Ride-sharing giant Uber is to merge its China operations with local rival Didi Chuxing, reports said on Monday, ending a ferocious battle for market share in the world’s second-largest economy.
Ride-sharing giant Uber is to merge its China operations with local rival Didi Chuxing, reports said on Monday, ending a ferocious battle for market share in the world’s second-largest economy.
The deal will give Uber a 20 per cent share in the combined firm, Bloomberg News reported, adding it will be valued at $35 billion. Both companies have spent billions of dollars on subsidies for drivers and passengers, as well as trading vitriolic accusations, as they fought for dominance in the potentially lucrative market.
As reported, the structure of the agreement leaves Didi Chuxing in unquestioned control. By “shedding its massive losses” in the country Uber will help clear its way to a future flotation, Bloomberg said.
The Wall Street Journal said a formal announcement could come as early as Monday. A blog post circulating on Chinese social media purportedly written by Uber CEO Travis Kalanick said: “I’ve learned that being successful is about listening to your head as well as following your heart.”
Both firms were “investing billions of dollars in China and both companies have yet to turn a profit there”, he added. “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.”
China-based spokesmen for both firms did not immediately respond to requests for comment.
The reports come days after the Chinese authorities announced new rules governing ridesharing, making clear for the first time that they may now operate legally in the country.
