"Alibaba, Tencent spending big on taxi apps despite lack of profit model
Alibaba Group and Tencent Holdings, China's internet giants, are in a neck-and-neck fight in the taxi app market. On Jan. 20, Tencent's Didi, its taxi hailing service, announced a plan to invest a further 200 million yuan (US$33 million) to benefit passengers. The very next day, Alibaba's Kuaide swiftly announced it was investing 500 million yuan (US$82.5 million) for the good of passengers, Shanghai's China Business News reports.
Some commentators are asking why the two giants are willing to throw so much money into the taxi app market which has yet to build up a clear profitability model.