Uber has the lost the fight to retain its Chinese arm after it was purchased by arch ride-sharing rival Didi Chuxing.
Didi Chuxing is China’s largest provider of taxis, private cars, ride sharing and test driving, serving 300 million users across 400 cities and handling over 11 million rides a day. Uber entered the Chinese market in the hope of rivalling Didi but after a fierce battle, Uber is saying farewell to its Chinese business, giving Didi a monopoly on the country’s ride sharing market.
Bloomberg reports that the deal was struck after over a year of chest-beating and fundraising from the two companies, both keen to dominant the market.
In May 2015, Didi gave away the equivalent of $150 million in free rides, prompting Uber to also offer substantial discounts and subsidies for its services. In the following months, both firms began fundraising with Uber attracting about $1.4 billion from investors. Due to its local connections, Didi raised almost $3 billion, thanks largely to the likes of Alibaba, the SoftBank Group Corp from Japan and even Apple.
In the end, Uber gave up the fight, despite spending $2 billion in its futile attempt to dethrone Didi. All the company is left with is 20 per cent of its Chinese arm.