Uber’s Sells China Operations to Didi Chuxing; will Focus on Other Markets
A fierce competition in the ride hailing services comes to an end in China with Uber selling its operations in the country to its rival Didi Chuxing.
The move will not only end a long drawn price war but will also give Uber a chance to focus in other expanding markets and a probable IPO.
Didi Chuxing was the leader in the industry in China, with Uber in the second position. San Francisco based ride-hailing company; Uber admitted that it would never leave the market but took the decision considering failures of other tech firms from outside China. Aggressive competition from local companies, weak understanding of the market and intimidating regulatory environment has been reasons for companies like EBay, Google, Twitter and Facebook to push out of the market. According to expert's Uber's move to sell its China operations was a wise business decision.
Didi Chuxing and Uber have fought for the leading position in the country's fast-growing ride-hailing market and reportedly in two years, Uber has lost $2 billion in China.
Push also came from investors, as they pressurized the company to chalk out a deal. Citing sources, reports said that, according to the arrangement, Didi will invest $1 billion in Uber's global company. On the other hand, Uber and the supporters of its China operations will hold a twenty percent interest in the merged company.