Uber China merges with local rival Didi Chuxing in $35 billion deal

By midian182
Aug 1, 2016
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  1. Less than one week after it was announced that ride-hailing services would be legalized in China, it seems Uber has given up trying to compete with local rival Didi Chuxing. Reports from Bloomberg and Recode state that Didi will swallow up Uber’s China operations in a merger deal that will create a combined business worth $35 billion.

    The move looks like a good one for Uber; the company and investors in its China business will receive a 20 percent stake in the new entity, which was valued at $28 billion before the merger. Uber China had been valued at $7 billion, and the US firm was losing $1 billion a year in the country as it struggled against the local transportation giant.

    Another part of the complex deal will see Didi invest $1 billion in Uber at a $68 billion valuation. The Chinese firm recently closed a $7.3 billion financing round that included a $1 billion investment from Apple, giving it plenty of cash on hand.

    "As an entrepreneur, I've learned that being successful is about listening to your head as well as following your heart," wrote Uber CEO Travis Kalanick in an as yet unpublished blog post obtained by Bloomberg. "Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there. 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."

    As noted by TechCrunch, the move means Didi now has a stake in every large ride-sharing company on the planet, including Lyft, India’s Ola and Grab in Southeast Asia.

    Didi Chuxing has a 99 percent market share of taxis in China and an 87 percent share when it comes to hailing private cars. It operates in 400 Chinese cities, whereas Uber is found in 60.

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  2. rvnwlfdroid

    rvnwlfdroid TS Booster Posts: 177   +41

    It's hard to think of Uber in Billion's of dollars. The old saying everyone has a million dollar idea at least once in their lifetime should be changed to billion dollar idea.
    Reehahs likes this.
  3. Adhmuz

    Adhmuz TechSpot Paladin Posts: 1,828   +633

    "Getting to profitability is the only way to build a sustainable business..."

    Oh ****, that's why I can't start a sustainable business??? I thought giving away my product and running a defecate was sure to get me on the right track to being a successful entrepreneur...

    But joking aside Uber has made quite the name for themselves in a relatively short period of time, I just wish they would be allowed to operate in my local city but the local Taxi industry is doing everything they can to stop them and have gotten the government on their side. To be honest though, I just want the Taxi scourge eliminated from the roads, those *** holes piss me off on a regular basis, but you know having a special license and a medallion gives them the right to be that way correct?
    Reehahs and gibbstar like this.

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