PODCAST: WeRide’s Spin with Uber, and Starbucks’ New China CEO

Uber will offer WeRide robotaxi services starting in the UAE. And Starbucks names a new China CEO to revive its flagging local operation.

By Doug Young & Rene Vanguestaine

A new partnership between Uber and autonomous vehicle developer WeRide may spark some interest in the future of driverless technology, though not significantly. The collaboration allows Uber users in the United Arab Emirates to opt for a WeRide robo-taxi, marking a step towards integrating autonomous services into mainstream ride-hailing. However, the partnership is limited in scope, as it will not extend to key markets like China or the United States.

For WeRide, this partnership seems to be a strategic move to boost its image following its pulled IPO in New York, where it cited delays in updating transaction documents. The partnership with Uber offers a boost in visibility without major risks for either company. Uber, which previously sold its autonomous driving division, appears to be cautiously re-entering the sector by leveraging WeRide’s expertise without taking on significant operational or regulatory challenges. But the deal still seems less important for Uber.

The choice of the UAE as the starting point for this partnership is likely due to the relatively new infrastructure and straightforward road layouts found in many Middle Eastern cities, making it an ideal testing ground for autonomous vehicles. The deal seems to serve as a PR exercise for WeRide as it seeks approval from China’s securities regulator to refile for its IPO.

The IPO, which was originally planned to be one of the largest by a Chinese company on Wall Street in recent years, fell apart at the last moment. WeRide must now seek fresh approval from the China Securities Regulatory Commission (CSRC) to move forward. Given the regulatory challenges and the opaque nature of Chinese rules around overseas listings—particularly involving sensitive data like geolocation—there is uncertainty regarding when, or if, the IPO will proceed.

WeRide’s business largely depends on the Chinese market, where it collects extensive geolocation data, which could be considered sensitive. This may complicate the CSRC’s decision, especially since listing in the U.S. often requires disclosures that the Chinese government may view as risky. These concerns echo the issues faced by other Chinese firms, like Didi, whose U.S. listing led to regulatory backlash.

New Starbucks CEO

Meanwhile, Starbucks is also grappling with challenges in China. The company recently appointed a new China head, Molly Liu, as part of its effort to turn around declining sales amid fierce competition from local coffee chains like Luckin Coffee and Cotti Coffee.

Starbucks’ sales have been hurt by a price war, with some premium coffee offerings now costing as little as 9.9 yuan ($1.50). Despite the aggressive pricing from competitors, Starbucks has opted not to engage in a price war, leading to a significant drop in its same-store sales.

Starbucks’ original appeal was about the experience. However, in its pursuit of growth, the company introduced smaller stores focused on convenience rather than ambiance, which has diluted its brand image, not only in China, but also in the U.S. Competing against local Chinese brands on price alone has proven to be an unsustainable strategy, particularly as the Chinese market is flooded with low-cost options from both established and emerging competitors.

The new leadership in China indicates a possible strategic shift. Starbucks may attempt to return to its roots by emphasizing the customer experience, something that differentiates it from local competitors focused solely on affordability. As China remains the company’s second-largest market after the U.S., this shift will be critical for its long-term success.

About China Inc

China Inc by Bamboo Works discusses the latest developments on Chinese companies listed in Hong Kong and the United States to drive informed decision-making for investors and others interested in this dynamic group of companies.

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