Chinese car hire app Yidao Yongche hints at Uber tie-up

Partnership could help the two firms tackle China's tough car hire market

Chinese private car hire app Yidao Yongche has hinted at a tie-up with Uber Technologies Inc, the controversial $40 billion US taxi-hailing firm which has repeatedly hit regulatory roadblocks in China, the world's largest smartphone market.

In an entry posted on its official Weibo microblog account on Sunday, Yidao Yongche published a picture featuring the image of a heart connecting its own and Uber's logos, the date "May 21, 2015", and the phrase in Chinese, "It's best to be together."

Spokeswoman for Uber in China and Beijing-based Yidao Yongche declined to comment on the post, nor say whether any announcement is due on May 21.

A partnership could help the two firms tackle the tough China car hire market. Both are facing regulatory uncertainty and fierce competition from deep-pocketed rivals, with Yidao Yongche lagging much bigger domestic rivals.

In February, Didi Dache and Kuaidi Dache, who count Chinese Internet giants Tencent Holdings Ltd and Alibaba Group Holding Ltd respectively among their backers, announced a $6 billion tie-up to create one of the world's largest smartphone-based transport services.

The merger prompted Yidao Yongche to file an anti-monopoly violation complaint with regulators, saying the two firms may have broken Chinese law by subsidising taxi rides to sell their service at prices lower than cost in order to push out rivals.

Uber counts Chinese online search firm Baidu Inc, the third of China's big three Internet firms, as an investor. Nonetheless it has struggled to navigate tricky local regulations.

Authorities in China probed Uber in Chinese megacity Chongqing last year, and Guangzhou and Chengdu earlier this month, over whether its drivers were operating illegally. Some Uber drivers in Shanghai have told Reuters regulators have recently increased scrutiny on the sector.