Uber Technologies to Merge China Business with Didi Chuxing
Ride hailing service Uber Technologies will be merging their China business with their rival Didi Chuxing, bringing the value of the combined company to $35 billion based on a report from Bloomberg. Furthermore Didi will also be investing $1 billion in Uber at a $68 billion valuation.
Those investing in Uber China, that is owned by San Francisco based Uber, Baidu and others will receive a 20 percent stake in the combined company. According to a report cited by chief executive officer of Uber Travis Kalanick, Didi and Uber will be investing billions of dollars in China and both companies still have to turn a profit. By getting to profitability is the only solution in building a sustainable business that serves Chinese riders, drivers and cities in the long run. Plus a long awaited regulation that give legal status to online car hailing services in China was approved and released by the State Council.
Planned to regulate the taxi market and car hailing apps services in China, the new regulation are requiring car hailing apps, such as Didi and Uber to review their qualifications of drivers and cars that will guarantee their passenger a safe ride. In February, Didi Dache and Kuadi Dache, the precursors of Didi Chuxing have announced their strategic merger and became one of the biggest vendors in the car hailing app market.