After a fierce battle for market share in China’s ride-sharing industry over the past year, Uber looks to have finally thrown in the towel.
In a deal expected to be formally announced tomorrow, Uber will sell its Chinese arm Uber China to local rival Didi Chuxing.
In a blog post obtained by Bloomberg, Uber CEO Travis Kalanick posited the deal as a merger that strengthens both parties.
After Uber, Didi Chuxing is the biggest name in ride-sharing and together with Uber China is expected to be valued at $35 billion. Uber, which will control around 20 percent of the merged companies and even see Kalanick join the board of Didi Chuxing, is valued at $68 billion.
Uber China and Didi Chuxing had been subsidizing rides to help gain market share. The bill for Uber reportedly reached $2 billion. The straw that broke the camel's back, however, is likely the Chinese government’s decision last month to ban companies from subsidizing rides.
Didi Chuxing is backed by fellow Chinese tech giants Alibaba and Tencent, both of which have expanded recently into the automotive industry. Didi Chuxing has also received a $1 billion investment from Apple. It currently handles more than 11 million rides a day and serves about 300 million customers spread across 400 cities.