Alliances & AcquisitionsSmartphone Integration

Uber merges with China’s ride-hailing giant Didi Chuxing

Published: August 05, 2016 

Global ride-hailing company Uber has decided to expand its services in China and has decided to partner with a local entity and China’s homegrown champion, Didi Chuxing to ease out the process. In its latest fundraising round Didi was valued to be at $28 billion and the UberChina unit is going to take 20% stake in the company.

It is speculated that after this big merger, Uber is going to be the largest investor in Didi Chuxing. According to a recent statement released by Travis Kalanick, CEO and Co-Founder, Uber:

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.

Considered as a rare case of a US company invading local markets, this deal will mark an end to Uber’s Uber’s efforts to establish an independent foothold in China, which began in 2013. Apart from Apple, there are many global companies that have been trying for long to start their services in a local market as that of China.


Growing demands of ride-hailing services has made various companies to start planning out their investments in a strategic manner. Not just this, to make transportation services more reliable in China, this is Uber’s step towards making a dream come true for commuters.

Although, Uber and Didi have been bitter rivals, it would be interesting to see their fate become firmly intertwined with the deal. Mr. Kalanick will join Didi’s board, while Didi founder Cheng Wei will join Uber’s board as part of the deal. After the merger, Uber will own 17.7% of Didi, with other existing investors in UberChina, including Chinese search giant Baidu Inc., taking another 2.3% of Didi. (via WSJ)

According to an update from Bloomberg, after settling its terms with China, Uber is now planning to reach out other countries such as Grab in Southeast Asia, Ola in India and Lyft Inc. in the U.S. Talking about such mergers, last year, China’s ride-hailing leaders Didi and Kuaidi joined forces, creating a homegrown juggernaut to fight off Uber. The merged company Didi Chuxing brought together backers Alibaba Group Holding Ltd. and Tencent Holdings Ltd., the country’s most valuable internet businesses.

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