Uber faces obstacles as it aims to expand in China

Laws and competition complicate Uber expansio... 02:18

Uber, the smartphone app that lets you book a ride in a driver's private car, is expanding rapidly worldwide and calls China its number one priority for the new year. To succeed, however, Uber must overcome both legal obstacles and competition on the road.

With the smog and traffic to prove it, China has as many as 750 million urban commuters -- and there's a multibillion-dollar battle for their business.

CBS News correspondent Seth Doane and his team criscrossed Beijing to witness the fight from the front seat.

In the ring? Heavyweights Uber, worth upwards of $70 billion, versus China's Didi Kuaidi, valued at $16 billion.

In a Didi car, a gentleman picked them up, but he didn't want to go on camera because he was supposed to be at work. He said he's doing this for a little extra money.

"I can make about $800 a month," he said. "It'll help cover the expense of my car."

Ride-hailing services are brand new to China and are technically illegal, but the laws are selectively enforced. Both Didi and Uber are operating in a gray area while the government reviews its regulations.

"Since this kind of operation is still considered illegal in Beijing, I drive for Uber because it'll cover all the penalties if I get caught," Qu Zhonghua said.

Didi dwarfs Uber as it's in 360 cities across China compared to Uber's 21. Both companies are spending big to lure drivers and riders.

Both are relying on publicity stunts, like the short-lived UberBoat Doane rode in the city of Hangzhou.

In a letter to investors, Uber CEO Travis Kalanick said competing in China is "not for the faint of heart."

Doane added driving there is not for the faint of heart either.