Chinese ride-sharing is growing as urban traffic jams worsen (Photo: Anna Frodesiak/wikimedia)
Uber is selling its Chinese operations to Didi Chuxing, boosting the localÂ company's already dominant transportation-services presence in theÂ home market.
In a statement,Â Didi Chuxing said it is acquiring all assets of Uber China, including its brand, business operations and data.Â Press reports put the transaction volume at around 35 billion dlrs.
Uber wil receive 5.89 pc of the voting shares in the combined company. That holding is equal to a 17.7 pc economic stake.
Uber and Didi Chuxing had been waging a fierce battle for the fast-growing Chinese market in ride-hailing services. The sale of the US company's local operations to its Chinese competitor underscores the difficulties foreign companies have in gaining traction in the world's biggest car market.
"The merger will effectively end the hyper-competition that has been the norm between the two," market researchers IHS said in an analysis. "It will allow both companies more freedom to deploy their significant resources in new growth areas."
Uber CEO Travis Kalanick said in a blog post that the two competitors wereÂ Â "investing billions of dollars in China and both companies have yet to turn a profit there." And he added: "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."
Cheng Wei, founder and CEO ofÂ Didi Chuxing, said the acquisition will provide a further boost to the Chinese ride-sharing market. "This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level," he said in a press statement.
According to IHS, Didi Chuxing is well positioned for an era when ride-hailing will rely on driverless car fleets. The researchers expect this transition to emerge before 2025. By 2035, IHS predicts, China will have the largest driverless fleet for mobility services with more than 8Â million vehicles in-use.
Didi Chuxing President Jean Liu said the Uber China takeover will strengthen domestic operations, but she held out the possibility of a bigger role for the company outside its home market. Said Liu: "Didi ChuxingÂ will alsoÂ continue toÂ expand itsÂ international strategy."
Didi Chuxing offers a fullÂ range of mobile technology-based transportation options for aboutÂ 300 million users across Â 400 Chinese cities. These include taxi hailing, private car hailing, social ride-sharing, and other services.
A total of 1.43 billion rides were completed on Didi's platform in 2015, the company said.
In May, Apple invested 1 billion dlrs in Didi Chuxing.