Uber Sells Its China Business To Competitor Didi For $35 Billion

It’s easy to think of Uber as belonging squarely American millennials, but the ride-hailing app, and the ecosystem attached to it, are truly global enterprises. The service operates and competes in dozens of nations worldwide… except with one less, now that it’s having to give up on one of the most populated countries on Earth.

Didi Chuxing, China’s homegrown ride-hailing service, has announced that it will be buying Uber’s Chinese operations for the equivalent of $35 billion.

The fight between the two companies has proven brutal for Uber, which was able swiftly to dominate and become profitable in many American cities, but faced many more challenges in China. The company had been spending $1 billion per year trying to compete with Didi, and, frankly, not recouping it.

Didi will be buying Uber’s data, business, and branding inside of China. Uber will get a 20% stake in the newly combined company.

Didi founder and CEO Cheng Wei said in a statement that, “Didi Chuxing and Uber have learned a great deal from each other over the past two years. This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level.”

Didi has for some time been getting backing from China’s largest internet businesses, including Alibaba and Tencent. Apple has also invested about $1 billion in Didi.

In a blog post, Uber CEO Travis Kalanick explained the company’s reasoning. “We’ve grown super fadst and are now doing more than 150 million trips a month [in China],” Kalanick wrote, but that doesn’t mean it’s enough.

“As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart. Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there,” Kalanick wrote.

Profit is not only the entire point of business, but also necessary to keep growing your company, as Kalanick concluded: “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.”

The deal will have to be approved by Chinese regulators before becoming official.

Uber to Sell China Business to Rival Didi After Losing Billions [Bloomberg]