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Uber abandons car-hailing battle with China rival Didi Chuxing

Uber abandons car-hailing battle with China rival Didi Chuxing

Uber stopped its costly battle for the Chinese ride-hailing market, the US company made a decision to agree to merge its Chinese operations with those of rival Didi Chuxing. In other words, Didi acquires all of Uber China’s operations and investors in Uber China will get a 20 per cent stake in Didi. This information’s source are people close to the above-mentioned transaction.

Didi is the most powerful ride-hailing company in China, it planned to invest $1bn in an equity stake in Uber’s global business. Such a deal brokers between the two giants is really historical moment, say experts.

The gaining China market is a dream for both rivals — Didi Chuxing and Uber, the companies have poured billions of dollars into developing their business and attracting the passengers. But Uber’s investors are concerned with such a wasting money — the China taxi-market isn’t winnable yet.

During their Beijing meeting in 2014, the heads of Didi and Uber were discussing the idea of a tie-up. Travis Kalanick and Cheng Wei didn’t exclude such an option. The further unbelievable scale of the fundraising has reflected the cost of this battle for China market is too high for both rivals.

During June-July the companies have started discussions about a deal, so now this agreement between Uber and Didi may influent on Lyft, Uber’s main rival in the US. The financial ties of three companies are too close, Didi is an investor in Lyft.

So far, deal isn’t closed, Uber and Didi prefer not to respond to multiple requests for comment possible agreement.