China's ride-hailing market has shifted up a gear with major rivals Didi and Uber announcing new funding and market expansion plans this week.

Uber said late Tuesday that it will roll out its service to the central and southern provinces of Hubei, Hunan and Guangdong, giving it coverage of over 55 Chinese cities.

The company had previously announced it wanted to be present in 100 Chinese cities in 2016. Should it succeed, China would overtake the United States as Uber's largest market globally.

Domestic rival Didi also announced on Tuesday an undisclosed amount of funding from China Merchants Bank and added that the duo would also work closely in areas such as mobile payment and auto finance.

Didi has been vocal about its intent to extend to auto services and e-commerce. The tie-up with a domestic lender could mean that drivers will be able to purchase vehicles on credit on its online auto marketplace, which Didi will launch soon.

Both Didi and Uber have expanded aggressively over the past year. Didi, which is the result of a merger between two separate startups in early 2015, raised tens of billions of U.S. dollars last year from domestic and overseas investors, including early backers such as Alibaba, Tencent and Temasek and new investors like China Investment Corp. and Ping An Ventures.

Uber has also been seeking funding for its China operations and lists Baidu, Vanke, HNA Group, Guangzhou Automotive Group among its backers.

Uber said in a press release on Tuesday that its China operation is now valued at 8 billion dollars. This compares with a 16.5 billion dollar valuation for rival Didi.

It raised a total of 2 billion dollars from investors in China for both its China and global business.

Despite their growth in China, authorities are blaming the ride-hailing service offered by companies including Didi and Uber as a major cause of traffic congestions in cities like Beijing.

Yet analysts view Didi and Uber's success as part of sharing economy's growing popularity among increasingly tech-savvy Chinese.

"Their success reflects the emergence of shared economy as an inevitable trend in China," said Sandy Shen, research director at tech consultancy firm Gartner.

The services ride-hailing apps offers should be viewed as one of many solutions that authorities can leverage to address traffic problems facing China's big cities, Shen added.