Uber is Set to Merge with Didi Chuxing to Make Profit in China
Uber is set to merge its China operation with local ride-hailing giant Didi Chuxing in a USD 35 billion deal, Bloomberg and the Wall Street Journal are reporting.
According to Bloomberg, “people familiar with the matter” have indicated that Uber will continue to operate its own app in China for now.
The Bloomberg article quotes from a blog post by Uber CEO Travis Kalanick that you may have seen doing the rounds on WeChat this morning (click image to enlarge):
“As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” Kalanick writes in the blog.
“Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there. Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term.”
The quotes from Bloomberg match the blog post that just started to go viral on the Chinese web, so apparently it’s legit.
Unfortunately for consumers, this might end up being a bad thing. The intense competition between the car-hailing apps has meant they had to raise a whole bunch of VC funding to offer cut-rate fares. It's likely that will stop following this decision.
The announcement comes just days after the government announced that ride hailing apps like Uber and Didi Chuxing will officially be legal in China on November 1.
On another note, the Beijinger's 2nd International Foodie Weekend has been postponed by a week to the weekend of August 13-14. Nevertheless, we have no plans to scale back – the event will still be held in Sanlitun SOHO, and as expected, it’s still going to be Beijing’s largest food event, ever! Make sure you get your tickets early to avoid disappointment by scanning/extracting the QR code below.