In a move that will have repercussions on China’s ride-sharing industry, Uber is planning on merging its China business with arch rival Didi Chuxing. The deal could be announced later today, and according to both Bloomberg and WSJ, the combined ride-aggregating company will be valued at around $35 billion. The report also adds that Didi will invest $1 billion in Uber at an overall valuation of $68 billion, and Uber, on the other hand, will become the largest shareholder in the combined company. Also Read - Uber cab service resumed in 31 cities in India with new Lockdown 4.0 guidelinesAlso Read - Uber launches 'Uber Connect' package delivery service to rival Dunzo and Swiggy Genie
Uber and Didi Chuxing have fought a pricey battle to dominate the Chinese ride-hailing market. Both companies have spent massive amount of money to attract drivers and passengers alike. But Uber hasn’t had the best of time and in fact the report adds that it has lost more than $2 billion in the country. The deal comes after the Chinese government legalized ride-hailing services, and also released nationwide guidelines. Also Read - Uber to operate 'Essential' cab service to hospitals and pharmacy stores in 4 cities
Didi Chuxing, which was earlier called Didi Kuaidi, is the biggest player in China and claims to have 87 percent market share boasting over 11 million rides daily. Before the announcement of the deal, Didi interestingly is a part of a global anti-Uber alliance with Lyft, Ola and GrabTaxi. Didi also picked up $1 billion investment from Apple earlier this year.
“As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” Uber CEO Travis Kalanick has reportedly written in a blog post obtained by Bloomberg. “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.”