Uber gets ready to take the backseat to Didi Chuxing in China     DATE: 2024-07-15 15:57:16

Faced with massive losses in China, Uber is finally ready to take a backseat in the massive market, where it's been soundly beaten by domestic ride-hailing service Didi Chuxing.

As reported by Bloombergand confirmed later by other news outlets, Uber will merge its China business with Didi, creating an entity worth a combined $35 billion.

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While this may herald the end of Uber's direct efforts in China, the Bloombergreport noted that Uber will get 20 percent of the new combined entity. This gives it a healthy stake in the rapidly growing Chinese ride-hailing market, so it isn't all a loss for the U.S. firm.

The deal also includes Didi making a $1 billion investment into Uber at a $68 billion valuation. In May, Didi Chuxing was valued at $28 billion.

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While it doesn't appear to exist on Uber CEO Travis Kalanick's social accounts, this alleged blog post started circulating on WeChat on Sunday:

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The news has immediately led to speculation that Uber was now more likely to go public, since its money-losing efforts in China would no longer drag on its business.

Uber has tried for the past two years to gain a foothold in China, where it's been burning through $1 billion a year trying to compete with Didi.

Didi itself is a merger from two powerhouse ride apps, Didi Dache and Kuaidi Dache, and has a killer 87 percent market share of private cars, and 99 percent of taxis. It also operates in over 400 Chinese cities, while Uber has struggled to expand beyond 60.

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This news comes days after the Chinese government legalised ride-hailing in the country, giving legitimacy to apps like Didi and paving the way for more investor confidence.