Ride-hailing service Uber
Technologies sold its China operations to competitor Didi Chuxing
Technology.
Under the agreement, which is subject to government approval, Uber
will become Didi’s largest shareholder with an 18% stake in the company (other
UberChina investors will receive a 2% stake), while Didi will receive a
“minority interest” in Uber.
UberChina will remain an independent brand from
Didi, while Didi founder Cheng Wei and Uber CEO Travis Kalanick will join each
other's company boards.
Uber launched its service in China
in 2013 and since then has spent more than $1 billion there, the Wall Street
Journal said. Didi was founded in 2012. The company, which controls 99% of the
ride-hailing market and 87% of the private-car service market in China, gave
1.43 billion rides last year alone. By comparison, Uber, which was founded in
2009, gave its 1 billionth ride late last year.
“This agreement with Uber will set
the mobile transportation industry on a healthier, more sustainable path of
growth at a higher level,” Wei said in a statement Monday. “Didi Chuxing
commits all our energy to work with regulators, users and partners to meet the
transportation, environmental and employment challenges of our cities.”
“Uber and Didi Chuxing are
investing billions of dollars in China and both companies have yet to turn a
profit there,” Uber CEO Travis Kalanick said.
“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.”
Didi will invest $1 billion in
Uber, the Wall Street Journal said, citing a person familiar with the process.
Earlier this year, Didi reportedly secured a $7.3 billion fundraising round,
including $1 billion from Apple.
China last week released
nationwide guidelines for ride-hailing legalization.