Good thinking!! Uber has decided to merge with its main rival Didi Chuxing, in China.
This brings an end to a battle that cost the two companies billions as they have been competing for customers and drivers in China’s fast-growing ride-hailing market. Uber has been spending at least $1 billion a year to gain ground in China, while Didi offered its own subsidies to drivers and riders to build its business.
According to a statement from Didi, it will buy Uber’s brand, business and data in the country. Uber Technologies and Uber China’s other shareholders, including search giant Baidu Inc., will receive a 20 percent economic stake in the combined company. Didi founder Cheng Wei and Uber Chief Executive Officer Travis Kalanick will join each other’s boards.
“Didi Chuxing and Uber have learned a great deal from each other over the past two years,” said Cheng in the statement. “This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level.”
Travis Kalanick admitted to the futility of Uber and Didi fighting each other, losing billions.
“As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart. 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.”
Here is a blog post by Travis Kalanick obtained by Bloomberg and which is all over China’s WeChat service concerning this deal.
