Uber announced today it is merging its China operations with homegrown rival Didi Chuxing.
Advertisement
Uber and its primary Chinese on-demand auto service rival, Didi Chuxing, have finally buried the hatchet in a landmark deal.
Although the back-end technologies will be merged, both Uber China and Didi Chuxing are expected to remain distinct brands with independent apps. The merger had been in talks for quite a while.
The acquisition comes a week after the Chinese government put in place new guidelines to regulate ride hailing companies in the country.
Women holding their smartphones show the ride-hailing apps Uber Technology Ltd., left, and Didi Chuxing at a residential compound in Beijing, Monday, Aug. 1, 2016.
While Uber has generated over Dollars 1 billion in profit from its top 30 cities worldwide, the company has not yet turned a profit in any Chinese city, even though it provides more trips in China than any other country, Kalanick said.
As for Uber, the deal is likely to please some private investors, who had been pushing the company to wrap up its costly fight in China, people familiar with the matter said last month.
“Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term”, he added. But that now seems unsettled after Didi and Uber announced their merger.
Uber China investors will have a 20 percent stake in the new company, the source said. Uber China has just 200 employees, while Didi has 400, according to the LA Times.
A bitter two-year battle to become China’s biggest taxi firm has finally ended with a £26bn deal between Uber and rival Didi Chuxing.
Uber is bowing out in China. “Didi Chuxing commits all our energy to work with regulators, users and partners to meet the transportation, environmental and employment challenges of our cities”. “Didi Chuxing will also continue to expand its worldwide strategy”. Didi did not disclose the stake it will take in Uber. It was profitable in developed markets in the first half of past year, they said.
The partnership follows an expensive battle between the two companies.
Advertisement
“In China we now have a clear victor, but I think a lot of countries will have a dominant player”, he said.
