“Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there”.
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Didi Chuxing’s announcement marked the latest surrender by a foreign technology brand in the face of intense competition in China. Yahoo and eBay also turned over local operations to Chinese partners or shut down.
The valuation of the combined business will be $35 billion, said the people, who asked not to be named because the details aren’t public. Uber’s CEO, Travis Kalanick, was reportedly one of the driving minds behind the deal, and is said to have brought it up with Cheng Wei, the founder of Didi Chuxing, when they met in Beijing more than two years ago. That would make Uber’s share worth $7 billion.
“This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level”.
The two companies have been hit with heavy losses as they fought to attract customers. The company said a total of 1.43 billion rides were completed on its platform in 2015.
“Didi has been a fierce competitor and I respect all that Didi and their team have accomplished”, Kalanick said on his Facebook page. In the USA alone we have several alternatives to Uber, and the same can be said in other countries, such as China where the country has its own take on Uber called Didi. Wal-Mart Stores Inc. sold its Chinese online operation in June to JD.com Inc., the country’s No. 2 e-commerce service.
Uber launched in China in 2013, and its operations have since expanded to roughly 60 cities.
Didi Chuxing, previously Didi Kuaidi, operates in some 400 Chinese cities.
In another sign of increased consolidation in the global ride hailing market, last week Daimler said its MyTaxi firm will join forces with the smartphone app Hailo to create a new company with 70 million passengers. In June, Didi closed a $7.3 billion financing round that included investment from the United States technology giant Apple and the world’s largest e-commerce platform Alibaba.
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That included $1 billion from Apple Inc., which became a strategic investor alongside Tencent and Alibaba. In December, their alliance added India’s Ola and Southeast Asia’s GrabTaxi.
