Uber’s stint in China may have just ended after it agreed to sell its business to its fiercest rival: Didi Chuxing. The local taxi app controls 87% of the Chinese market and has been battling Uber since its entry in 2014. However, Uber China remained unsuccessful and has failed to make any profit since its entry in the market.
Last February, Uber admitted that it was losing $1 billion every year in funding its subsidy showdown against Didi Chuxing in China. Duncan Clark of BDA, a Beijing-based consultancy, said Uber’s Chinese venture has become too expensive for the company to sustain.
“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,” said Kalanick.
Part of the deal was for Didi Chuxing CEO Cheng Wei to join the Uber board while Travis Kalanick, CEO of Uber, sits on the Didi Chuxing board. Uber China also gets to keep its separate branding while holding a 17.5 percent stake on the merger.
