Didi Chuxing eclipses Uber’s performance in China, completing over 11 million rides per day compared with Uber’s 1 million.
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The deal will give Uber a 20pc share in the combined firm, Bloomberg News reported, adding it will be valued at $35bn (£26.4bn).
“Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there”, Kalanick says. Both Didi and Uber had cheered the rules, which were not as onerous as an earlier draft version.
Uber will become the largest stakeholder in the Chinese company with its stake. On the other hand, Didi will also agree to invest about $1 billion in Uber Technologies at a valuation of $68 billion, implying a stake of around 1.5%.
Uber Technologies announced plans Monday to sell its business in China to rival ride-hailing service Didi Chuxing in a deal that values the merged Chinese company at $35 billion. “Sustainably serving China’s cities, and the riders and drivers who live in them, is only possible with profitability”.
The Chinese ride-hailing company company said in June it has close to 15 million registered vehicle owners and drivers, serving about 300 million users, with a wide range of mobile technology-based transportation options.
During this time, Uber has lost $2 billion in China raising qualms with its investors.
Previous year it provided 1.43billion rides.
The two dominant ride-hailing app rivals in China have joined forces to create an even more formidable company. It had still set the target of operating in 100 different cities there by the end of the year.
“Over 15 million drivers and 300 million registered users have joined Didi’s open, sharing-based ecosystem that connects people, cars and lifestyles”, Didi Chuxing President Jean Liu said in a statement. Competitors for ride-haling and ridesharing services have included Grab in Southeast Asia, Ola in India, and Lyft in the U.S. The strategic alliance was formed to take on Uber in all countries.
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“China is such a tough market, in terms of regulation, competition and culture; they faced challenges on so many fronts”, said Li Yujie, an analyst at RHB Research Institute Sdn Bhd in Hong Kong. Apple also recently made an investment in Didi and General Motors made one in Lyft.
