Uber was losing $1 billion a year in China, in an intense competition for growth and market share against deep-pocketed competitor Didi Chuxing.
Instead of calling for trade sanctions like US airlines do, They decided to simply stop the bleeding and sold their large money-losing business to their local competitor.
Didi Chuxing said it would take over Uber China and operate it as a separate brand. In exchange, Uber said it will receive a 20 percent stake in Didi Chuxing that it said would make the American company its biggest shareholder. Uber founder Travis Kalanick will join the Chinese company’s board while Didi Chuxing founder Cheng Wei joins the Uber board.
The Uber China brand will continue to operate under Didi’s ownership.
Uber reported raising another $7 billion in June. They could have burned through the cash growing in China, as their plan had them building up from 60 cities now to 100 by the end of the year. Instead they’ve chosen to focus the cash on “food delivery and self-driving cars.”
With Uber (and Lyft) having left Austin, I can only wish that we had Didi here.
At least we’ve got Fasten. In Arlington, Virginia they prominently promote that if you don’t take a taxi (when you’ve been drinking) you’ll wind up in a police car. But Austin has only 900 taxis, most of whom aren’t driving at 2 a.m. when people leave the bars. Uber and Lyft had 10,000 drivers, and paid more when demand exceeded supply at 2 a.m.