The transportation war has become increasingly brutal in China, with Uber playing catch up since its launch there in 2013.The San Francisco-based ride-hailing company is burning $1 billion to compete against its No.

Didi — heavily armed with financing from local tech giants like Alibaba and Tencent — is dominating the market.

But it's more than just a money game.Unlike Uber, which focuses on private car rides in China, Didi allows users to be picked up by taxi, private car, shared car, shuttle van or bus.The average employee in Beijing travels about 9 miles to work, which takes about 44 minutes at an average speed of about 12 mph, according to a research report by HSBC.

The government is also more tolerant of taxi disrupters regardless of their local or foreign roots, according to Linde.Uber CEO Travis Kalanick said the startup has not faced major regulatory challenges in China so far, though the transport minister is getting fidgety about unfair competition from subsidies by ride-hailing companies.One bright spot is the development of autonomous driving features and their incorporation into the ride-hailing app's fleet.

Some believe that the first models could start to appear in China within 1-2 years.Uber is already shopping around for driverless cars, while Didi is in good hands with its deep-pocketed backers and working on a platform to partner with self-driving-technology developers.

Whether Uber can sail through China's tough regulatory environment and outpace Didi in the driverless-car race will be key.NOW WATCH: THE STORY OF GOLDMAN SACHS: From foot peddlers to a powerhouseLoading video...

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