Image source money.cnn.com
Brilio.net/en - Uber is taking on the world one step at a time. As the demand for this ride-hailing app continues to soar, the company is expanding to reach out to people in different parts of the world. But in China, the story has not been so straightforward, and the company may have conceded if not defeat, then at least some ground in its path to global domination.
Uber has struggled to penetrate into the market since its launch in China two years ago and revealed in February that it had been facing losses of about two billion dollars within that time period. Its approach to outcompete rivals by offering discounted fares backfired, costing the company a fortune.
So, Uber China is now collaborating with its biggest rival. Didi Chuxing is Chinas most successful taxi-booking app. Operating since 2012, running about 14 million trips each day. With a market share of 87%, it is no surprise that Uber has revealed its new plan to join forces with them. Statistics show that Didi Chuxing has a customer base of 750 million people.
Based on the agreement, Uber China will keep its brand and run its operations independently, while Uber Global will have a 17.7% stake in the merged company, along with a 2.3 percent stake that will be claimed by Baidu and Ubers Chinese shareholders in Didi Chuxing, Ubers overall stake will be about 20 percent. Through this deal, Uber China says it will ensure stability and continuity of service for passengers and drivers.
Meanwhile, Didi Chuxing will focus on integrating managerial and technological expertise in the merger, as well as expanding its reach on foreign soil. Its acquired a stake worth about $62.5 billion on Ubers global business.
Reports say that the company will also invest $1 billion in Uber as part of the deal. Prior to this, Didi also merged with Lyft, an American ride-hailing app that competes with Uber. The partnership gives Chinese customers easy access to using Lyft when in the United States, and keeps Uber from missing out on that market.
(brl/red)
