Uber China To Merge With Rival Didi Chuxing

Struggling to keep up with the competition in the Chinese Taxi market, Uber Technologies Inc. has decided to sell its China business to rival Didi Chuxing. Didi Chuxing is the dominant ride-hailing service in the country. The development was reported by Bloomberg.

The estimated valuation of the combined business is pegged at $35 Bn, as per people close to the development. Investors in Uber China are touted to receive a 20% stake in Didi. For now, Uber will continue to operate its own app in China.

In addition to Uber selling its Chinese subsidiary, Didi is expected to make a $1 Bn investment in Uber, people familiar with the matter said. Didi had no immediate comment, and Uber declined to comment.

In a recent visit to India, talking about the fact that no internet company outside of China has succeeded in China in a big way,Uber CEO Travis Kalanick stated, “But that’s the thing. Doesn’t that make you want to try and show that it can be done? Because my question is are you saying no internet technology company is ever going to make it in China? Or is some time in our history moving forward at least one company that does it? So why can’t I try? And then you get to work because that’s hard.”

But the tables have turned for Uber China now. Travis Kalanick has admitted to the merger with the Chinese rival, in a blog post obtained by Bloomberg, which is all over China’s WeChat service.

uber China Travis BP

 

Interestingly, last year China’s ride-hailing leaders Didi and Kuaidi joined forces. The merged company Didi Chuxing brought together backers Alibaba Group Holding Ltd. and Tencent Holdings Ltd.

Later in May 2016, Apple invested $1 Bn in Chinese ride-hailing service Didi Chuxing. Also, as per reports the Chinese government passed a new rule last week that legalised ride-hailing services, making it easier for further expansion of taxi-hailing apps.

However, last year, in December four of the world’s largest taxi-hailing apps – India’s Ola, China’s Didi Kuaidi, US-based Lyft and Malaysia’s GrabTaxi, entered into a strategic partnership to allow passengers to book rides on any of these four services using just one app. The merger on Uber and Didi Chuxing however, may complicate Didi’s alliance with these taxi-hailing apps.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Uber China To Merge With Rival Didi Chuxing-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Uber China To Merge With Rival Didi Chuxing-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Uber China To Merge With Rival Didi Chuxing-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Uber China To Merge With Rival Didi Chuxing-Inc42 Media
Uber China To Merge With Rival Didi Chuxing-Inc42 Media
You’re in Good company