Didi and Uber fi­nally tie the knot

That's China - - News & Events -

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.

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