally in China as it gears up to compete with homegrown Didi Kuaidi — and deal with new regulation. The partner is Guangzhou Auto, a state-owned carmaker and dealer, which plunked an undisclosed amount in Uber China. In September, Baidu, the local Google, took part in a $1.2 billion fund-raising for Uber China.

Under the deal, Uber will promote Guangzhou Auto cars to its drivers and work with the automaker on car loans. The arrangement will help Uber recruit drivers, which could get easier if the Chinese economic slowdown results in more unemployed looking to make a living, Quartz said.

The partnership could aid Uber as the government works on new rules for the industry, due out next year, Financial Times reported. While the company's success has made it history's biggest startup — with a $62.5 billion valuation before going public — the company faces actual or potential regulatory push-back in Seattle, London and other cities around the world. It could be more challenging in China where, the government reportedly views technology companies with suspicion, the company is competing with municipal taxi dispatchers and Didi is partly owned by China's sovereign wealth fund.

Guangzhou Auto is one of the biggest carmakers in China, with its own brands and licenses to make Honda and Mitsubishi cars. Didi is an investor in Uber rival Lyft, which has formed an alliance with Didi, Ola in India and GrabTaxi in Southeast Asia to help them compete against Uber.