Didi and Uber merge
Uber China with Didi Chuxing have agreed terms to merge the two ride-hailing mobility services in China.
In the move, Didi will acquire Uber China and see Uber exit the country, although continue to oversee its own app. The merger will value Didi at $35 billion. Uber China investors will get a 20% stake in Didi Chuxing.
The merger reflects the incredibly competitive landscape for ride-hailing mobility services in China, emphasising that neither company can profitably sustain the aggressive subsidies used to gain marketshare in the early expansion of the ride-hailing segment in the country.
Travis Kalanick, CEO and Co-Founder, Uber said, ‘Uber China—in just two years—has exceeded even my wildest dreams. We’ve grown super fast and are now doing more than 150 million trips a month. This is no small feat given that most U.S technology companies struggle to crack the code there. That’s why I’m so proud of what our amazing China team has accomplished.
‘However, as an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart. 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.
‘I have no doubt that Uber China and Didi Chuxing will be stronger together.’
China is already the largest market in the world for ride-hailing services, due to its large population and rapid growth in entrepreneurial activities designed to establish this new segment of service. China’s growing focus on self-driving and driverless car technology development will position Didi for the next revolution in ride-hailing: mobility services via driverless car fleets.
Earlier this year Apple agreed to invest $1 billion in Didi.