Two Billion Dollars Later, Uber Just Gave Up in China
Need to Know
Earlier today, Chinese ride-sharing giant Didi Chuxing announced that the company “will acquire all assets of UberChina – including its brand, business operations and data – for operation within mainland China.”
It marks the end of Uber’s very aggressive, very expensive two-year struggle to break into the Chinese market. “To put it frankly,” CEO Travis Kalanick wrote just over a year ago, “China represents one of the largest untapped opportunities for Uber, potentially larger than the US.”
Kalanick had gone so far as to give speeches borrowing the jargon and slogans of the Chinese Communist Party.
So why did Uber – a company hardly known to buckle in the face of adversity – finally concede?
First and foremost, the price tag on that planned expansion had grown impossibly steep. Uber has already lost $2 billion in their struggle for market share, according to Bloomberg sources, and only last month Uber investors were calling for a truce.
It’s also likely the move will free Uber to begin a push into the Indian market, where local competitor Ola’s presence is hardly insurmountable. “India is the single biggest un-won opportunity, there it is a much more level playing field than in China,” an analyst told CNBC.
Ultimately Didi Chuxing’s acquisition is not finalized until China’s Ministry of Commerce signs off on the deal, and that’s hardly a foregone conclusion.
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