While Uber is doing rather well for itself in other parts of the world, the ride-sharing app has been having a hard time breaking through to the Chinese market. Not helping matters is the fact that the app has faced a fierce rival in Didi Chuxing, a China-based ride-hailing service. After losing over USD2 billion trying to break into China, Uber has decided to surrender the ride-hailing wars, opting instead to sell itself to Didi Chuxing instead.
The merger of Uber China into Didi Chuxing would give Uber a 5.89 percent stake in Didi via preferred shares, which amounts to a “17.7 percent economic interest.” For Didi, they would be getting “Uber China’s brand, business and data.” The merger will also see Uber CEO Travis Kalanick joining Didi’s board, while Didi Chuxing founder Cheng Wei will be joining Uber’s board.
“I have no doubt that Uber China and Didi Chuxing will be stronger together. That’s why I’m so excited about our future, both in China- a country which has been incredibly open to innovation in our industry- and the rest of the world, where ridesharing is increasingly becoming a credible alternative to car ownership,” said Kalanick in a press statement.
Source: Uber, Engadget, New York Times