Mainland server the key to Uber's plans for China

Uber is to set up an independent business in China and has established a server to better deal with local customers, aiming for strong long-term development.

The US-based transportation network company is also going to introduce a Chinese partner as its strategic investor. Its financing plan is going well, Uber said in an e-mail statement, without disclosing further details.

"This is the only time that Uber has done something like this because China is so different from other parts of the world," said Travis Kalanick, founder and CEO of the company.

In an e-mail to investors, Kalanick said Uber receives about one million orders per day in China and is planning to invest about $1.1 billion in the Chinese market this year.

He added that China is Uber's second largest market worldwide, deeming it highly possible that China will surpass the US to become Uber's largest market by the end of this year. "China will be the most important target of Uber's global team," he said.

Uber started its business in China in February last year. It used "People's Uber", a non-profit product, as a means to break into the market. It had covered 17 percent of the country's taxi market by this May. It has also formed a strategic partnership with Baidu and received about $600 million in investment from Baidu last year.

Uber has faced competition from Didi and Kuaidi, the nation's largest taxi-hailing app provider. Its business has been as accused of being illegal because the Chinese government does not allow private cars to take part in taxi services.

Setting up a server in China means Uber is expected to be legally acknowledged after Shanghai passes a regulation on tailored taxi services. Shanghai Municipal Transport Commission director Sun Jianping said last Friday that a tailored taxi service platform could apply for a business license once the regulation is passed.

The platform is required to possess sufficient capital, qualification of Internet business service and a registered server in China.