Taxi-hailing apps in China growing despite government actions

Ever since the idea was conceived, taxi-hailing apps have been battling a tough war in China. Sometimes against its own drivers, sometimes against the various governments of the world, sometimes against the competition.

But even though they get hit, banned, see advertising promoting its bad safety record, the companies seems to be growing fast, and investors recognize it.

According to a report by UK’s Business Insider, Chinese car-rental service Car Inc. on Thursday reported a 24 per cent jump in total revenue and an 87 per cent increase in net profit in the second quarter.

Earlier this year, the company took a huge gamble and went into business with Ucar, providing the latter with rental vehicles in January in selected Chinese cities.

Car Inc. contributed US$125 million (£79.6m) out of a total US$250 million (£160m) investment.

To make things even more interesting, Car Inc. actually worked around the law to get this, as it is forbidden in China for car rental companies to enter the private car-hailing sphere.

The company has instead just rented its vehicles to a partner company.

US private equity giant Warburg Pincus’ affiliate Sapphire Gem Holdings and Legend Capital Management provided the rest of the money.

Uber has had a tough time in China. Its offices in Sichuan's Chengdu and Guangzhou, in southern Guangdong Province, were raided by the police back in May.

Uber’s competition Ucar has released a celebrity-endorsed campaign slamming Uber’s safety record in June, as well.

However, none of this seems to be stopping Uber, as the company is now worth approximately $50 billion (£31.8bn).