Didi and Uber finally tie the knot
The announcement by Didi Chuxing - China's largest ride-sharing service - on August 1 ended a costly battle between its long-time rival Uber for a stake in China's growing Internet-based carhiring industry. The new, combined company may be worth $35 billion, according to some reports. The decision to combine the operations of Didi with the mainland operations of US giant Uber Technologies Inc may provide a global boost for the economy, observers said.
Uber China's other shareholders, including search giant Baidu Inc, will receive a 20 percent economic stake in the combined company. In addition to the merger, Didi will invest US$ 1 billion in the San Francisco-based ride-sharing company valued at US$ 68 billion as part of the deal, a source said. Didi's founder, Cheng Wei, and Uber's CEO, Travis Kalanick, will join the director boards of the two companies, according to the statement.
Some observers say that the main reason behind the merger was to cut costs in the battle between the companies for leadership of China's fast-growing ride-hailing market.
The enormity of China's market gives the deal huge importance.
Didi owns a stake in Lyft, a US competitor to Uber that is also based in San Francisco. Didi's partnership with Lyft aims to enable Didi's customers who are traveling to the US to have access to Lyft's services.
In the first three months of this year, Didi received more than 85 percent of all online orders for car-hire services in China, eclipsing Uber and two other domestic players Yidao Yongche and Shenzhou Zhuanche.